Taylor Review

Wednesday 7th February 2018 Lords Chamber

Statement

16:04

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, with the leave of the House, I should like to repeat in the form of a Statement the Answer given to an Urgent Question in another place in relation to the Government’s response to the Taylor review of modern working practices. The Statement is as follows:

“Mr. Speaker, I am delighted to set out the government response to the review of modern working, which was led by Matthew Taylor. Matthew Taylor set out his ambition that government should place as much emphasis on creating quality jobs as it does on the number of jobs. Good work and developing better jobs for everyone in the British economy is at the centre of the industrial strategy vision. The Prime Minister has repeatedly said that as we leave the EU there will be no rollback of employment protections, but today, we are committing to go further than that and seek to enhance rights and protections in the modern workplace for even more people. We will support employers who give individuals their correct employment rights, but we will prevent undercutting by unscrupulous employers who try to game the system by clearly defining who is employed and who is not.

We will extend the right to receive a payslip to all workers, including stating the hours that they worked. We are requiring employers to clearly set out written terms from day one of the employment relationship and extending that to all workers. We are taking forward 52 of the 53 recommendations in the Taylor review, and all but one of the recommendations from the joint report of the BEIS and DWP Select Committees. For workers on zero-hour contracts, we are creating a ‘right to request’ a stable contract. For the first time, the state will take responsibility for enforcing a wider set of employment rights, including sick pay and holiday pay, for the most vulnerable workers. Employers who lose tribunal claims against staff and are found to have had no regard for the law will face fines of up to £20,000 from the tribunal, quadrupled from the current £5,000, and we will also ensure that when an employment tribunal award is made, it is paid correctly.

The Government are very grateful to Matthew Taylor and his panel, as well as to the many individuals and organisations who contributed to this review. I would also like to thank the BEIS, DWP and Scottish Affairs Select Committees for their contributions to this work. Through this response we are acting to ensure good work for all, to protect the rights of those on low pay and to ensure that more people get protection, security and certainty in the work that they do”.

My Lords, that concludes the Statement.

16:06

[Lord Grantchester (Lab)]

I thank the Minister for repeating in the form of a Statement the reply to the Urgent Question in the other place on the Government’s response to the Taylor review of modern working practices. This is a very disappointing government response. Against the challenges thrown up by employers using technological innovations in drawing up job specifications, pay and conditions, the Government should focus on the definitions of categories of employment to be clarified and monitored by the Employment Agency Standards Inspectorate. Enhancement of rights merely with payslips and written terms does not go far enough. Will there be clarity in the employment laws in relation to how workers are employed in the so-called gig economy? In the case of a dispute, to whom does a worker go? How will the state take responsibility for enforcement? What rights will apply to which workers on day one of employment, and how will they apply to those on zero-hours contracts? Will any new right to request a more stable contract result in an obligation on the employer? Will the role of trade unions be enhanced to protect and guide their members through any new procedures? A far more comprehensive response will be required after the consultation.

[Lord Henley]

I am sorry that the noble Lord was disappointed with my response, as I think that we went a long way. He failed to recognise that we are announcing further consultation on some of the grey areas in which there is a lack of clarity. The noble Lord will be aware that we have the Employment Rights Act 1996, and the law on the subject has grown and developed as a result of cases in the courts since then. We all accept that there are grey areas in which there is a lack of clarity regarding employment. That is why my right honourable friend wanted to set up this review and why he has responded with the Statement on good work today. He has also responded with a series of consultations, the first and most important of which is the consultation on employment status. We have responded as we did to get that correct so that we can then move on to legislate where it is necessary. We look forward to helpful contributions from the noble Lord and his party in due course.

[Lord Fox (LD)]

My Lords, on employee status, a central part of the Taylor review concerned dependent contractor status. The Government seem to be agnostic on that. They are going into consultation, but what mood are they in? Are they in favour of moving towards dependent contractor status? If not, why not—and how long will this consultation process take? People are already working in this economy and being exploited by it. Will this require primary legislation? If so, what timetable do the Government envisage before we deal with this issue on the Floor of this House?

[Lord Henley]

My Lords, the noble Lord seems to think that we need to look only at dependent contractor status but the whole question of the boundaries between employed status and being self-employed also needs to be looked at. That is part of the consultation and I look forward to hearing his comments on that in due course as part of the consultation. Thinking back to the Employment Rights Act 1996—I do not remember its passage, though it is not that long ago—it is very likely that inclarities, if I may call them that, will emerge as a result of the consultation and will need to be looked at, as has happened since 1996. For that reason we are consulting—just to keep the noble Lord busy, there are three other consultations as well, where we would again be grateful for his comments—and it is quite likely that we will need to legislate as a result. As to the likely timescale for bringing forward primary legislation, I am afraid that I cannot give any assurances to the noble Lord. He will be aware that both Houses are rather busy with quite a lot of legislation at the moment.

[Lord Monks (Lab)]

My Lords, we are not short of consultations in this area; Taylor himself carried out a very extensive consultative exercise which the Minister referred to in his opening Statement. It looks to many people as if this exercise is being kicked down the road, with yet more consultation before the Government act. Some modest measures have been announced today—I noticed that the general secretary of the TUC said that a “baby step” had been taken. However, this is not the ambitious approach that the Prime Minister originally set out regarding the insecure labour market which affects so many in Britain today. Many young people are struggling to get secure contracts, and many people who work for agencies feel that their job security is at risk. Many mothers in particular, but also parents generally, cannot plan their childcare arrangements. We recently read about the case of a man who died because he did not want to take up a doctor’s appointment because he would be fined. I am not saying that that is typical but there are such cases. For too many people out there the world of work is nasty, brutish and, occasionally, all too short. When will the Government seize the nettle and move forward in an ambitious way, as we were led to believe would happen when the Prime Minister originally made a Statement on this matter?

[Lord Henley]

Again, my Lords, I am sorry that the noble Lord takes this rather negative view of what has emerged. Regarding the government response, Matthew Taylor himself said:

“There is much more to be done to make good work for all a realistic goal, but the Government response to my review is substantive and comprehensive. It will make a difference to the lives of the most vulnerable workers and that is what matters”.


We are in a position where employment is at an all-time high and unemployment is at its lowest level for some 40 years. Whatever we do, we do not want to damage, but we want to make sure that we make the right changes at the right time and in the right way. That is why there will be further consultation on employment status and on the other matters that I talked about—agency workers, enforcement of employment law and transparency for employees. Let us get that right and then legislate where appropriate.

[Lord Holmes of Richmond (Con)]

My Lords, what is the Government’s view on unpaid internships? As the Taylor review chose to pull its punches on this point, does my noble friend agree that it is high time to legislate to put an end to these pernicious practices?

[Lord Henley]

My Lords, I am aware of my noble friend’s concern on this matter and of his Private Member’s Bill. A letter is on its way to him and to others who have been involved in that Bill offering a meeting on the subject. I hope that he will receive it in due course.

[The Lord Bishop of St Albans]

My Lords, a number of things are to be welcomed in the Government’s response to the Taylor report but perhaps I may pick up on one small thing. One recommendation is that the Government should develop a free online tool to provide individuals with an indication of their employment status and rights. However, do the Government not realise that a large proportion of the workers who are most vulnerable to exploitation are the very ones who will have least access to that sort of digital connectivity? Will the Minister make a commitment that the question of how more vulnerable people can access this information will be looked at closely when implementing this recommendation?

[Lord Henley]

The right reverend Prelate makes a very good point—some people do have problems with access to computers and such matters. I know that considerable work has been done on these matters in the Department for Work and Pensions, particularly in relation to universal credit and other benefits. I think that the department finds that most people can manage but I will certainly have a further look at what the right reverend Prelate has said and, if there is anything further that I can add, I will write to him.

[Lord Carlile of Berriew (CB)]

As welcome as the Taylor report is, will the noble Lord, as a fellow member of the legal profession, bear in mind that in that profession and in a number of others there are a large number of very successful limited liability partnerships, the members of which are self-employed and treated as self-employed by the Revenue? Those arrangements are often to the distinct advantage of the professional people concerned—men and women. Will the Government ensure that beneficial limited liability partnerships, which bring a great deal of money into the economy, are not affected by these proposals?

[Lord Henley]

The noble Lord does me the honour of claiming that I am a member of the legal profession. I suppose that I am legally qualified but I do not think that I could put myself at quite the same level as the noble Lord. However, he raises a very sensible point and it is one that I will certainly want to look at. As I remember my employment law, the important point is that whether you are employed or self-employed should not be a matter for the individual to decide; it is, as it used to be, a matter of fact and degree. I hope that whatever changes we make—particularly changes to limited liability partnerships and those working in them—do not affect that, but I will certainly make sure that the noble Lord’s point is taken on board.