To keep our labour market flexible, employment law must keep up with the times

Christian May
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The gig economy is facing scrutiny from policymakers (Source: Getty)

The UK’s employment rate has been a standout success story of recent years, and currently sits at a record high of just under 75 per cent.

The unemployment rate is at its lowest level since 1975, at just 4.6 per cent. Economists are justifiably concerned about the stagnant rate of wage growth and the rising cost of living, but these issues should still be seen in the context of a UK labour market that stands in stark contrast to many countries on the continent, whose youth unemployment rates are particularly depressing.

One of the reasons for the UK’s relatively rosy employment story is the flexibility of the labour market, which also accommodates part-time workers.

Read more: Political consensus on more employment red-tape risks hitting UK economy

Zero-hours contracts have been much maligned, despite survey evidence showing high levels of satisfaction with the arrangement among many of those who use them. The Labour party says it would ban such contracts altogether, but while they should never be used as a long-term substitute for contractual employment, doing away with them would hit those who rely on them – including students and the seasonal or event-based firms who offer them.

The gig economy, synonymous with firms such as Deliveroo and Uber, is also facing scrutiny from policymakers. People in this type of work are not classified as employees, and often have precious few of the rights and protections of traditional employment.

Read more: Zero-hours contracts: Review set to back right to demand fixed contract

The Taylor Review, due to be published this week, seems likely to propose a new category of “dependent contractor” for those working in the gig economy, that could improve the rights of workers without compromising the flexibility that makes such work viable.

Labour market regulations should be reformed with both the worker and the company in mind, not least since new research by PwC, out today, shows that while most people still favour full-time employment, a significant amount (45 per cent) would consider working in the gig economy with the same percentage of millennials saying they would take a zero-hours contract if it suited their lifestyle at the time.

However, fears over employment rights are acting as a deterrent for this type of work (which is on the rise) and so it’s right that as the labour market changes, the regulations keep pace.

Read more: UK employment rate reaches record high

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