The Taylor Review Shakes Up UK Gig Economy


The Law Of… The Growing Gig Economy

The Taylor Review was published yesterday and called for an end to the UK’s 'cash-in-hand-economy'. It also suggested that 'gig' workers should be entitled to sick pay and holiday leave.

Partner in Employment Law, Joy Drummond, investigates what the findings could mean for the future of workers in the UK.


Background To The Taylor Review

The Taylor Review was commissioned by the government to look into the growing trend of modern working practices, including the gig economy and cash-in-hand jobs. It is currently estimated that cash jobs such as decorating, cleaning and labouring are worth up to £6bn a year.

The report also looked at zero hour contracts and self-employed contractors, who, employed by large firms such as Uber and Deliveroo, lack job security and benefits. The Citizen’s Advice Bureau estimates that 4.5 million people in England and Wales are currently in this kind of insecure work. They have repeatedly called for employment rights that can be enforced so workers can access sick pay and holiday entitlement.

The Review’s Findings

The review identified 7 broad principles after a 10 month investigation.

They can be summarised as:

1 – The same basic principles should apply to all forms of employment e.g. benefits and National Insurance. Everyone should have a baseline of protection. The taxation of labour should be consistent throughout. Technology should be used to offer new opportunity and help with smarter regulation and flexible entitlements.

2 – Contract workers who are self-employed and seek work through a platform (e.g. Uber) should be protected from exploitation by that platform. These workers should be renamed 'Dependent Contractors', with a clear definition to distinguish these workers from those who are legitimately self-employed.

3 – The law should be clearer to help firms make the right choices and help individuals exercise their rights. Dependent Contractors are the group most likely to suffer from unfair, one-sided flexibility and should be provided with additional protections, as well as stronger incentives for firms to treat them fairly.

4 – Companies should be seen to take good performance seriously and ensure that all workers are engaged and heard. There should be effective management and strong employment relations within the organisation.

5 – It is vital that everyone feels as though they have realistic and attainable ways to strengthen their future work prospects.

6 – There needs to be a more proactive approach to workplace health. It is proposed that elected Mayors take the lead in promoting this.

7 – The National Living Wage needs to be accompanied by sectoral strategies engaging employers, employees and stakeholders to ensure that people, particularly in low paid sectors, are not left indefinitely on the minimum living wage.

Within these suggestions, the most important points to note were:

  • The suggestion to close the loophole that sees temporary staff from agencies paid less than direct employees doing the same job.
  • Zero-hour contracts will not be banned. Instead, those in this kind of work may get the opportunity to request fixed hours if they want them.
  • Cash-in-hand jobs may be regulated more thoroughly.
  • Employers may have to prove that employees can earn more than the minimum wage to ensure that there are progression opportunities.

The Prime Minister Theresa May said:

"[these issues] go right to the heart of this government's agenda and right to the heart of our values as a people."

"I am clear that this government will act to ensure that the interests of employees on traditional contracts, the self-employed and those people working in the 'gig' economy are all properly protected."

Frances O’Grady, General Secretary of the Trades Union Congress, comments,

“… from what we’ve seen, it’s not the game-changer needed to end insecurity and exploitation at work.”


“… it doesn’t look like the report’s recommendations will shift the balance of power in the modern workplace.”

What Does This Mean For Employment Status’?

On employment status the review recommends:

  • That there continues to be different levels of legal protection for employees; for those classed as workers but not employees (to be re-named ‘dependent contractors’) and for the self-employed.
  • That the existing law on who is an employee and who is a non-employee worker be codified and tweaked to place more emphasis on the amount of control the employee has over the way the work is done and less on whether or not there is a requirement to perform the work personally.
  • An assumption of employee status so that it is for the employer to prove that an individual is not an employee.
  • No Employment Tribunal fees for determining employment status.

Joy comments:

While having some superficial attractions, it is hard to see how these measures in themselves will significantly reduce the uncertainty and need for litigation when applying this to each actual case.”

“A clearer and stronger approach would be to specify rights applying to everyone who works from day one regardless of status and to provide for an increased level of protection after a certain period of service for non-employee workers as well as employees.”

What Does This Mean For Gig Workers?

In response to firms such as Uber and Deliveroo, who currently insist that all of their workers are self-employed contractors, Mr Taylor recommended the proposed 'dependent contractor' title. It is so far unclear as to what new rights, if any, this category of worker may have.

There are as many as 5000 people currently working in the gig economy, which also includes a range of professions such as designers, administrators and labourers.

Many trade unions have expressed their concern at this news, commenting that it does not go far enough to give security to these kinds of workers.

On what the Review says about zero-hours contracts Joy comments:

"The review does very little to redress the balance of power in zero hours contracts away from the employer in favour of the worker. There is a recommendation for those on zero hours contracts to request a fixed hour contract after 12 months, but that hardly seems sufficient."

"There would be no obligation to grant the request. Provided the employer jumps through the procedural hoops, and rely on one of the approved reasons, they would be free to reject the request,. After all the hype this is very disappointing."

What Does This Mean For Cash In Hand Workers?

Mr Taylor expressed his desire to see an end to the cash-in-hand economy. Although this is only a recommendation, his report could have a huge impact on how cash-in-hand work is regulated in the future.

He explained his reasons for this opinion:

"In a few years’ time, as we move to a more cashless economy, self-employed people would be paid cashlessly - like your window cleaner. At the same time they can pay taxes and save for their pension."

"Most people who do pay for self-employed labour would like to know that that person is paying their taxes."

What Does This Mean For Low Wage Workers?

The Review recognises the serious barriers to enforcement of basic employment rights, especially for the low paid, caused by Employment Tribunal fees and widespread non-payment of awards by employers.

The review recommends:

  • That HMRC enforces holiday pay rights and possibly unlawful deduction of wages claims, as well as the National Minimum Wage and sick pay.
  • That the Government enforces Employment Tribunal awards without the successful claimants having to take any further steps, along with the naming and shaming of employers who do not honour awards.

Joy comments:

These proposed solutions, while welcome in so far as they go, in reality would do no more than tinker with the problem.”

“For employment rights to be more than theoretical for those who need them most, Employment Tribunal Fees must be abolished, or at least be put on a sliding scale proportionate to the value of the claim. HMRC should collect unpaid awards through the tax system on a tight time scale and pay them directly to the claimant.”

“The best way to improve poor employment conditions caused by the imbalance of power between the employer and the worker is by membership of trade unions. Statutory employment rights can be a useful tool for workers, as individuals, and when acting collectively.”

“Obtaining justice through law enforcement is largely illusory in practice for a large number of workers most in need of protection. This review does little to remedy that.”

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