With the Taylor review now published employers may want to re-consider the nature of their employment relationships; or perhaps not.
Buy anything online today and the odds are that it will be delivered to your door by a gig worker. Someone who is not protected by mainstream employment legislation and whose earnings, quite likely, will be below those of the equivalent employee. Gig workers are usually more pressured, as you may have noticed in the way they hand your package over.
Your elderly mother’s carer, your office cleaner even the sales assistant in your local shop may well be on a “zero hours” contract – paid only for the hours they are actually working. Love them or hate them zero hours contracts are the outcome of competition. All businesses are up against those who can deliver similar services for lower cost. The majority of consumers today seek lower cost.
By pushing up the minimum wage, and now the living wage way beyond inflation, businesses have a stark choice. Charge the consumer more or find ways of reducing wages costs. The result is “creative employment” where entrepreneurs create new models of employment. These reduce employment costs and, often concurrently, reduce costs to the consumer – “free delivery” being one example. Companies with good brands (consumer and employer brands) find themselves obliged to use these entrepreneurial suppliers if they are to retain their market share.
The Taylor review and Theresa May are up against the same forces that caused Harold Wilson’s “Prices and incomes” policy of the 1960s and James Callaghan’s 5% pay policy of the 1970s to fail. The latest concept of ‘dependent contractor’ is no other than a further attempt to regulate incomes and hence the labour market. However the unemployment level is 1.8% in Cumbria and 2.8% in Lancashire. Furthermore, if the low pound makes the UK less attractive to workers from abroad then there may be increasing pressure on the labour supply. If there is pressure on the labour supply then “creative employment” may reduce as businesses compete for labour and consumers will be obliged to pay more for their deliveries, elderly care and weekly shop. But if instead there is a supply of labour prepared to work for lower incomes, entrepreneurs will continue to seek ways around wage regulation and there will be a succession of legal processes seeking to prevent them.