Red tape ‘w ill force workers to join gig economy’
TYING up firms in red tape will force more people into the so-called gig economy of job insecurity, a major employment review warns today.
It is expected to suggest reforms to boost the rights of people working for firms such as Uber and Deliveroo – but will stop short of endorsing Labour’s call for zerohours contracts to be scrapped.
The review, headed by Matthew Taylor, a former adviser to Tony Blair, will warn that ministers risk pushing more people into these insecure jobs if they make firms give staff more rights.
Theresa May will unveil its findings during a speech in which she will also reach out to Labour, asking the party to ‘contribute, not just criticise’.
Labour ridiculed the idea yesterday, claiming it showed Mrs May had ‘run out of ideas’, but First Secretary of State Damian Green said it was a ‘grown-up way of doing politics’ after the election led to a hung parliament.
Mr Green also brushed aside rumours that Mrs May could face a leadership challenge within weeks, saying there was ‘no credible plot going on’.
In his report today, Mr Taylor, chief executive of the Royal Society for the Encouragement of Arts, Manufactures and Commerce, says ministers had created an ‘employment wedge’ between traditional firms and those whose workers were self-employed.
He suggests that introducing more red tape for employers will encourage them to take the route pioneered by firms such as Uber.
The report says the Government should ‘help firms make the right choices’, adding: ‘Although there are things that can be done to improve working practices for employees, the “employment wedge” (additional, largely non-wage costs associated with taking someone on as an employee)
‘Not cogs in a machine’
is already high, and we should avoid increasing it further.’
Mrs May, who commissioned the report, welcomed its findings last night, but acknowledged the need to back employers who offer decent jobs by not making things unnecessarily hard for them.
Stressing the need to avoid imposing ‘overbearing regulation’ on firms, the PM suggested ministers would focus on improving the rights of the estimated 1.3million people working in the gig economy who have little security.
She said: ‘We will build on the strengths of our labour market. While avoiding overbearing regulation, we will make sure people have the rights and protections they need. That means building on our high employment rate and low unemployment rate and continuing to strive for full employment. It means retaining the flexibility that people value and recognising that most employers treat staff not just fairly but well.
‘It means remaining a home to innovation, new ideas and new business models, and recognising the risks and difficulties which those striving to build their own business face – not just on day one, but every day. But it also means finding the right balance of rights and responsibilities, flexibilities and protections.’
Mr Taylor will call on ministers to do more to protect those in insecure jobs.
Leaked drafts of the report suggest it will call for people on zero-hours contracts to be given the right to request a normal contract after a year.
Mr Taylor also wants firms to show that staff can earn at least 1.2 times the minimum wage overall, and for unpaid internships to be axed.
He also wants to see a new form of employment status between traditional employment and self-employment, suggesting so-called ‘dependent contractors’ should be eligible for rights such as sick leave and paid holidays, adding: ‘Workers should be treated like human beings, not cogs in a machine.’