The Taylor review – what recruiters need to know

11 Jul 2017


So now have it… the Matthew Taylor review into modern working practices was published today after months of discussion. We have a few areas of concern that we’ll be taking up with government, but overall it’s encouraging to see the report (and the PM herself) recognise the value of the agency sector to our economy and jobs market.

We were at today’s launch event to discuss Taylor’s recommendations. As we perused the report’s 116 pages, it was great to see REC data quoted and a number of our policy suggestions – in particular regarding the apprenticeship levy – taken on board.

As a follow-up to our initial response, here’s a summary of the key takeaways of interest for our industry.

The benefits of flexible staffing are recognised

The report recognises that “agency work has an important part to play in a vibrant market and many choose to work in this way”, and goes on to make recommendations around issues such as workplace progression, effective enforcement and clarity over employment status and worker rights. The REC called for action on these issues so we’re very encouraged by the direction of travel.

It’s not all about regulation

The report argues that the best way to achieve better work is not through national regulation but via responsible corporate governance. We agree with that approach, and we’ve backed calls for greater worker voice in the workplace to support and ensure good management practice. In fact, next week the REC will launch research with the Involvement and Participation Association addressing that very issue.

Ensuring that all workers – irrespective of what type of contract they are on – are well managed and treated with respect is a core element of the ongoing Good Recruitment Campaign.

We need a level playing field for gig workers

The report recommends that a separate ‘worker’ status is maintained (although the suggestion is that this could be referred to as ‘dependent contractor’ status) as a way to differentiate between gig workers and legitimately self-employed people.

We agree that the current ‘worker’ definition which is used in various pieces of legislation, (e.g., Working Time Regulations/NMW/pensions) should be amended to bring the ‘gig economy’ type of work into scope. There have already been ET judgments finding that some of these individuals are covered by the definition anyway.

Right to request must be balanced

One of the recommendations is to “introduce a right to request a direct contract of employment for agency workers who have been placed with the same hirer for 12 months”. The only obligation on the hirer would be to consider the request in a reasonable manner, but this could create bureaucracy without necessarily adding any value.

REC data, which is quoted in the report, shows that only 4.3 per cent of assignments are longer than 12 months – and existing requirements under AWR already provide agency workers with access to employer vacancies. Our data also shows that nearly a quarter of employers transfer at least half of their temporary workers onto a permanent role each year, so we have questions about the value of this recommendation.

We will discuss this and other areas (such as the need for employers to report on their use of long-term flexible staff) with REC members and government officials over the coming weeks.

Swedish derogation and AWR enforcement

The report recommends that the Swedish Derogation should be repealed, and that the Employment Agency Standards Inspectorate (EASI) should police AWR compliance. Our view is that the focus should be on ensuring that the way the derogation is used complies with the regulations and that any changes should be based on evidence.

On the EASI point, whilst we are in favour of effective enforcement activities, the AWR confers individual employment rights and we have not seen any evidence the supports the need for this to change. There would also be significant resourcing implications for already over-stretched government enforcement bodies.

Boosting progression and the apprenticeship levy

The report argues that everyone should have attainable ways to strengthen their future work prospects and we fully support this. The recruitment industry is well-place to provide progression opportunities and we’re delighted to see the specific recommendation that the Apprenticeship Levy should be looked at again so that it works better for agency workers.

There’s plenty to reflect on and we’re looking forward to helping the government move forward with these recommendations. We’re expecting an official response from government in the autumn, which gives us a good window for working with ministers and officials to shape the final outcome. To get the ball rolling we’re meeting the new Secretary of State for Work & Pensions, David Gauke this week, and we will be engaging with REC members on specific recommendations within Matthew Taylor’s wide-ranging report.

In the meantime, a big thank you to all members who fed into our official response and took part in the consultation meetings. This was a great example of our industry coming together and presenting a strong voice about the value of recruitment to the jobs market and the UK economy.

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