The Taylor review fails to address the underlying sicknesses of the modern British workplace

There are two major problems – the extreme asymmetry of power between the worker and employer in the typical UK workplace and the broader weakness of the British economy

Ben Chu
Tuesday 11 July 2017 18:03
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Matthew Taylor’s gig economy ideas may prove a step towards improving conditions for zero-hours and self-employed workers
Matthew Taylor’s gig economy ideas may prove a step towards improving conditions for zero-hours and self-employed workers

It’s futile denying the trade-off. Survey data clearly shows that many workers in the so-called gig economy really do value the flexibility that these new working conditions enable. But it’s equally true that many feel exploited by the proliferation of zero-hour contracts, the surge in temporary agency placements and the growing tendency for companies to hire self-employed contractors. It’s also clear that a minority of firms have been cynically abusing the system to cut costs.

In delivering his review of modern working practices for the Prime Minister, Matthew Taylor naturally wanted to offer protection for those at risk of exploitation but he also felt the obligation not to destroy flexibilities that many workers cherish. Inevitably, the Taylor review’s proposals do not go far enough for some and go too far for others.

Yet there are two big social and environmental factors that were always going to make Taylor’s self-described task of delivering “good work for all” difficult: the extreme asymmetry of power between the worker and employer in the typical UK workplace and the broader weakness of the British economy.

The trade-offs on employment rights and flexibility that Taylor sought to navigate would, ideally, be primarily managed within companies, rather than through regulation, or the law. If one set of workers want to work flexibly in return for fewer pension rights, for instance, while others want to keep those benefits in return for the more rigid system of hours, why shouldn’t the company itself design special arrangements to deliver that, with an endorsement from the broad workforce?

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This might sound naively utopian but in more consensual business cultures, such as those that exist in Germany and Scandinavia, this is not so far from the truth. In those places, the wider society also plays an important role in regulating business behaviour. The stigmatisation of exploitative employers is a powerful incentive for firms to behave responsibly.

In the UK, for historic reasons, this consensual corporate culture is rare. And moves towards instilling it tend to meet fierce resistance from businesses. A year ago Theresa May made a commitment to put workers on company boards. Her retreat on that pledge in the face of strong business lobbying (which incidentally took place even before the election fiasco) is symptomatic of the UK’s broader problem of extreme workplace power inequality.

The idea of greater worker consultation and involvement in corporate decision-making is anathema to the right-wing press, which tends to frame such ideas as a slippery slope to the union militancy of the 1970s. There’s also an unhelpfully oscillating attitude in the broader media to those who run businesses. Tycoons often get lauded as cost-cutting heroes one minute and, the next, when the social impact of their cost-cutting become apparent, they are transformed into national hate figures.

And then there is the broader economic environment. One of the mysteries of the proliferation of complaints about the gig economy and flexible working is why, if people don’t like it, they don’t do something else? And the answer is that there are not as many options for people as we’re often led to believe. As the Taylor review itself notes, official data still shows many workers have fewer hours than they really want. It’s reasonable to assume that more would switch employers too if they could.

If the economy were stronger, with more employment opportunities and higher rates of job-switching, people who were unhappy with gig economy jobs offering high flexibility but few rights would not have to take them. They could work for companies offering conditions more suited to them – and leave the flexible jobs to those who, for personal reasons, desired the flexibility.

To give a personal example, my wife works for a well-known, publicly funded, arts institution in London. She’s supplied by an agency under a temporary contract. The per-hour pay is actually the same as if she was a regular employee, but she’s not eligible for a range of normal employee benefits, including childcare vouchers. Yes, the arrangement offers some useful flexibility for her, which does have a value. Yet if she were offered a permanent contract doing the same job with the same institution she would almost certainly take it.

The context here is deep Government cuts to arts funding, incentivising institutions to bear down on their costs (which essentially means the workforce). And there’s something similar taking place in the wider economy too. Despite record employment rates, the broader economy, almost a decade after the recession, is still showing weakness, in the form of stagnant real incomes and flatlining productivity.

Some of the Taylor recommendations may well be a helpful nudge in improving conditions in the workplace. But until these two underlying illnesses are also tackled, it’s likely that anger over the symptoms – zero-hour contracts, bogus self-employment, an increasingly casualised labour force – will continue.

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