Flexibility and entrepreneurial flair have long been the cornerstone of British business.
But while innovative employment arrangements, such as those seen in the gig economy, have promoted homegrown and international businesses, the UK still suffers from low productivity.
Of all of the EU states, UK workers work the longest hours and endure the lowest productivity, with 15m days lost to stress and depression each year.
Working alongside Matthew Taylor on his review of modern employment practices, my fellow panel members and I heard firsthand of the impact poor practices can have on productivity as the Review travelled the country to meet with businesses industry wide. The evidence was clear: a fair, just system of employment is key to boosting the UK’s productivity.
Business to worker communication and access to information about rights in the workplace are both crucial to delivering this system. While safeguarding the rights of those working in the gig economy has dominated headlines, overhauling employment practices goes far beyond this.
Defining the rights of gig economy workers, while retaining flexibility, is of course crucial. But the Taylor Review is an opportunity to kickstart widespread cultural change across all sectors. Now is the time to shift our attitude to work and the impact it can have on our lives. In doing so, we can address the spectre of low productivity.
Clarity, flexibility, transparency and equality are watchwords for the Review. Shedding light on how dependent contractors (formerly workers) and the self-employed are classified will have far-reaching implications for many, as rights and responsibilities are more clearly outlined in law and guidance.
Many businesses do protect workers and want to operate by the book, but some lack awareness of how this should be done. This confusion, combined with those who intentionally flout the law, stifles progress and needs to be addressed urgently.
Clarifying the law and outlining terms of employment from day one will secure access to holiday pay, national minimum wage and sick pay for workers who are incorrectly classed as self-employed, if the Review’s proposals are accepted.
Of course, for businesses in the UK, these proposals could increase costs. But with proper workforce engagement, productivity will be boosted in turn. If the Review’s recommendations are taken onboard, the resultant reduction in absences and the benefits of a healthier, happier workforce will surely offset any hike in costs.
To get ahead of the game and to understand the impact of a potential legislative shift on the horizon, businesses should carry out a detailed workforce audit to understand the composition and status of all workers and their and level of engagement.
The Review hopes to demystify how employees and workers are classified and to encourage much better workforce engagement. But there will remain a need for an employment tribunal process. This must allow individuals to challenge their status and hold employers who flout the law to account.
At present, many workers lack the knowledge and financial backing to bring an employment tribunal claim. This limited access to justice must be tackled. The Review recommends tribunal fees should be waived where status of a worker is the issue being challenged, and that the balance of proof should be shifted to the employer together with more stringent punitive measures for those flouting the law.
While workers’ rights and responsibilities are at the heart of the Taylor Review, it recognises that maintaining a healthy balance between protecting those rights, enhancing employee engagement, and supporting innovation and flexibility must be struck if we are to retain our reputation as an entrepreneurial economy.
As we wait for the government to respond to our recommendations, businesses should already start thinking about how they can achieve a positive and more productive working environment, for all their workers.