Dead On Arrival The IWG [s reply to the · PDF fileThe IWG [s reply to the Taylor Review on Modern Employment Practices Dead On Arrival

The IWGB’s reply to the

Taylor Review on

Modern Employment

Practices

Dead On

Arrival

I freely admit that I’m more of a nudger than a shover; that is to say my view

is that the best way to tackle problems is often through a series of small,

thoughtful interventions rather than trying to wave a big stick.

- Matthew Taylor in the Guardian Politics Weekly Podcast, 13 July, 2017

In short, many of Britain’s labour-market problems could be solved simply by

enforcing existing law more zealously. Abolishing employment-tribunal fees

would be a step forward, as would beefing up the tax office. Yet the review

tiptoes around these issues. If Mrs May is serious about improving the lot of

workers she will have to be bolder.

- The Economist, 13 July, 20171

1https://www.economist.com/news/britain/21725036-many-labour-market-problems-would-be-solved-simply-enforcing-existing-law-self-employed-or?fsrc=scn/tw/te/bl/ed/selfemployedoremployeebritainwrestleswiththegigeconomy

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Dear Matthew Taylor,

We are elected officials of the Independent Workers’ Union of Great Britain (IWGB) and/or lead claimants

in recent employment status test cases in the so-called “gig economy” 2. We are writing to express our

profound dismay with your “Good Work” report for the following reasons:

BACKGROUND

Your Review

1. On 1 October, 2016, the Prime Minister commissioned the Independent Review of Employment

Practices in the Modern Economy, to focus primarily on the “implications of new forms of work,

driven by digital platforms, for employee rights and responsibilities, employer freedoms and

obligations, and our existing regulatory framework surrounding employment”3.

2. The review was to be headed by you, Chief Executive of the Royal Society of the Arts, supported

by a “panel of experts” made up of:

a. Paul Broadbent, Chief Executive of the (then) Gangmasters Licensing Authority (GLA);

b. Greg Marsh, Founder and Formerly Chair and Chief Executive of onefinestay; and

c. Diane Nicol (Employment Lawyer), Partner at Pinsent Masons law firm.

3. The launch of the review was in large part a response to the rise of the so-called “gig economy”.

Although attempts at strict definitions for this sector often prove illusive, the term usually refers

to work which is paid on a piece rate basis or work for which an app is used and is often associated

with couriers, food delivery, and private hire drivers, Deliveroo and Uber being the best-known

examples. The so-called “gig economy” is also characterized by the widespread deprivation of

employment rights; couriers, food delivery workers, and private hire drivers are rarely given paid

holidays, sick pay, or other basic rights by their employers. It is understood that the Review was

also set up to look at other issues related to insecure work such as 0 hours contracts.

2 Reference is made to the ‘so-called “gig economy”’ because it is our position that the term in itself is misleading. It implies a number of financially independent individuals are doing an odd-job here or there to supplement their income. Our experience is very different: many of the workers in this sector are dependent on these jobs as their primary source of income. 3 https://www.gov.uk/government/groups/employment-practices-in-the-modern-economy

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Us

4. The IWGB is a new and small trade union which represents predominantly low paid migrant

workers, workers in the so-called “gig economy”, and others in atypical work. Our membership

includes cleaners, security guards, catering staff, including some who are on 0 hours contracts,

foster care workers, couriers, food delivery workers, and private hire drivers.

5. With the exception of a small minority of directly employed university employees, nearly all of

our membership are in some form of “atypical work” and/or on low pay. From outsourced

cleaners to the foster care workers with no employment status, to Uber drivers whose rights are

not being enforced, no group of people is in greater need of change than a representative cross-

section of IWGB membership.

6. Over the past couple years the IWGB has been campaigning for better pay and rights for couriers

and food delivery workers. We have also been waging test cases to ensure these workers enjoy

their legal entitlement to basic employment rights.

7. Some of the signatories to this letter have been and/or are lead claimants or witnesses in the

recent employment status test cases which have been in the news:

a. Dewhurst v CitySprint UK Ltd (ET case 2202512/2016, 5 January 2017);

b. Boxer v Excel Group Services Ltd (ET case 3200365/2016, 23 March 2017);

c. Boxer v CitySprint UK Ltd;

d. IWGB v Roofoods Ltd T/A Deliveroo ;

e. Aslam & Ors v Uber & Ors [2017] IRLR 4; and

f. Kowal & Ors v The Doctors Laboratory (ET cases 2200444/2017, 2200445/2017,

2200446/2017, 2200447/2017, and 2200448/2017).

The Issues

8. For present purposes there are three main categories under which individuals can perform work:

employee, independent contractor who carries on a profession or business undertaking on their

own account and engages with clients or customers, and limb b worker. It is important to be

very clear on what the differences are as the delineation between these three categories go to

the heart of the debate around how to address the wide-scale deprivation of employment rights

in the so-called “gig economy”. Of particular importance:

a. An employee is what it sounds like: someone who works under the control of an employer

and has an on-going understanding with that employer about when they are expected to

work and what that work is supposed to look like. An employee is on PAYE; the employer

makes tax deductions from their pay and pays national insurance contributions in respect

of their employment. An employee has the maximum number of employment rights.

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b. An independent contractor who is in business on their own account, referred to here by

the short-hand of independent contractor4 is self-employed, has clients or customers,

and is genuinely running their own affairs. They do their own taxes and for the most part

do not have employment rights as they have no employer.

c. A limb b worker, usually referred to as simply a “worker”5 for short, is also self-employed,

however they are self-employed people who carry out their work as part of someone

else’s business rather than as part of their own business. For this reason they are entitled

to some, but not all, of the employment rights that employees have. Importantly,

workers are covered by trade union rights, minimum wage, paid holidays, automatic

employer pension contributions, and protection from discrimination. They do not

however have a right to statutory sick pay, statutory maternity/paternity pay, or a right

to claim unfair dismissal. As workers are self-employed, they do their own taxes and the

“employer”6 does not make national insurance contributions on their behalf7.

9. One can see that the above descriptions are somewhat different from the normal portrayal in the

media of the three categories being “employee, worker, and self-employed”. As “worker” is a

sub-category of self-employment, it is patently incorrect to present “worker” and “self-employed”

as two distinct and mutually exclusive categories. This is incredibly important not just because of

the tax implications, but also because of how many who work in the so-called “gig economy” self-

identify. They often (but not always) set their own hours, they have more flexibility and autonomy

than the average employee, and they rightly benefit from more favourable tax arrangements

4 Although technically a limb b worker could be considered an “independent contractor” in the sense that they provide work pursuant to a contract for services rather than a contract of service, for ease of reference we shall use the term “independent contractor” as a shorthand for those self-employed people who truly are independent providers of services and who are not limb b workers. We use this terminology in the same way as Sir Terrence Etherton MR in Pimlico Plumbers Limited & Anor v Gary Smith [2017] EWCA Civ 51:

3. The case puts a spotlight on a business model under which operatives are intended to appear to clients of the business as working for the business, but at the same time the business itself seeks to maintain that, as between itself and its operatives, there is a legal relationship of client or customer and independent contractor rather than employer and employee or worker.

5 The reference to “limb b” comes from the fact that employment rights statutes tend to define “worker” as encompassing two different sub-groups: limb a workers which are employees, and limb b workers which are the type described above. As “worker” is normally used as a shorthand for “limb b worker”, this letter will also refer to limb b workers simply as workers for the sake of simplicity. 6 Although somewhat counterintuitive to refer to someone who engages a self-employed person as an “employer”- this is nevertheless the term often used to cover those business who engage limb b workers, in recognition of the fact that the limb b worker is carrying out their work as part of the “employer’s” business and not their own. As such this letter will also refer to those who engage limb b workers as “employers”. 7 Tax law does not share employment law’s three-tiered approach but rather categorises individuals on a binary basis: they are either employees or self-employed (the latter including workers and independent contractors).

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which account for the fact that unlike an employee (who doesn’t have to rent their desk), workers

often have to invest in the tools of their trade, e.g. motorbikes, protective equipment, cars, etc.

10. One of the most striking features of debate around workers’ rights in the so-called “gig economy”

is the degree to which the media, the Government, some employment lawyers, thinktanks and

others consistently inaccurately characterize the current state of the law, in particular on the issue

of whether workers are a category of self-employment. This is all the more striking given the

absolute clarity of the current position, as set out in paras 24, 25, and 31 of the judgment of the

Deputy President of the Supreme Court, Lady Hale, in her judgment in one of the leading

employment status cases before the Supreme Court: Clyde & Co LLP & Anor v Bates van Winklehof

[2014] UKSC 328:

24. First, the natural and ordinary meaning of “employed by” is employed under

a contract of service. Our law draws a clear distinction between those who are so

employed and those who are self-employed but enter into contracts to perform

work or services for others.

25. Second, within the latter class, the law now draws a distinction between two

different kinds of self-employed people. One kind are people who carry on a

profession or a business undertaking on their own account and enter into

contracts with clients or customers to provide work or services for them. The

arbitrators in Hashwani v Jivraj (London Court of International Arbitration

intervening) [2011] UKSC 40, [2011] 1 WLR 1872 were people of that kind. The

other kind are self-employed people who provide their services as part of a

profession or business undertaking carried on by some-one else. The general

medical practitioner in Hospital Medical Group Ltd v Westwood [2012] EWCA Civ

1005; [2013] ICR 415, who also provided his services as a hair restoration surgeon

to a company offering hair restoration services to the public, was a person of that

kind and thus a “worker” within the meaning of section 230(3)(b) of the 1996 Act.

...

31. As already seen, employment law distinguishes between three types of

people: those employed under a contract of employment; those self-employed

people who are in business on their own account and undertake work for their

clients or customers; and an intermediate class of workers who are self-

employed but do not fall within the second class9.

8 https://www.supremecourt.uk/cases/docs/uksc-2012-0229-judgment.pdf 9 It is true that various of the key employment rights statutes have slightly different definitions of “worker” which is not particularly helpful. For example, whilst the Working Time Regulations 1998 and the National Minimum Wage

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11. Couriers, food delivery workers, and private hire drivers do not usually claim to be employees.

The issue tends to be whether they are independent contractors or workers. The answer to the

question does not affect their self-employed status, but it does of course have a major impact on

their entitlement to employment rights. Unsurprisingly, the companies say these people are

independent contractors and often compel the individuals to sign documents agreeing to that,

and we say the individuals in question are workers. In some even more absurd examples, the

companies say the main contractual relationship is between the customer and the individual

working, not between the company and said individual.

12. Following the defining Supreme Court case of Autoclenz Limited v Belcher & Ors [2011] UKSC 4110,

the law is clear that tribunals and courts need to look at the actual working relationship between

the parties; the signed “contract” will not necessarily be determinative. Because of the incredible

extent of asymmetrical bargaining power between a putative employer and a putative worker or

employee, the fact that an individual signs a document stating they are an independent contractor

does not necessarily mean they are one. In this regard, every employment lawyer who has argued

a case around employment status is familiar with the well-known passage from Elias J in the

Employment Appeal Tribunal case of Consistent Group Ltd v Kalwak [2007] IRLR 560, cited at para

25 of the Autoclenz judgment:

57. The concern to which tribunals must be alive is that armies of lawyers will

simply place substitution clauses, or clauses denying any obligation to accept or

provide work in employment contracts, as a matter of form, even where such

terms do not begin to reflect the real relationship.

13. “Gig economy” employers have lawyered up and riddled their contracts with bogus clauses.

Luckily for the workers however, the tribunals have seen through this. In the Uber, CitySprint, and

Excel cases the judges have held that the individuals in question were workers and not

Act 1998 have a virtually identical definition, the Trade Union and Labour Relations (Consolidation) Act 1992 has a slightly different definition. Similarly, the Equality Act 2010 has an extended definition of “employee” which in this case includes workers. The Transfer of Undertakings (Protection of Employment) Regulations 2006 also has an extended definition of employee which appears to include workers. The tediousness of the matter is further increased when one considers the terminology of EU law- upon which much of UK employment law is based- in which “worker” has an autonomous meaning (which would normally include the UK definition of worker) and in which the term “employment relationship” would normally encompass the connection between a UK worker and his/her “employer”. Additionally, the European Convention of Human Rights, which is relevant to some aspects of UK employment law (in particular regarding discrimination and trade union rights), does not refer to workers or employees but rather to people with such terms as “everyone” or “no one”. However, notwithstanding all of this tedious detail, it is widely accepted that UK employment law recognizes three main categories, as succinctly summed up in the passages from Lady Hale cited above. 10 https://www.supremecourt.uk/cases/docs/uksc-2009-0198-judgment.pdf

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independent contractors. They also held that the employers had been unlawfully depriving these

workers of employment rights to which they were legally entitled. Despite the fantastical

narrative of these employers that the law is so muddled and confused they couldn’t possibly know

where they stand, the scathing prose of some of these judgments leaves little doubt about the

supposed lack of clarity in the law. For example, in Uber, Employment Judge Snelson stated11:

87. In the first place, we have been struck by the remarkable lengths to which

Uber has gone in order to compel agreement with its (perhaps we should say its

lawyers’) description of itself and with its analysis of the legal relationships

between the two companies, the drivers and the passengers. Any organisation

(a) running an enterprise at the heart of which is the function of carrying people

in motor cars from where they are to where they want to be and (b) operating in

part through a company discharging the regulated responsibilities of a PHV

operator, but (c) requiring drivers and passengers to agree, as a matter of

contract, that it does not provide transportation services (through UBV or ULL),

and (d) resorting in its documentation to fictions, twisted language and even

brand new terminology, merits, we think, a degree of skepticism. Reflecting on

the Respondents’ general case, and on the grimly loyal evidence of Ms Bertram

in particular, we cannot help being reminded of Queen Gertrude’s most

celebrated line:

The lady doth protest too much, methinks.

88. Second, our skepticism is not diminished when we are reminded of the many

things said and written in the name of Uber in unguarded moments, which

reinforce the Claimants’ simple case that the organisation runs a transportation

business and employs the drivers to that end. We have given some examples in

our primary findings above. We are not at all persuaded by Ms Bertram’s

ambitious attempts to dismiss these as mere sloppiness of language.

89. Third, it is, in our opinion, unreal to deny that Uber is in business as a supplier

of transportation services. Simple common sense argues to the contrary. The

observations under our first point above are repeated. Moreover, the

Respondents’ case here is, we think, incompatible with the agreed fact that Uber

markets a ‘product range.’ One might ask: Whose product range is it if not

Uber’s? The ‘products’ speak for themselves: they are a variety of driving

services. Mr Aslam does not offer such a range. Nor does Mr Farrar, or any other

solo driver. The marketing self-evidently is not done for the benefit of any

individual driver. Equally self-evidently, it is done to promote Uber’s name and

11 https://www.judiciary.gov.uk/wp-content/uploads/2016/10/aslam-and-farrar-v-uber-reasons-20161028.pdf

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‘sell’ its transportation services. In recent proceedings under the title of Douglas

O’Connor-v-Uber Technologies Inc the North California District Court resoundingly

rejected the company’s assertion that it was a technology company and not in

the business of providing transportation services. The judgment included this:

Uber does not simply sell software; it sells rides. Uber is no

more a “technology company” than Yellow Cab is a “technology

company” because it uses CB radios to dispatch taxi cabs.

We respectfully agree.

90. Fourth, it seems to us that the Respondents’ general case and the written

terms on which they rely do not correspond with the practical reality. The notion

that Uber in London is a mosaic of 30,000 small business linked by a common

‘platform’ is to our minds faintly ridiculous. In each case, the ‘business’ consists

of a man with a car seeking to make a living by driving it. Ms Bertram spoke of

Uber assisting the drivers to “grow” their businesses, but no driver is in a position

to do anything of the kind, unless growing his business simply means spending

more hours at the wheel. Nor can Uber’s function sensibly be characterized as

supplying drivers with “leads”. That suggests that the driver is put into contact

with a possible passenger with whom he has the opportunity to negotiate and

strike a bargain. But drivers do not and cannot negotiate with passengers (except

to agree a reduction of the fare set by Uber). They are offered and accept trips

strictly on Uber’s terms.

And this section of the judgment carries on for another six points.

14. Similarly, in CitySprint12, Employment Judge Wade said:

29.1 The substitution clause 3.5 in the Tender is contorted and self-destructive.

It grapples with the conflict between the desire to have such a clause and the

reality that the CitySprint brand cannot be put at risk by the use of arms-length

substitutes. The effect is so prescriptive that only couriers who are already on

circuit would in practice be able to substitute.

…

54. The respondent’s opening outline says:

“The respondent operates courier services around the UK. Self-

employed van drivers, motorcycle riders and cycle couriers all

12 http://www.egos.co.uk/ir35_cases/Dewhurst_v_City_Sprint_2016.pdf

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make their services available to CitySprint, on relevantly the same

terms.”

By contrast, when Ms Dewhurst was questioned she said:

“I work hard for them so that they can maintain their relationship

with their clients.”

55. Not only is the phrase “make their services available” as opposed to “work

for” a mouthful, it is also window dressing and I find Ms Dewhurst’s description

to be more accurate. Her phrase expresses not only that she provided her

services personally but that CitySprint was not her customer but her employer.

…

64. The very title of the document “Confirmation of Tender to supply Courier

Services to CitySprint” arouses the suspicion that the contract may have been

generated by the “army of lawyers” described by Mr Justice Elias in Kalwak.

…

78. I have no doubt that the claimant was working not for herself with CitySprint

as her customer but on the respondent’s behalf. Couriers out on the road on

their own bicycle enjoy a certain amount of freedom (sometimes this is the

freedom to get very cold and, at worst, have an accident for which they receive

no sick pay) but the network of connections back to CitySprint is very sturdy. The

claimant and her cycle courier colleagues are:

78.1 Expected the work when they say they will

78.2 Directed throughout the time that they are on circuit

78.3 Instructed to “smile with you greeting” and wear the uniform

78.4 Told what to do if the parcel cannot be delivered as instructed

78.5 Told when they will be paid and paid according to the respondent’s

formula after it has made deductions

78.6 Told that they are part of the “family” who the respondent describes

as “our couriers” on many occasions.

15. Sometimes the employers even find it difficult to maintain their farcical narrative among their

own staff, who are supposed to promulgate that narrative with the couriers and drivers. EJ Wade

recounts a cute little anecdote in her judgment in the CitySprint case:

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50. There is a recording of a conversation between Mr Katona and a controller

called Ian. Mr Katona had a problem with an item which he had collected but

could not deliver at the end of the day because the premises were shut. As

trained in the induction, he telephoned the controller for instructions. When he

asked whether he could do what he wanted with the item the controller replied

(and I quote from the respondent’s recording):

“no, I’m afraid so, I’m afraid you can’t really - I mean that’s all

bullshit- as we all know isn’t it… That you self employs [sic] can

do exactly what you want – I mean if that was the case we

wouldn’t have a business would we, really?”

The controller subsequently tried to explain his comments away in an email but

did not come here to give evidence.

16. In addition to the emphatic judgments in the Uber, CitySprint and Excel cases, in two other cases

(Kowal & Ors v The Doctors Laboratory and Flanore v eCourier), the companies admitted that the

claimants were workers and that they had been unlawfully depriving them of rights. Undoubtedly

their legal advice was that the law was clear: if the matters proceeded to tribunal on this point

the companies would lose.

17. You’ll have to forgive the extent to which we have quoted judgments above, however it is

absolutely crucial that one understands what the problem is before being able to suggest a

solution. Based on the Review’s proposals we are not sure the Review has properly understood

the problem. So let’s sum it up: the fundamental problem of employment rights in the so-called

“gig economy” is the lack of enforcement of existing employment law. Despite the oft-repeated

cliché that UK employment law is archaic and has failed to keep up with the times13, the recent

tribunal and court cases have demonstrated the exact opposite. The existence of the third

category of “worker”, the ability and willingness of the tribunals and courts to look beyond the

written terms of the purported contract, and the emphatic nature with which the judges have

declared their findings all lead to the conclusion that the law did not have to be stretched or

reconfigured to cover workers in the so-called “gig economy”.

18. Given that the fundamental problem is the failure of employers to obey the law, a proper

diagnosis would ask why this occurs. The answer is not rocket science:

a. There is virtually no government enforcement of employment law, and what little

enforcement there is tends to be incredibly half-hearted and ineffective.

b. There are almost no consequences whatsoever for employers unlawfully classifying their

workers as independent contractors. The implication of the CitySprint judgment was that

13 For example see the ridiculous YouTube video in which Deliveroo CEO and Founder Will Shu says he is going to “campaign the government” to allow him to give sick pay to riders as currently employment law doesn’t allow this: https://www.youtube.com/watch?feature=youtu.be&v=JRzC-JllvYA&app=desktop.

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the company had been unlawfully depriving its couriers of employment rights to which

they were legally entitled for years. The consequence? They had to pay two days’ holiday

to the claimant. No fine, no sanction, no incentive to obey the law.

c. Employment tribunal fees, introduced in July 2013, have resulted in a drop in tribunal

claims of nearly 70% due to the strong deterrence effect of having to pay substantial sums

to assert your rights.

In sum, when there is virtually no government enforcement of existing law, virtually no

consequences for unlawful behaviour, and when claimants find it almost impossible to assert their

rights in tribunal, it is entirely unsurprising that there is such widespread unlawful behaviour.

19. In light of the above, and in recognition of the fact that a growing proportion of the workforce

appear to be falling into the category of worker rather than employee, the IWGB has consistently

called for three simple proposals which we believe would go a long way to securing proper

employment rights for people in the so-called “gig economy”:

a. Introduce proper government enforcement of employment law. This means a

government agency or department (or preferably Ministry of Labour, as proposed by the

Institute of Employment Rights14 and adopted in the Labour Party manifesto15) which can

inspect workplaces, build cases against employers, prosecute them, and fine them for

unlawful behaviour.

b. Eliminate employment tribunal fees to make it easier for claimants to assert their rights,

and introduce fines as a result of employers using bogus employment status.

c. Increase the employment rights associated with worker status so that workers enjoy

rights which currently only accrue to employees.

20. The above three suggestions should not be interpreted as the total solution for employment rights

in the so-called “gig economy”, and much less so for the UK labour market overall. Obvious

improvements above and beyond our three key proposals include equalizing the minimum wage

with the real living wage, increasing statutory sick pay, repealing the Trade Union Act 2016, and

much more. For a comprehensive set of recommendations on how to improve employment rights

and working lives see the Institute of Employment Rights’ (IER) Manifesto for Labour Law16, much

of which was incorporated into the Labour Party manifesto.

21. Our three suggestions are rather an extremely modest and reasonable starting point which we

believe would dramatically improve things for workers in the so-called “gig economy”. The fact

that the Economist- which like you deeply cherishes the UK’s flexible labour market- endorses half

of our proposals17 just goes to show indeed how moderate they are.

14 http://www.ier.org.uk/ 15 http://www.labour.org.uk/page/-/Images/manifesto-2017/Labour%20Manifesto%202017.pdf 16 http://www.ier.org.uk/manifesto 17 https://www.economist.com/news/britain/21725036-many-labour-market-problems-would-be-solved-simply-enforcing-existing-law-self-employed-or?fsrc=scn/tw/te/bl/ed/selfemployedoremployeebritainwrestleswiththegigeconomy

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22. As we work our way through the report we will look to see how the Review’s recommendations

stack up to our commonsense proposals. We will also ask the most important question of this

exercise: “if the Review’s recommendations were implemented, would workers in the so-called

“gig economy” be fundamentally better off, or not?”

PROCESS

23. Before we get into the meat of the recommendations, let’s first take a look at how the Review

went about putting them together.

The Panel Members

24. The obvious starting point for a procedural inquiry into the Review is to look at who took part. As

stated above, the Review members consisted of yourself and your “panel of experts”. Whilst we

have no prima facie cause for concern with regard to GLA Exec Paul Broadbent or yourself, the

other two panel members are another story.

25. Let’s start with Diane Nicol, a partner at Pinsent Masons law firm. Pinsent Masons is reputed as

an employer law firm. This can be seen by just a cursory glance at their website18:

Industrial Relations

With the Trade Union Bill making radical changes to the UK’s strike laws, we’re

helping employers understand how these reforms shift the legal and tactical

dynamics around industrial action and the wider impact on their industrial

relations strategies.

And19:

When you face industrial action and leverage campaigns we help you navigate

and resolve the dispute, maximising continuity and productivity for your business.

We can help you to deal with statutory recognition requests, to establish and

maintain productive relationships with trade unions, and to ensure that these

keep pace with changes to business needs, membership density and the shifting

dynamics of union relationships.

Recent experience includes:

18 https://www.pinsentmasons.com/en/expertise/services/employment/ 19 https://www.pinsentmasons.com/en/expertise/services/employment/industrial-relations/

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Advising a major mechanical and engineering contractor in injunction

proceedings in the High Court, seeking to prevent Unite from calling on

employees to take industrial action, on potential High Court damages claims

resulting from unofficial strike action and obtaining an injunction preventing

activists from targeting the home of a senior executive

Advising a national energy supplier on its response to industrial action, with a

focus on business continuity, in particular addressing union attempts to narrowly

interpret contractual rules on working patterns and the Working Time

Regulations to increase disruption

Helping employers to update their recognition agreements with trade unions, to

promote a more constructive relationship with their unions, make collective

consultation more efficient and move towards partnership working

Supporting employers in changing terms and conditions of employment through

collective bargaining with trade unions, identifying negotiating strategies and

collective consultation requirements

Advising a facilities management company on unofficial industrial action,

securing the repudiation of that action by the trade union, and options for

disciplinary action against the organisers

26. Given that one of the defining moments of worker collective activism in the so-called “gig

economy” was the widely reported Deliveroo riders’ strikes in August, 201620, it is highly

concerning that one of the panel members is a partner at a firm which boasts about its strike-

breaking legal advice.

27. Similarly, the Chambers UK guide website says the following about Pinsent Masons21:

Strengths (Quotes mainly from clients)

"They understand the frustration of an employer and support them in obtaining the best resolution."

20 For example, see https://www.theguardian.com/business/2016/aug/15/deliveroo-workers-strike-again-over-new-pay-structure 21 https://www.chambersandpartners.com/11822/23/editorial/1/1

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Work highlights Continues to advise Balfour Beatty on its approach to holiday pay claims and advising how to mitigate further risks and claims.

Acting for Amey Services in an employment tribunal concerning 125 equal pay claims, complicated by the fact that the claimants had TUPE-transferred over to Amey.

28. Not only does Pinsent Masons represent employers in general (the IWGB has had quite a few

tribunal cases where they represented the other side!) but they also have represented the

employer in one of the leading employment status cases: Autoclenz22 (mentioned above). Had

they won that case the employment status litigation landscape would look very different today

and “gig economy” employers would have a much easier time hiding behind their bogus contracts.

Luckily, Pinsent Masons lost the case.

29. It is not just the orientation of the firm which is questionable, but also that of Diane Nicol

individually. For example, in an opinion article in which she apparently attempts to play the

middle ground, she suggests the Government, via ACAS, should be able to block industrial action,

even when the latter is supported by a lawful ballot23:

For industrial disputes, an up-scaled and more powerful Acas would be required

- backed, perhaps, by allowing the government to actively intervene and knock

collective heads together where the public interest requires it; or by preventing

unions from proceeding with industrial action, whether supported or not, until

they have engaged meaningfully in the process.

30. The Pinsent Masons website also markets Diane Nicol’s expertise as being pro-employer24: “She

is a trusted adviser to senior management teams in many large corporations.”

31. Even if Diane Nicol hadn’t published anti-trade union material in the past, and even if her law firm

didn’t have a reputation as pro-employer, it is unclear why you chose a solicitor as the resident

legal expert on the panel, rather than a QC employment barrister or former judge. The advantage

of choosing someone of this background is two-fold:

a. It would have been relatively easy to find someone with extensive recent experience

representing employers, employees/workers and trade unions (or adjudicating cases

between them impartially); and

b. Given the different skill-sets of solicitors and barristers, the latter would normally be in a

better position to get into the nitty-gritty of the case law and prevailing interpretation of

22 See page two: https://www.supremecourt.uk/cases/docs/uksc-2009-0198-judgment.pdf 23 https://www.out-law.com/en/articles/2017/january/does-the-current-rail-dispute-justify-yet-more-reform-to-strike-legislation/ 24 https://www.pinsentmasons.com/en/people/partnersconsultants/diane-nicol/

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relevant statutes, both necessary tasks when attempting to advise on changes to this law.

An employment solicitor from a corporate law firm on the other hand, would be more

suited to advising on how employers deal with employment law on a day to day basis as

well as on how they might cope with any changes in the regulatory regime.

32. Greg Marsh, former founder and CEO of onefinestay, takes the notion of “bias” to a whole

different level. Indeed it is with incredulity that we write the following passages.

33. Greg Marsh was a past investor in Deliveroo, one of the companies at the heart of this Review. It

appears he invested in November, 2014 and the information was publicly available25 (also see

Appendix A). Indeed, when he was asked to be a panel member for the Review he was still a

shareholder. Apparently he agreed to divest but did not do this until end of January, 201726. This

means that Greg Marsh was a Deliveroo shareholder for two months whilst serving on the Review.

How it was not obvious that that ethically compromises the Review is beyond us. We have

submitted a Freedom of Information (FOI) request (see Appendix E) to get to the bottom of exactly

what went on.

34. Even if Greg Marsh had divested all of his shares before becoming a panel member, and even if

the panel wanted to draw on his business expertise, it is at best misleading and at worst utterly

dishonest that the Review did not disclose to the public Marsh’s status as a former Deliveroo

investor. As can be seen by the recent flurry of media coverage of this topic27, it clearly is a matter

of public interest.

35. Marsh’s response to the matter was sorely lacking. According to the FT28 Marsh “attempted” to

sell his stake in November, 2016 but “because Deliveroo is a private company, and relatively

illiquid, it took time to find buyers.” So how did he find a buyer? Who did he sell the shares to?

And how much did he make on the sale? Did Deliveroo buy back the shares at a nice price with a

wink and a nod from Greg Marsh indicating the Review’s recommendations wouldn’t have a major

impact on Deliveroo’s bottom line? As nothing has been publicly disclosed on this we won’t know

until our FOI request has been answered.

25See https://www.sbs.ox.ac.uk/faculty-research/entrepreneurship-centre/events/confessions-entrepreneur-greg-marsh and https://techcrunch.com/2014/06/26/deliveroo/ 26 https://www.ft.com/content/b9248756-8f51-3fd4-9016-67c651da67e0?mhq5j=e2 27 In addition to the FT article, see http://uk.businessinsider.com/onefinestay-founder-greg-marsh-deliveroo-investor-gig-economy-2017-7, http://www.independent.co.uk/news/business/news/matthew-taylor-report-unions-slam-review-which-spectacularly-fails-a7835191.html, https://leftfootforward.org/2017/07/we-need-a-review-into-the-gig-economy-led-by-the-workers-themselves/, https://www.theguardian.com/business/2017/jul/11/may-relaunches-premiership-with-new-protections-for-gig-economy-workers, http://www.belfasttelegraph.co.uk/business/news/government-review-into-gig-economy-employment-rights-branded-feeble-35912359.html, http://www.alphr.com/politics/1006279/taylor-report-calls-for-protections-for-gig-economy-workers, http://www.edp24.co.uk/business/matthew-taylor-review-union-leaders-disappointed-by-missed-opportunity-1-5100574, and https://www.digitallook.com/news/general-news/report-into-uk-gig-economy-slammed-as-wasted-opportunity--2763199.html. 28 https://www.ft.com/content/95392a68-6596-11e7-8526-7b38dcaef614

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36. The Government’s response, seen in the same FT article, was equally pathetic:

A government spokesperson said that “given the importance of considering the

business aspect of any proposals, it was right” that Mr Marsh was involved in the

review.

“Prior to his appointment he disclosed his interest to the Cabinet Office and

agreed to divest himself of his shares.”

So given the impact on business a “gig economy” investor was justified in being on the panel,

however given the impact on workers neither a worker nor a trade union official were justified in

being on the panel?

37. Again, even if Greg Marsh had divested all of his Deliveroo stake before serving on the Review

(which is not the case) it is nothing short of ludicrous that in the entire United Kingdom, you

couldn’t find someone you thought more suited to the task of making recommendations on

employment rights for workers in the so-called “gig economy” than a former Deliveroo investor.

Even if Marsh didn’t stand to gain financially by recommending light-touch policies, the fact that

he was willing to invest in a company like Deliveroo speaks volumes on how much he values

workers’ rights.

38. The appointment of Marsh is all the more striking in the absence of any worker or trade union

representation on the panel. And no, Paul Broadbent does not count as a worker representative.

He represents Government, a very different thing.

The “Consultation”

39. It is bad enough that the panel was heavily biased towards employers and away from workers,

trade unions, and other worker-representative bodies. However, the method in which the Review

“consulted” didn’t do much to compensate for the lack of input on the workers’ perspective.

40. Indeed, the launch event in London felt like an academic conference, not a consultation. There

were a handful of guest speakers presenting in different panels; the trade unions said their bit

about insecure work, the employer organisations said their bit about a flexible labour market, and

you said virtually nothing. The audience members- which had to apply for tickets to attend-

seemed pretty heavy on journalists, lawyers, and thinktank types and pretty light on “gig

economy” workers. Whilst intellectually engaging it felt a lot more like you were putting on a

18

show than trying to get to the bottom of the problem. The event marketing material even pitched

the opportunity to attendees of being able to “network”29.

41. The Review requested that our General Secretary speak at one of the other events. We made

clear that he or someone else from the IWGB would be happy to be a guest speaker but that we

first wanted to arrange a 1-2-1 meeting with you in order to work through some of our policy

proposals. This is because if the London event was anything to go by, the speaking events were

not fora conducive to getting into the detail of policy, having a proper back and forth, being able

to ask and answer questions, or being able to share anything on a confidential basis. In sum,

whilst beneficial in that the event would be one more opportunity for the IWGB to communicate

its proposals in broadbrush form, it was nonetheless far too superficial for any meaningful

engagement between the Review and the union which has been at the forefront of fighting for

employment rights in the so-called “gig economy”.

42. Our General Secretary wrote to you on 17 February, 2017 on the terms outlined above (see

Appendix B). He received no response.

43. On 22 February, 2017 your Head of Secretariat wrote to our General Secretary to request again

that he speak at one of your events. He responded again stating that the IWGB would be happy

to send a speaker once a 1-2-1 meeting had been scheduled with you (see Appendix C). He

received no response.

44. On 22 March, 2017 our General Secretary followed up his email to you from over a month prior.

You did not respond to this email however he did receive an email the same day from your Head

of Secretariat saying she had emailed offering a meeting with “the relevant Govnt. Policy officials

who are feeding into the review, as Matthew’s diary is so busy.” Our General Secretary responded

on the same day saying: i) he had not received said email; ii) requested the email be re-sent; iii) it

was unfortunate you yourself could not make time; and iv) asking that your decision not to meet

with us be reconsidered. He received no response. See Appendix D for the full exchange.

45. The failure to engage with us is all the more startling given that you have shown essentially no

reservations about fully engaging with the “gig economy” employers; and we are not just referring

to Greg Marsh. For example, the Review collected data from and collected surveys administered

by Uber30. You see, the point that so sorely seems to be lost on the Review, is that these

employers are not neutral arbiters or innocent stakeholders caught up in the game: they are

blatantly disregarding the law and when challenged they spare no expense on lawyers to try and

defeat any assertion of workers’ rights by the people upon whom their businesses rely.

46. Your refusal to find an hour in your calendar to meet with us is also all the more astonishing given

the incredible amount of free time you have found in your diary to meet with journalists. Ever

the media-savvy and astute political operator, your tactics are actually quite impressive from a

29https://www.eventbrite.com/e/modern-employment-review-london-tickets-31152223138?utm_campaign=new_attendee&utm_medium=email&utm_source=eb_email&utm_term=event_name 30 http://www.uphd.org/press-release-is-uber-gaming-the-matthew-taylor-review/

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self-serving marketing point of view. Your form of “consultation” on workers’ rights appears to

be you meet with a broadsheet journalist, you float a couple “possible” recommendations, the

journalist duly writes up your proposals, and then you gauge the public and political reaction.

Whilst this will no doubt give you some advance warning of how your recommendations will play

in the mainstream press, with Number 10, and to a certain degree in the court of public opinion,

these tactics alone do not ensure you have the faintest clue about the workers’ and unions’

perspectives on these matters.

47. Finally, it is hard to interpret a refusal to engage with IWGB as anything other than a deliberate

political move in light of how you describe your approach to consultations in the Forward of your

report31:

From the outset I was determined that the Review process should be open and

engaging. We held public hearings around the country, Review members and

officials hosted innumerable round table and small group discussions, across just

about every week of the Review’s ten month life I have made speeches to

audiences small and large, specialist and general.

The Narrative

48. The “gig economy” employers’ favouritve narrative is to portray flexibility and employment rights

as mutually exclusive trade-offs. For example, following the tribunal stating that Uber drivers

were not independent contractors, Jo Bertram, the company’s regional manager in the UK, said:

“The overwhelming majority of drivers who use the Uber app want to keep the freedom and

flexibility of being able to drive when and where they want.”32 Similarly, in response to an IWGB

campaign over pay for Deliveroo riders in Brighton, a spokesman for the company said: “The IWGB

does not accurately represent the majority of our riders who overwhelmingly support the

flexibility and good pay which comes with being self-employed.”33 And so the media reporting, in

an admirable aim of fairly presenting both sides of the debate, therefore often presents flexibility

and employment rights as a trade-off. This is the so-called gig economy’s false dichotomy34.

49. There is nothing, either logically or legally, to suggest that “workers” can’t work flexibly. In fact,

all of the evidence suggests the opposite. The court judgments have looked at the reality of the

working relationship between workers and employers, including a detailed review of the amount

of flexibility allowed, and nonetheless concluded that the CitySprint courier and the Uber drivers

31 Page 5 32 https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status 33http://www.theargus.co.uk/news/local/brighton_hove/15156740.Delivery_riders_hopping_mad_over_low_wages/ 34 For more on which, see https://www.theguardian.com/commentisfree/2017/mar/22/rights-gig-economy-self-employed-worker.

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were workers. In the Uber case it was acknowledged that the drivers turned the app on and off

when they liked – it is hard to imagine a more flexible working arrangement – and they were still

found to be workers. Indeed, were an employer to deny workers this flexibility we would instead

argue that they were employees, as we do in the TDL case.

50. Unfortunately, however, throughout the consultation the Review appears to have bought into

this false dichotomy, as can be seen by numerous press communications and interviews35.

51. Incredibly, given that the Review’s task was to among other things recommend changes to

employment law, the Review has consistently inaccurately portrayed the current state of the law.

In particular, the Review repeatedly presented the three employment categories as “employee”,

“worker”, and “self-employed”36, which, as explained above, is patently incorrect. This error is

not some minor technicality raised in a display of pedantry. Rather, this goes to the heart of the

employment status issue and has implications for how workers identify, taxes, and the essence of

having a third category of employment. Given that whilst judges and employers certainly know

the law, the general public and media tend to be confused about the different employment

statuses, it is to say the very least incredibly unhelpful that the Review has added to the confusion.

52. You insisted on your incorrect communications about the law even after the matter was brought

to your attention. For example, at your London launch event our General Secretary explained the

matter to you in person. He did the same again on Twitter and even sent you the Supreme Court

authority on the matter. Incredibly, as late as 30 June, 2017 you were continuing to insist it was

correct to say workers were not self-employed, at least under employment law (see Appendix F).

53. The fact that you continued down this line despite the absolute clarity of the law, knowing it was

incorrect, and having access to some of the UK’s leading employment lawyers, does call into

question whether you were genuinely confused or rather purposely misleading.

54. Needless to say, the “evidence” the Review collected is obviously tainted by the Review’s

inaccurate description of the law. For example, the surveys the Review had Uber conducting for

it asked “If you are self-employed, which, if any of these additional resources or rights would you

be willing to give up your self employed status for?” Options offered included the national

minimum wage, holiday pay and sick pay37. Self-employed “workers” however, which Uber

drivers are under current law, are entitled to both holidays and minimum wage. There is no

35 For example, see: http://www.belfasttelegraph.co.uk/business/news/government-review-into-gig-economy-employment-rights-branded-feeble-35912359.html and http://www.telegraph.co.uk/business/2017/07/10/matthew-taylor-defends-zero-hours-deals-paves-way-employment/. 36 For example, see: http://www.telegraph.co.uk/business/2017/06/12/matthew-taylor-outlines-plan-balance-flexibility-fairness-world/, https://www.gov.uk/government/news/taylor-review-on-modern-employment-practices-launches, http://www.telegraph.co.uk/business/2017/07/10/matthew-taylor-defends-zero-hours-deals-paves-way-employment/, http://www.telegraph.co.uk/business/2017/07/10/matthew-taylor-defends-zero-hours-deals-paves-way-employment/, and https://www.theguardian.com/commentisfree/2016/nov/30/rethink-work-taxes-review-modern-employment-gig-economy. 37 http://www.uphd.org/press-release-is-uber-gaming-the-matthew-taylor-review/

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question of having to choose between being categorized as “self-employed” and having access to

these rights.

55. You have referred on a number of occasions to workers in the so-called “gig economy” being

happy with their work. Whilst not dismissing this assertion prima facie, needless to say the

interpretation of such survey results will depend to a large degree on the survey design, the

questions asked, who asked the questions, who answered the questions, etc. We have asked to

see copies of this “research” on a couple of occasions yet you have failed to respond (see

Appendix G).

56. The other unhelpful narrative which is often promulgated by thinktanks, employers, and the

Review, is that the “gig economy” is currently predominantly unregulated and as such the debate

around regulation should start from scratch38. A classic example of this is the Resolution

Foundation’s recent launch of a proposal to provide minimum wage for certain for self-employed

people in order to set “a legal wage floor for the gig economy”39 (self-employed “workers” in the

so-called “gig economy” are already covered by minimum wage legislation). The problem with

this approach is obvious: it totally ignores the fact that employers in this sector are openly flouting

the law with no consequence. The Review’s buy-in to this narrative has been seen throughout

the consultation period, for example with calls to extend employment rights to the self-

employed40 (as if this was new)41. Similarly, the surveys the Review had Uber conducting for it

asked drivers what they thought their employment status was42, a matter already settled by the

Employment Tribunal.

Conclusion

57. In sum, your panel members were biased and/or unethically conflicted, your panel had no worker

or trade union representation, you refused to meet with the IWGB despite our direct stake and

experience in the issue at hand, you incorrectly portrayed the current law, and you often ran the

employers’ preferred narratives. So with all of that in mind, let’s take a look at the Review’s

recommendations.

38 For more on which, see https://www.theguardian.com/commentisfree/2017/jul/05/gig-economy-workers-payslips-holiday-pay-law-metcalf-review. 39 See the press release http://www.resolutionfoundation.org/publications/the-minimum-required-minimum-wages-and-the-self-employed/ and the panel discussion in which our General Secretary participated: https://www.youtube.com/watch?v=JwjHJiHTYDg#t=27m32s. 40https://www.theguardian.com/uk-news/2017/mar/20/pm-backs-plans-to-overhaul-workers-rights-to-reflect-employment-practices 41 For our response: https://www.theguardian.com/commentisfree/2017/mar/22/rights-gig-economy-self-employed-worker 42 http://www.uphd.org/press-release-is-uber-gaming-the-matthew-taylor-review/

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THE REPORT

58. At 115 pages, there is quite a lot to look at. Below we shall make some general comments about

style, narrative, and the law, and then proceed to comment on those recommendations which

will or are intended to affect our members. Where recommendations concern an area which for

the most part does not affect (or has not historically affected) IWGB members, we shall leave the

commenting to those who are more qualified to do so. This category includes proposals on:

a. Agency Workers;

b. Enforcement of tribunal awards;

c. Independent contractors;

d. The “hidden economy”;

e. Apprenticeships;

f. Internships.

Style over Substance

59. The first and obvious comment on the Report is just how little of it contains any substance. For

someone who responds to media criticism with an instruction to “please focus on substance”43,

your report is incredibly heavy of vacuous fluff and light on substantive proposals. Any advantage

acquired by writing in non-technical terms for a lay audience was subsequently lost by the

tortuously laborious nature of having to read so many words used to say so little.

60. Examples of this include:

a. From the Forward44, the report:

…issues a call for us as a country to sign up to the ambition of all work

being good work. From time to time people have asked me what as Chair

of the Review I would see as success. While I would be proud to see our

recommendations enacted and our strategic proposals fully debated,

more than anything I hope this Review will come to be seen to have won

the argument that good work for all should be a national priority.

43 Quote from Twitter exchange between Matthew Taylor and Guardian columnist Aditya Chakrabortty, see Appendix H. 44 Page 5

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b. From Chapter 245:

But we also think now is the time to organize our national framework

around an explicit commitment to good work for all. As we have talked

to people about good work – employees, employers, academics,

advocacy organisations and interested citizens from all walks of life – we

have been impressed by their enthusiasm for this ambition.

61. Similarly, some of the recommendations are so wishy-washy, it would be entirely feasible for

Government to “implement” them without any discernible impact on workers, and certainly

without any concrete improvement in workers’ lives. Given that Theresa May seems intent on

using the Review to claim the pro-worker mantle for the Tories, providing her with a number of

policies she could find a way of implementing with little cost to Government, little burden on

employers, and no tangible impact on workers would help the Tory narrative and do nothing to

serve the supposed aim of this report. It is important to note, however, that some of these

proposals could also be feasibly implemented in a way which does have a positive impact. We do

not therefore necessarily disagree with them. There just isn’t enough substance or detail for us

to really venture much of an opinion either way. In this category we would include the following

recommendations from the report:

a. From Chapter 746 a classic example:

Government should work with Investors in People, Acas, Trade Unions

and others with extensive expertise in this area to promote further the

development of better employee engagement and workforce relations,

especially in sectors with significant levels of casual employment.

b. This one is also a bit rich coming from you considering you purposely blanked the union

with arguably the most expertise in the main area of your review.

c. Similarly, from Chapter 1147:

Learning from the failings of Individual Learning Accounts the

Government should explore a new approach to learning accounts,

perhaps with an initial focus on those with a long working record, but

who need to retrain and those in receipt of Universal Credit. The new

£40 million Lifelong Learning Fund is a starting point for this and should

45 Page 7 46 Page 53 47 Page 87

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be developed by bringing together employers, civic society and the

education sector.

And48:

Government should use its convening power to bring together

employers and the education sector to develop a consistent strategic

approach to employability and lifelong learning. This should cover

formal vocational training, ‘on the job’ learning and development,

lifelong learning and informal learning outside work. It could be linked

to the longer-term development of life-time digital individual learning

records. As part of this, the Government should seek to develop a

unified framework of employability skills and encourage stakeholders

to use this framework.

And49:

Government should strongly encourage gig platforms to enable

individuals to be able to carry their verified approval ratings with them

when they move from the platform and to share them with third

parties.

And50:

In developing a national careers strategy, the Government should pay

particular attention to how those in low paid and atypical work are

supported to progress. It should take a well-rounded approach,

promoting the role of high-quality work experience and encounters at

different education stages.

d. From Chapter 1251:

As part of the statutory evaluation of the Right to Request Flexible

Working in 2019, Government should consider how further to promote

genuine flexibility in the workplace. For example it should consider

whether temporary changes to contracts might be allowed, to

accommodate flexibility needed for a particular caring requirement.

Government should work closely with organisations like Timewise and

48 Page 87 49 Page 87 50 Page 91 51 Page 95

25

Working Families to encourage flexible working and initiatives like

“happy to talk flexible working” to a wider range of employers.

And52:

Government should review and, in any event, consolidate in one place

guidance on the legislation which protects those who are pregnant or

on maternity leave to bring clarity to both employers and employees.

In parallel with the range of non-legislative options and the

consolidation set out above, the Government should consider further

options for legislative intervention. If improvements around leadership,

information and advice do not drive the culture change we are seeking,

the Government will need to move quickly to more directive measures

to prevent pregnancy and maternity discrimination.

And53:

We recommend that the relevant Government Departments – BEIS,

DCLG, DWP and DH – explore ways of supporting and incentivising local

authorities, particularly City Regions and combined authorities, to

develop integrated approaches to improving health and wellbeing at

work.

And54:

Government should seek to develop a better understanding of what

progression at work is and public policy levers influence it. Building on

the trials to date, Government should work with external providers to

determine what really works in supporting individuals to obtain better

quality – and not just more – work. This should not be limited to

increasing earnings to a level of self-sufficiency in Universal Credit and

should take particular account of the effect of increases in the National

Living Wage. It should reflect the opportunities offered by atypical and

gig working.

e. From Chapter 1355:

52 Page 97 53 Page 98 54 Page 100 55 Page 103

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The Government must place equal importance on the quality of work

as it does on the quantity by making the Secretary of State for Business,

Energy and Industrial Strategy responsible for the quality of work in the

British economy.

And56:

The Government should identify a set of metrics against which it will

measure success in improving work, reporting annually on the quality

of work on offer in the UK.

And57:

The Department for Business, Energy and Industrial Strategy should

take the lead for Government in identifying emerging issues and be the

custodian for ensuring market conditions allow for the creation of

quality work.

And58:

The emphasis in industrial strategy and sector deals on technology and

innovation should be linked to the importance of human factors in

driving productivity and enabling more rewarding working lives.

And59:

The LPC should have its remit widened so that it can both make

recommendations to Government on what needs to change (including

NMW rates) to improve quality of work in the UK as well as work with

employers, employees and stakeholders to promote quality work

across all regions and sectors.

And60

The LPC should work with experts, from the new Director of Labour

Market Enforcement to the Chartered Institute of Personnel and

Development, as well as business groups and trade unions and make

56 Page 103 57 Page 105 58 Page 106 59 Page 107 60 Page 107

27

recommendations to Government if changes to the legal framework are

needed to ensure fair and decent work is delivered.

And61:

The LPC should work with employers and worker representatives to

ensure sector-specific codes of practice and guidance are developed

that support the provision of quality work.

This proposal is again ironic given that no union focuses a higher proportion of its

organizing and legal work around the so-called “gig economy” than the IWGB yet you did

not meet with us. Undoubtedly you would claim to have done extensive consultation for

your report with “workers” and their reps which just goes to show that this proposal could

be “implemented” whilst leaving very much to desire.

And62:

The LPC should promote what works in sectors and encourage greater

collaboration to improve quality work in low-paying areas.

62. In total the Review makes over 50 recommendations. Given that one of the Review’s central

themes is to encourage focus on quality and not just quantity, it would probably would have been

wise for the Review to follow its own advice.

The Narrative

63. Our concerns about pro-employer bias are reinforced by comments in your Forward63:

…Greg Marsh, Diane Nicol and Paul Broadbent have not only been an important

source of ideas and wisdom throughout the process but have led in engaging with

key groups of stakeholders; respectively, entrepreneurs and business, the legal

profession and enforcement agencies.

No doubt all in that list are key stakeholders. But we would also expect you to consider unions

and workers “key stakeholders” as well, and for reasons explained above you certainly could not

be considered to have been leading engagement on that front.

61 Page 108 62 Page 109 63 Page 5

28

64. The review, similar to “gig economy” employers, is big on emphasizing how much workers in the

sector enjoy their flexibility. We do not deny that many workers do indeed enjoy the flexibility.

However, for survey results to be properly interpreted it would have been helpful if more

information had been provided on them. For example, in Chapter 3 the Review says64:

In a survey the Review conducted of 1,149 people working through platforms and

other similar companies 73.1% said they were satisfied with their ability to be

their own boss.

…

…in our survey of people working through platforms and other similar companies,

75% said they were satisfied with their ability to set their own hours with 68%

satisfied with their work life balance.

We have already requested information from you on this survey elsewhere (see Appendix G) and

now take the opportunity to do so one more time. Among other things we would like to know

what questions were asked, how the questions were framed, how were respondents selected,

and whether the questions accurately portrayed employment law. Also, who administered the

survey?

65. We will largely refrain from commenting on the endless reams of pages which contain no concrete

policy proposals on how to improve the lot of workers. This includes most of the first four

chapters. However this is not to say we agree with the generally rosy picture the Review has

painted of the British labour market, or the supposed endless virtues of British labour market

flexibility as compared to other countries.

The Law

66. Given that one of the three “challenges” which the Review’s recommendations seek to address is

“Increasing clarity in the law and helping people know and exercise their rights”65, the amount of

legal inaccuracy and muddled portrayal of the law contained in the report is surprising.

67. The main and major legal error made is to fail to recognise, as was done throughout the

consultation, that a “worker” is a sub-category of self-employment. For example, in the “seven

64 Page 14 65 Page 8

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steps towards fair and decent work”66, step two says “…we should be clearer about how to

distinguish workers from those who are legitimately self-employed”. Similarly, and ironically, the

introductory page to “Chapter 5: Clarity in the law”67, states:

The way in which employment protections are applied relies on individuals and

employers understanding the type of relationship that exists between them –

most basically, deciding whether the individual is an ‘employee’, a ‘worker’ or

genuinely self-employed. For a number of reasons, this is becoming more

complex for an increasing proportion of the workforce. In this section, we

examine what works and what does not in the current framework, making a range

of recommendations to improve clarity and transparency for individuals and

employers. In doing so, we have come to a number of conclusions:

…

The focus should be clarifying the line between ‘worker’ status and self-

employment as this is where there is greatest risk of vulnerability and

exploitation;

…

This error is repeated throughout the report and it would serve no purpose for us to reference

every instance of this. To the extent that the Review merely wanted to interchangeably use

“legitimately self-employed”, “genuinely self-employed” and simply “self-employed” as short-

hands for those non-limb b worker self-employed people who are in business on their own

account, then this should have been made explicitly clear. Using “self-employed” would also be

a particularly unhelpful short-hand for this category given the explicit language of Lady Hale in

Bates that workers are a type of self-employed and given the extent to which the term is used in

common parlance.

68. However, given the Review’s use of the term throughout the report, it does not appear that the

term “self-employment” is used merely as a short-hand, but rather it seems to be used to denote

an entirely distinct category to which a limb b worker does not pertain. For example, in Chapter

9, which covers tax, in the discussion on equalizing the tax and NICs burden on different types of

labour the Review says68:

It is also important to recognise that the difference in NI contributions paid by the

self-employed and employed individual is relatively small in comparison with the

fact that employers pay 13.8% NI contributions on the labour of employees and

66 Page 9 67 Page 32 68 Page 72

30

workers (earning above the NI secondary threshold), whilst the engagers of self-

employed labour do not make any NI contributions on behalf of those they hire.

69. However, that is incorrect. With the exception of cases with specific industry carve-outs,

employers do not make NI contributions on behalf of workers. They do so just on behalf of

employees. This is because worker is a sub-set of self-employment. To the extent that the Review

wants to discuss tax equalization in the so-called “gig economy”, this is a pretty important point.

The Recommendations

70. In Chapter 5 the Review recommends69:

Government should replace the minimalistic approach to legislation with a

clearer outline of the tests for employment status, setting out the key principles

in primary legislation, and using secondary legislation and guidance to provide

more detail.

71. We believe there is not much harm in providing further detail in statutory definitions of different

employment statuses in order to reflect the case law, as long as Government doesn’t cynically use

the exercise to raise the threshold of qualifying for worker status. However, we do not believe it

will have the intended effect. The employment status problem in the so-called “gig economy” is

not caused by confusion and as such will not be solved by clarity. Whatever definitions are laid

down in primary legislation, the employers will still use their lawyers to draft contracts which seek

to create the appearance of working relationships which fall outside of these definitions. Given

that these tribunal cases often boil down to the judge determining, on the basis of the facts, what

the actual working relationship is, replicating key principles from the case law in statutory

definitions will not take us much further.

72. The idea of increasing the ability of Government to modify employment status definitions through

secondary legislation is a terrible one. Contrary to the favourite “gig economy” employer line that

employment law is an archaic beast so ill-suited for the modern world (seen above), the courts

and tribunals have shown that the “worker” definition has done a pretty good job keeping up with

the so-called “gig economy”. The most likely use by a Tory Government of a newly acquired power

to modify employment status definitions via secondary legislation- by definition not subject to

parliamentary approval- would be to mitigate the impact of any court or tribunal decisions on

business. This is precisely what they did when they capped at two years the amount of unpaid

holidays workers could claim in response to Employment Appeal Tribunal decisions to the effect

that Article 7 of the Working Time Directive meant workers should be entitled to be compensated

holiday pay equivalent to what they actually earn whilst working rather than equivalent to their

69 Page 35

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contractual pay70. In the same way that the Review has sought to lessen the impact of minimum

wage requirements on “gig economy” employers and of statutory sick pay on regular employers

(more on which below), one can only imagine what a Tory government would do if left

unconstrained to meddle with employment status.

73. Chapter 5 also proposes71:

Government should retain the current three-tier approach to employment

status as it remains relevant in the modern labour market, but rename as

‘dependent contractors’ the category of people who are eligible for worker

rights but who are not employees.

74. We agree that there should be a three-tiered approach to employment status in recognition of

the fact that (limb b) workers are self-employed, do their own taxes, tend to have more autonomy

and flexibility than employees, yet are entitled to employment rights because they carry out their

work as part of someone else’s business. Where we disagree is that the third category should be

entitled to fewer employment rights than employees. We cannot see any justification for this.

75. So far as renaming limb b workers “dependent contractors” we are largely agnostic. It is pretty

widely accepted that although technically an employee is a “limb a” worker, the term “worker” is

used as a short-hand for “limb b worker” (as explained above). So the rationale for the renaming

exercise doesn’t make a lot of sense to us. Although given that much of the news coverage of the

release of the report lead with the announcement that the Review was calling for a new category

to cover “gig economy” workers, we do wonder whether part of the real rationale is the belief

that the proposal would feature prominently in news coverage, appear to be a big new

development, whilst in actuality being little more than a relabeling exercise with little implication

for business.

76. Chapter 5 recommends72:

In developing the test for the new ‘dependent contractor’ status, control should

be of greater importance, with less emphasis placed on the requirement to

perform work personally.

77. Placing less emphasis on the requirement to work personally would be welcome. Indeed the way

the personal service requirement has been interpreted has often led employers in the so-called

70 http://www.legislation.gov.uk/uksi/2014/3322/pdfs/uksi_20143322_en.pdf 71 Page 35 72 Page 36

32

“gig economy” to focus on a purported right of substitution as their main line of defense, our case

against Deliveroo being a prime example73. In practice we think whilst definitely welcome,

lessening the personal service requirement will not be a huge game changer as if someone

genuinely does have a right of unlimited substitution where they can decide never to personally

show up for the work they are contracted to do, that they are very likely to be an independent

contractor in business on their own account with the other party being a client or customer. Also,

a lesser emphasis on personal service requirements wouldn’t have made much difference to any

of the recent gig economy tribunal and court cases which have been won by workers: to the extent

that the employer claimed a right of substitution existed, the workers demonstrated such a right

was bogus.

78. We are against shifting the focus of determining worker status away from the current multi-

factorial test and towards a focus on control. Control should undoubtedly be one of the issues

looked at, but so should the question of whether the putative worker is integrated into the

operations of the putative employer, whether the putative worker markets his/her services to the

world in general or rather just to the putative employer, etc. The fundamental question that

courts and tribunals should continue to ask when distinguishing between independent

contractors and workers is: is the individual carrying out a business undertaking or profession on

his/her own account of which the other party is client or customer, or is he/she carrying out their

work as part of someone else’s business. This casts a wider net than a test which places greater

emphasis on control. This can be seen in part in Lady Hale’s judgment in Bates, in the context of

a partner in a law firm claiming to be a worker under the Employment Rights Act 1996:

38. Maurice Kay LJ pointed out (at para 18) that neither the Cotswold

“integration” test nor the Redcats “dominant purpose” test purported to lay

down a test of general application. In his view they were wise “not to lay down a

more prescriptive approach which would gloss the words of the statute”. Judge

Peter Clark in the EAT had taken the view that Dr Westwood was a limb (b) worker

because he had agreed to provide his services as a hair restoration surgeon

exclusively to HMG, he did not offer that service to the world in general, and he

was recruited by HMG to work as an integral part of its operations. That was the

right approach. The fact that Dr Westwood was in business on his own account

was not conclusive because the definition also required that the other party to

the contract was not his client or customer and HMG was neither. Maurice Kay LJ

concluded, at para 19, by declining the suggestion that the Court might give some

guidance as to a more uniform approach: “I do not consider that there is a single

key with which to unlock the words of the statute in every case. On the other

hand, I agree with Langstaff J that his “integration” test will often be appropriate

73 For example, see https://www.thesun.co.uk/news/3669915/deliveroo-loophole-substitute-riders-security-food-safety-checks/

33

as it is here”. For what it is worth, the Supreme Court refused permission to

appeal in that case.

39. I agree with Maurice Kay LJ that there is “not a single key to unlock the words

of the statute in every case”. There can be no substitute for applying the words

of the statute to the facts of the individual case. There will be cases where that is

not easy to do. But in my view they are not solved by adding some mystery

ingredient of “subordination”74 to the concept of employee and worker. The

experienced employment judges who have considered this problem have all

recognised that there is no magic test other than the words of the statute

themselves. As Elias J recognised in Redcats, a small business may be genuinely

an independent business but be completely dependent upon and subordinate to

the demands of a key customer (the position of those small factories making

goods exclusively for the “St Michael” brand in the past comes to mind). Equally,

as Maurice Kay LJ recognised in Westwood, one may be a professional person

with a high degree of autonomy as to how the work is performed and more than

one string to one’s bow, and still be so closely integrated into the other party’s

operation as to fall within the definition. As the case of the controlling

shareholder in a company who is also employed as chief executive shows, one

can effectively be one’s own boss and still be a “worker”. While subordination

may sometimes be an aid to distinguishing workers from other self-employed

people, it is not a freestanding and universal characteristic of being a worker.

40. It is accepted that the appellant falls within the express words of section

230(3)(b). Judge Peter Clark held that she was a worker for essentially the same

reasons that he held Dr Westwood to be a worker, that she could not market her

services as a solicitor to anyone other than the LLP and was an integral part of

their business. They were in no sense her client or customer. I agree.

79. The problem with too much emphasis on one individual factor is that the putative employer

focuses all their energies on disguising the true nature of that factor, and other nuances of the

working relationship between putative worker and putative employer are disregarded. Already,

“gig economy” employers go to great lengths to disguise or minimize the nature of control, e.g.

insisting they do not determine the route that a courier takes. Of even greater concern about the

proposal to focus on control is the fact that the Review seems to think a lack of control is a defining

feature of “gig economy” work. In Chapter 4, in describing the benefits of “gig working” the

74 These passages refer to “subordination” rather than control. We understand the term “subordination”, at least as an EU law concept, to be wider than that of “control” which makes our point all the more poignant.

34

Review mentions “The benefits to an individual choosing to work in this way include flexibility and

control over how they work…”75

80. Chapter 5 recommends76:

In re-defining ‘dependent contractor’ status, Government should adapt the

piece rates legislation to ensure those working in the gig economy are still able

to enjoy maximum flexibility whilst also being able to earn the NMW.

81. No, it shouldn’t. The reasoning for coming to this recommendation is utterly flawed for the

following reasons:

a. The Review says77:

Platforms do not place limits on when individuals can log onto the app

but no individual should be expecting to be paid for all the time that he

or she has the app open (regardless of whether or not they are seeking

work). For instance, it would clearly be unreasonable if someone could

log onto an app when they know there is no work and expect to be paid.

b. Firstly, using the term “platform” is highly misleading. Deliveroo is not a “platform”, it is

a food delivery business which uses an app to give information to the people working for

it. Uber is not a “platform”, it is a transportation services company which uses an app to

communicate with people working for it and to communicate with customers. E-Bay is a

platform.

c. It is untrue to say that “gig economy” employers- what we can only assume the Review

means by using the term “platforms”- do not generally place limits on logging in and out.

This is true for Uber and for some parts of Deliveroo. However, most Deliveroo riders in

London for example need to schedule shifts in advance. Similarly, most same day delivery

couriers are expected to work a regular pattern and schedule any days off in advance.

d. We agree that it would be unreasonable for someone to get paid merely for switching on

an app without any intention of working. We have never called for this, nor have we ever

seen any worker call for this, nor are we aware of any judgment which said this

entitlement should exist. The point is that in some cases, “working” means having the

app on and being ready, willing, and able to accept jobs. This was decided to be the case

75 Page 28 76 Page 37 77 Page 37

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in Uber, CitySprint, and Excel. It would clearly be the case for Deliveroo riders who work

set shifts and get paid in part on an hourly basis.

e. The Review also states78: “Platforms present individuals with greater freedom over when

to work, and what jobs to accept or decline, than most other business models.” Again,

this is not strictly true. Some “gig economy” employers certainly do, others do not.

Deliveroo for example didn’t even have a “reject” button to enable drivers to refuse jobs

sent until they introduced it just recently, most likely in an effort to defeat our litigation

against them. Similarly, same day delivery couriers are usually expected to do the jobs

sent to them unless they have a very good reason for refusal, e.g. the item is too big or

doesn’t fit in their bag.

f. In explaining the proposal the Review says79:

Building on the existing framework, platforms would be able to

compensate workers based on their output (i.e. number of tasks

performed), provided they are able to demonstrate through the data that

they have available that an average individual, working averagely hard,

successfully clears the National Minimum Wage with a 20% margin of

error.

g. This would put an incredible amount of power in the hands of the employers. Who is

going to verify their statistics? Indeed, these companies routinely claim that their workers

(or “sub-contracted independent contractors” to use their bogus terminology) earn well

above 120% of the minimum wage as is80 and as such this proposal would represent 0

change. We don’t accept these claims and indeed many of our members do not make the

“averages” claimed by the companies. Additionally, how are times of low demand to be

determined? When supply of labour exceeds demand of customers? Or when customer

demand hits a certain absolute level? We are not dealing with an open market place.

h. This proposal is also a dream come true for the employers who want to have all the

benefits of a large workforce in order to always quickly satisfy customer demand, yet do

not want to have to bear any of the costs. Contrary to the Review’s patronizing assertion

that “if an individual knowingly chooses to work through a platform at times of low

demand, then he or she should take some responsibility for this decision”, these

companies’ models depend on workers working at times of low demand. If Deliveroo was

only open at lunchtimes and dinner times then they would take a major hit on sales as

people couldn’t order a mid-afternoon snack or a late breakfast. As Deliveroo’s twitter

78 Page 37 79 Page 38 80 For example, see http://www.cityam.com/268234/taylor-review-uber-deliveroo-business-groups-law-experts.

36

profile says: “Bringing the best food to your door or desk in 30 minutes”81. It doesn’t say

“Bringing the best food to your door or desk in 30 minutes if you order during meal time

and not at all if you don’t”. Similarly, Uber’s website82 says

Anywhere, anytime

Daily commute. Errand across town. Early morning flight. Late night drinks. Wherever you’re headed, count on Uber for a ride—no reservations required.

Uber wants there to be five drivers circling the block, desperate for a fare, who can pick

up a passenger within 5 minutes of them booking a ride.

i. In addition to the companies depending on people working during times of low customer

demand, some of the workers depend on this ability as well. In all of the Review’s

extensive extolment of the virtues of flexible working, for example allowing a woman to

work around childcare commitments, did the Review not consider what would happen to

that woman under these proposals? What if because of childcare commitments that

woman could only work at non-peak times when she couldn’t earn the minimum wage

on the basis of current piece rates (even if an average worker working averagely hard,

based on an average of all of the employer’s data, broke 120% of minimum wage due to

higher earnings at busier times)? Should she not be entitled to at least a floor of the

minimum wage despite the fact that her employer’s business model depends on people

like her working those hours?

j. Luckily for the “gig economy” workers who would be made poorer by your proposal, even

the Tories thought it went too far. This can be seen in an exchange between Frank Field

MP and Business Minister Margot James MP in an exchange in Parliament on 11 July,

2017:

Frank Field MP: If the news reports are right, Matthew Taylor goes for flexibility

rather than always implementing the national minimum wage. Can we have an

undertaking from the government that they will always abide by the national

minimum wage even if there’s a loss of flexibility?

Minister Margot James MP: I congratulate, um, the honourable gentleman for all

the work he did chairing the Work and Pensions select committee on these

matters in the last parliament. Um, and I, I can assure him that, um, minimum

wage rates, um, are absolutely sacrosanct- there will be no trade off.

81 https://twitter.com/Deliveroo 82 https://www.uber.com/en-GB/

37

82. In sum, this proposal should be rejected as it would strip the right to minimum wage out of the

hands of many workers in the so-called “gig economy”. Workers are not gaming the system and

there is no risk that companies will be unfairly taken advantage of. Contrary to your repeated

public assertions, prescribed shifts is not the only alternative to the Review’s proposal. If

companies raised pay overall then workers would comfortably clear minimum wage even at times

of low demand and those who could would want to work at times of high demand to earn more

money. Similarly, if these companies are worried about taking on too many workers they should

look a little more carefully at managing the size of their workforce to match demand. If the

number of active workers struggles to keep up at a time of high demand then companies can pay

higher rates to get more people to turn up (as they often already do). In sum, to suggest that the

choice is strictly between this damaging proposal and shift work is preposterous. Any worker

working for a company in the so-called “gig economy” should never earn less than the minimum

wage for the time they work and to suggest otherwise is outrageous.

83. And thus the ultimate irony: the Review that takes 10 months to deliver a damp squib, largely

devoid of useful substance, has the audacity to comment on our members’ productivity.

84. Chapter 5 recommends83:

In developing the new ‘dependent contractor’ test, renewed effort should be

made to align the employment status framework with the tax status framework

to ensure that differences between the two systems are reduced to an absolute

minimum.

85. No, it shouldn’t, at least so far as concerns low-paid workers in the so-called “gig economy”. As

stated above, workers are a sub-category of self-employed, and as such benefit from a more

preferential tax regime. This is entirely justified given that they often have many more expenses

than employees. For example, an Uber driver pays the costs of his/her car, a Deliveroo rider that

of their bike, etc. Employees do not generally have to rent their desk or buy their own computer.

86. Finally, at page 39 of the report, we come to the first recommendation with which we can agree

in its entirety:

Government should build on and improve clarity, certainty and understanding

of all working people by extending the right to a written statement to

‘dependent contractors’ as well as employees.

87. This would undoubtedly be an improvement, though not a massive game-changer. Our

enthusiasm for the recommendation is somewhat tempered by the fact that we believe this is

already a requirement of EU law, with said law not having been transposed correctly into UK law.

This is on the basis that the EU right, enshrined in Council Directive 91/533/EEC, refers to

83 Page 38

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“employment relationship” and has little space for carve outs and exemptions. We have a test

case against CitySprint arguing this and may well win it before Parliament gives any consideration

to the report. However, to reiterate, workers having entitlement to statements of employment

particulars is a good thing. The further suggestion that statements should be given on day 1

(rather than within the first two months as it currently stands), is also a good thing. Introducing

a standalone right to claim for compensation if an employer fails to abide by the obligation is also

a good idea, though massively tempered by the Review’s refusal to recommend the elimination

of employment tribunal fees (more on which below).

88. Chapter 5 further recommends84:

Government should build on legislative changes to further improve clarity and

understanding by providing individuals and employers with access to an online

tool that determines employment status in the majority of cases.

89. We believe this is next to meaningless. Whatever factors are included in the algorithm, “gig

economy” companies will likely hire lawyers to try and get around. Again, a problem not caused

by confusion will not be solved by further clarity.

90. Chapter 6 recommends85:

The Government should ask the LPC to consider the design and impacts of the

introduction of a higher NMW rate for hours that are not guaranteed as part of

the contract.

91. This one has the potential to be an improvement, though the devil will be in the detail. It is

disappointing that after 10 months the Review was not able to specify this recommendation any

more than it has. As phrased the recommendation is also pretty weak and watered down. In the

case of employees- as opposed to workers- we believe 0 hours contracts should be banned due

to the massive power imbalances between employee and employer which all too often lead to

exploitation. However, in the absence of a ban a higher minimum wage would be better than

nothing.

92. Chapter 6 recommends86:

The Government should extend, from one week to one month, the

consideration of the relevant break in service for the calculation qualifying

period for continuous service and clarify the situations where cessations of

work could be justified.

84 Page 39 85 Page 44 86 Page 45

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93. This would be a slight improvement though probably not a game changer. In any case, impact on

the so-called “gig economy” would be minimal: it is rarely ever asserted that these people are

employees (as opposed to workers or independent contractors).

94. Chapter 6 recommends87:

Government should do more to promote awareness of holiday pay

entitlements, increasing the pay reference period to 52 weeks to take account

of seasonal variations and give dependent contractors the opportunity to

receive rolled-up holiday pay.

95. Promoting awareness of holiday rights wouldn’t be a bad thing and neither would increasing the

pay reference period. Neither proposal would be a game changer.

96. Allowing “rolled-up holiday pay” is a terrible idea. The point of holiday entitlement is to give

workers a break; a period during which they do not work. Indeed, the right was introduced under

EU law on health and safety grounds. To respond by saying that the worker would be allowed to

choose whether they want their holidays “rolled up” is nothing to the point. The inequality of

bargaining power tends to render “choices” such as these relatively meaningless.

97. In any case, this proposal would be complicated, to say the least, under EU law (which we are still

bound by), at least so far as concerns the four “EU weeks” of holiday entitlement88.

98. Chapter 6 recommends89:

Government should act to create a right to request a contract that guarantees

hours which better reflect the actual hours worked, for those on zero hour

contracts who have been in post for 12 months.

99. This suggestion is next to meaningless. What if the employer says no? Naming and shaming alone

will not solve the problem. Just by way of example, the University of London, an institution which

by the standards of the average employer is highly susceptible to reputation-based pressure, has

for years used contractors which hire 0 hours employees on a regular basis. We have publicized

this information over and over to no effect. The actual contractors care even less. If the Review

doesn’t want to recommend a ban on 0 hours contracts for employees, it should have at least

87 Page 47 88 Article 7 of the Directive of the European Parliament and of the Council (2003/88/EC), known colloquially as the Working Time Directive, states:

1. Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.

2. The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.

89 Page 48

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recommended a statutory right for these employees to obtain permanent contracts based on the

average hours they worked leading up to the time of the request.

100. Chapter 7 largely concerns workers’ voice in the workplace. It starts by correctly

recognizing the role unions can play in this90:

These are clearly related to questions around formal Trade Union representation,

including for the purposes of collective bargaining and we heard many positive

examples of the role trade unions can play in good employment relations.

However, this recognition of the role unions can play doesn’t seem to make it into the

recommendations in any meaningful way. Coming up with ways to increase the effectiveness of

unions in the workplace is easy, e.g. lower the support thresholds for union recognition, give

union officials access to workers during paid working time, increase the teeth on the collective

bargaining legislation, increase amount of mandatory facilities time for trade union reps, the

Institute of Employment Right’s proposal of re-introducing sectoral collective bargaining91, and

repeal the Trade Union Act 2016, just to name a few.

101. Instead, the Review recommends92:

Government should examine the effectiveness of the Information and

Consultation Regulations in improving employee engagement in the workplace.

In particular it should extend the Regulation to include employees and workers

and reduce the threshold for implementation from 10% to 2% of the workforce

making the request.

102. We are one of the few trade unions that has actually used the Information and

Consultation of Employees (ICE) Regulations 2004 as a deliberate and central part of our collective

organizing strategy. This was not by choice but rather because a loophole in the collective

bargaining laws prevented us from obtaining statutory trade union recognition in a couple

workplaces93. And from this experience we can tell you just how useless the ICE Regs are. In

90 Page 52 91 In particular on this front see John Hendy QC’s article: http://www.ier.org.uk/blog/where-workers-voice-taylors-review/ 92 Page 53 93 The loophole is paragraph 35 of Schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992 which blocks a trade union from obtaining statutory recognition if the employer already recognizes another trade union, regardless of membership levels. In the case where the recognized union has a certificate of independence and was recognized voluntarily there does not exist a de-recognition procedure by which a worker can compel de-recognition of that union. We are currently challenging this as a breach of Article 11 of the European Convention of Human Rights in the European Court of Human Rights.

41

addition to the percentage threshold required to trigger the Regs which the Review has identified,

the Regs suffer from the following problems:

a. When given the choice by the EU to apply the Regs to “undertakings” or “establishments”,

the UK chose undertakings. This means that rather than having the ability to be based at

the workplace level, as the collective bargaining laws allow for, the ICE Regs occur at the

company-wide level. Even if one lowered the number of workers required to trigger an

ICE request, there are other number thresholds which come up in the Regs which would

make company-wide organizing challenging without significant reform. For example,

once “negotiating reps” have been elected, if an ICE agreement is not approved by all of

them then the deal is put to a ballot of the entire workforce94. For a group of workers to

try and campaign in favour or against an ICE agreement when the voting population is in

the thousands and spread across the entire country, is a tall order.

b. The ICE Regs do not naturally facilitate workers being represented by trade union officials

in negotiations. Having a seat at the table with the bosses is good, but often people want

the backing of an official whose job it is to know the relevant employment law and who

has experience negotiating and advocating on workers’ behalf.

c. The ICE Regs take forever to implement, a problem made all the more acute by the high

turnover which characterizes work in the so-called “gig economy”. Just to give you an

example, we made a valid employee request under ICE at the University of London in

December, 2014 and over two and a half years later the ICE agreement is still not in place.

Granted this particular process was made slower by the UoL stitching up the elections

(later found to be unlawful in tribunal), but the main point remains: each step of the Regs

can take a very long time.

d. The Regs do not mandate collective bargaining. If a group of workers overcomes all of

the considerable hurdles set out in this legislation and obtains an ICE agreement with an

employer, the employer at a bare minimum needs to inform them and consult them on

key issues95. However there is no link between this consultation and any action by

workers if views are not taken on board. In our experience, employers rarely take on

suggestions by workers which weaken their bottom line without the threat of action.

103. So by all means, make the ICE Regs more accessible, and apply them to workers and not

just employees, but it will still not change much. And they are no substitute for better collective

bargaining arrangements. There is no doubt that the current workplace collective bargaining

regime could be improved, in particular with the so-called “gig economy” in mind. By way of

example, in our bid for trade union recognition on behalf of Deliveroo riders in Camden and

Kentish Town:

94 See Regulation 16(4) 95 See Regulation 20

42

a. Deliveroo was not straight about the number of riders in our proposed “bargaining unit”-

it came out in cross-examination in the Central Arbitration Committee (CAC) that

Deliveroo’s numbers had included riders who might not have performed a single delivery

in the previous six months.

b. We were not given access to the workers- we had to stand outside waiting around to

speak to people when they were in between jobs and just guessing when they were most

likely to show up- rather than being facilitated in communicating with riders.

c. Deliveroo ran a campaign of misinformation- calling riders in Camden and Kentish Town

and threatening them with taking away their flexibility, forcing them to wear uniforms,

and other unattractive propositions if the IWGB won its case (ironically much along the

lines of the Review’s explanation for its minimum wage proposal). Deliveroo also told

riders they would lose their self-employed status if we won our case (which was not true

as workers are a sub-category of self-employed, but yet again similar to the errors in the

Review’s report about worker and self-employed being mutually exclusive).

d. Deliveroo took advantage of the fact that the CAC needs to look at the situation at the

time of the hearing rather than at the time the application was submitted, and issued

entirely new contracts to riders (obviously to try and defeat our claim) just weeks before

the hearing.

e. Deliveroo claims to have eliminated “opps codes”, the method by which riders are

assigned to different zone, e.g. Camden and Kentish Town, just weeks before our hearing

as well, in an obvious attempt to defeat our claim (by saying our bargaining unit was no

longer viable).

f. Deliveroo rocked up to the hearing with no fewer than eight lawyers.

The above gives you a flavour of what we are up against. If the Review wants to focus on giving

workers more voice, it should have a think about how to make it easier for unions to gain access

to workers and enter into collective bargaining agreements, and how to make it harder for

companies to game the system.

104. In addition to improving workplace level collective bargaining the Review should have

also considered sectoral collective bargaining so that we don’t have to repeat the same individual

struggles at each workplace or company over some issues which pertain to an industry as a whole.

As John Hendy QC wrote96 in response to the report:

The Taylor Review refers to 'sectoral strategies engaging employers, employees

and stakeholders to ensure that people – particularly in low-paid sectors – are

not stuck at the living wage minimum or facing insecurity but can progress in their

current and future work' but stops short of recommending the essential feature

of negotiations between unions and employers. Without this element, workers

96 http://www.ier.org.uk/blog/where-workers-voice-taylors-review

43

are simply excluded from the process of determining the terms and conditions on

which they work. This is one of the problems with the minimum wage and the

Pay Review Boards: in both cases the outcome is determined by someone else.

Beyond restoring democracy to the workplace, sectoral collective bargaining has

many benefits: delivering social justice and greater equality at work, raising

wages and hence lifting people out of poverty, saving on the payment of benefits

to subsidise low wages and increasing the tax take as wages rise, increasing

demand in the economy, and compliance with the UK’s international legal

obligations. Sectoral standards negotiated by employers and unions would also

prevent good employers being undermined and undercut by bad employers,

thereby halting the downward spiral into ever more extreme practices of

exploitation.

105. Chapter 7 recommends97:

Government should introduce new duties on employers to report (and to bring

to the attention of the workforce) certain information on workforce structure.

The Government should require companies beyond a certain size to:

• Make public their model of employment and use of agency services beyond a

certain threshold.

• Report on how many requests they have received (and number agreed to)

from zero hours contracts workers for fixed hours after a certain period.

• Report on how many requests they have received (and number agreed) from

agency workers for permanent positions with a hirer after a certain period.

106. Yes- by all means introduce these requirements. But, for the reasons already given above

on the right to request permanent hours, it would be delusional to think that these reporting

requirements are going to lead to a major change in behaviour of the worst employers.

107. Chapter 8 recommends98:

HMRC should take responsibility for enforcing the basic set of core pay rights

that apply to all workers – NMW, sick pay and holiday pay for the lowest paid

workers.

97 Page 55 98 Page 59

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108. Increasing Government enforcement is spot on and something we have been calling for

repeatedly. As seen in the introductory section to this letter, given how pervasive is the unlawful

deprivation of employment rights in the so-called “gig economy”, enforcement should have been

the Review’s primary focus. It is unreal that in a 115 page report, proposals on increased

government enforcement which would directly affect workers in the so-called “gig economy”

occupy less than half a page and are almost entirely devoid of any substance. Increasing the

number of employment rights that government enforces is right, however it was incumbent upon

the Review to detail how exactly this was going to be done. Given HMRC’s abject failure in

enforcing minimum wage99, it was even more necessary to explain how HMRC’s enforcement of

holidays might be more effective. The absence of substance is all the more egregious given that

the Review has had over 10 months to come up with something.

109. Not only has the Review given no detail whatsoever on how HMRC might effectively go

about enforcing holidays, it seems it gave no consideration whatsoever to other potentially more

effective methods of government enforcement, such as the Institute of Employment Rights’

proposal for a Ministry of Labour with a labour inspectorate100 (also adopted in the Labour Party

manifesto).

110. Chapter 8 recommends101:

Government should ensure individuals are able to get an authoritative

determination of their employment status without paying any fee and at an

expedited preliminary hearing.

99 See Corporate Watch on the miniscule amounts HMRC spends on minimum wage enforcement, the tiny number of actions taken by HMRC, and the negligible number of criminal prosecutions: https://corporatewatch.org/news/2016/apr/01/nine-times-more-spent-pursuing-claimants-employers-not-paying-minimum-wage. See from the National Audit Office: https://www.nao.org.uk/wp-content/uploads/2016/05/Ensuring-employers-comply-with-National-Minimum-Wage-regulations-Summary.pdf. See for an example of Argos being fined less than £25 per person for failure to pay minimum wage: https://www.theguardian.com/business/2017/feb/16/argos-fined-paying-below-minimum-wage. On HMRC prosecuting just 3 out of 700 employers for minimum wage violation in two and a half years: https://www.theguardian.com/society/2016/sep/28/only-three-out-of-700-firms-prosecuted-for-paying-below-minimum-wage. On the incredible delays with which HMRC resolves minimum wage cases: http://news.sky.com/story/taxman-tackled-on-rising-minimum-wage-arrears-10277282. Also, anecdotally, the IWGB has been representing low paid workers, including many earning at or near minimum wage, for nearly five years, and we have never, not once, come across a case resolved by HMRC. Also, given that cleaners are constantly seeking to join the union, in large part to get help recovering wage deductions which would amount to minimum wage breaches, HMRC’s enforcement regime clearly hasn’t had the intended deterrence effect. 100 http://www.ier.org.uk/manifesto 101 Page 62

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111. This would of course be an improvement from the current situation where a worker has

to pay just to have a tribunal confirm his/her employer has been bogusly classing them as an

independent contractor. However, the suggestion is not a huge improvement. Rights are

meaningless without enforcement. No one wants to be recognized as a worker for the simple

sake of having a piece of paper saying they are a worker. They want to be recognized as workers

because of the substantive rights- holidays, minimum wage, protection from discrimination, etc.-

that come with the status. And if to enforce those rights they are still deterred by massive fees

then we haven’t taken things much further.

112. Given that even the Government accepts that the fee regime has caused the dramatic

decline in tribunal cases102, combined with the fact that even under the proposals Government

would still not enforce the overwhelming majority of employment law, it is ludicrous that a review

tasked with ensuring employment rights does not recommend eliminating tribunal fees in their

entirety. The Review’s mealy-mouthed expression of “regret” that Government is unlikely to

“move to abolish these higher fees” and its request that “Government continues to keep the level

of the fees under review” just doesn’t cut it. Tribunal fees are a central cause of the problem and

as such pushing for their elimination should have been one of the main focuses of the

recommendations.

113. Chapter 8 recommends103:

The burden of proof in employment tribunal hearings where status is in dispute

should be reversed so that the employer has to prove that the individual is not

entitled to the relevant employment rights, not the other way round subject to

certain safeguards to discourage vexatious claims.

114. Whilst this one may sound good to a lay audience, in practice it would be essentially

meaningless. Employment status cases rarely turn on the burden of proof. Especially in cases in

the so-called “gig economy”, they are usually a dispute as to whether the putative worker is truly

in business on his/her own account with the other party as client or customer, or whether they

are carrying out their work as part of the “gig economy” company’s business. The written contract

will of course say the individual is truly independent and in business on their own account, the

102 At para 13(b) of the Government’s response to Unison’s appeal in the Supreme Court (UKSC 2015/0233) over their judicial review of the employment tribunal fees regime (in which the IWGB intervened), the Government says:

Although she acknowledges that the evidence demonstrates that there has been a significant drop in the number of claims (she says of 66%-68%; Unison says of 70%: see §§ 108-109 below) she does not accept that this means the Fees Order breaches the fundamental rights of individuals. When a fee is charged for something which was formerly free, necessarily there will be an impact on demand. …

103 Page 62

46

individual will say the written contract is bogus, the Tribunal will engage in an Autoclenz

investigation of what the true obligations are, find the relevant facts, and apply the law. The facts

will often be disputed but once found the judge will apply the law without much consideration as

to who has to prove what. The facts either constitute a working relationship which falls within

the definition of a worker or they do not. The same exercise would need to be undertaken no

matter with whom the burden of proof lay.

115. Chapter 8 recommends104:

Government should create an obligation on employment tribunals to consider

the use of aggravated breach penalties and costs orders if an employer has

already lost an employment status case on broadly comparable facts –

punishing those employers who believe they can ignore the law.

116. Broadening the circumstances in which a claimant could obtain aggravated damages from

an employer would of course be welcome. Allowing for costs orders for claimants who are up

against respondents who have already lost cases on broadly comparable facts would, however,

take us no further than our current position. Indeed, not only do the Employment Tribunals

(Constitution and Rules of Procedure) Regulations 2013 allow for costs and preparation time

orders on the basis that a respondent pursues a defense which has no reasonable prospect of

success or if a party acts unreasonably (which would likely be the case in this example)105, but the

current rules also allow for a response to be struck out on the same grounds106.

117. Chapter 8 recommends107:

Government should allow tribunals to award uplifts in compensation if there

are subsequent breaches against workers with the same or materially the same

working arrangements.

118. Yes, increased compensation would be welcome, but much will depend on the detail. This

is also no substitute for proper punitive fines on employers who do not abide by the law. If there

was a fine for example of £20,000 for every bogusly classed worker who is deprived of their rights,

the situation would be cleaned up pretty quickly. These compensation, costs, and aggravated

breach proposals also do absolutely nothing to address the situation where a company bogusly

classes workers as independent contractors until they are taken to tribunal the first time. There

needs to be an incentive for companies to obey the law before they are taken to court.

104 Page 63 105 Rule 76 106 Rule 37 107 Page 64

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119. Chapter 9 says108:

The Review believes that the principles underlying the proposed NI reforms in

the 2017 spring budget are correct. The level of NI contribution paid by

employees and self- employed people should be moved closer to parity while

the Government should also address those remaining areas of entitlement –

parental leave in particular – where self-employed people lose out.

120. Given the Review’s generally confused discussion around “self-employed” v “worker” it is

not entirely clear what is meant here. But we will assume that this means that workers, who are

currently taxed as self-employed, should have to make the same national insurance contributions

as employees. We would oppose this for the reasons already given above: the proposal makes

no account for the fact that workers often have to invest in the tools of their trade (unlike the

average employee) and as such it is in our view justified for them to enjoy some tax advantages.

We make no comment about genuine independent contractors or about highly paid workers such

as partners in law firms.

121. We would of course welcome an entitlement to parental leave for workers. However it

is unclear why workers should not be entitled to the same parental leave and pay as employees

and enjoyed on the same terms. Indeed, it is our contention that they should be entitled to this.

122. The recommendation to increase NI rates for self-employed people (which would include

workers), resulting in a take home pay cut for workers in the so-called “gig economy”, is all the

more concerning considering the Review’s apparent belief that employer NICs is a less urgent

matter109:

The Review believes that, over time, there is a case for moving to a more equal

tax treatment of self-employment: it follows that there is a case for companies

and others who engage self-employed labour to contribute more to the overall

NI payments made by the self-employed, in the same way as they do for

employees.

123. Although, to be fair, this may be due to the Review’s incorrect belief that employers

already are liable for NICs on behalf of workers (see above).

124. As Chapter 10 appears to be directed at genuine independent contractors, whom we do

not count among our membership, we will not engage with all of the recommendations. A few

general comments on this chapter suffice:

a. It is again extremely unhelpful that the Review inaccurately confuses self-employment

and presents worker status as though it is mutually exclusive with self-employed status.

In this light, the Review’s assertions that self-employed people are not covered by trade

108 Page 72 109 Page 72

48

union rights or entitled to automatic pension enrollment with employer contributions are

utterly untrue at least so far as workers are concerned.

b. Despite every recently decided “gig economy” tribunal case on the matter confirming that

the claimants were workers, the discussion in Chapter 10 appears to proceed on the basis

that they are not workers, but are rather independent business people working via

“platforms”. Once again this is straight out of the “gig economy” company strategy

handbook. For example, compare:

i. The Review’s passage110:

Unlike the statutory employment protections enjoyed by

workers and employees, portable benefits reflect the more

dynamic working arrangements of many self-employed people

and so are tied to the individual, rather than to a specific

company. In the sharing/gig economy, this means that

individuals could effectively move freely between platforms

because benefits accrued while working on one platform could

be retained and topped up if the individual started working on

another platform instead or even simultaneously.

Portable benefit platforms can be third-party vehicles supporting

gig economy businesses to make payments on behalf of an

individual working through them. This might cover benefits such

as sick leave, holiday leave, occupational illness or injury, pension

plans, and further training.

ii. With the Uber judgment111:

…it seems to us that the Respondents’ general case and the

written terms on which they rely do not correspond with the

practical reality. The notion that Uber in London is a mosaic of

30,000 small business linked by a common ‘platform’ is to our

minds faintly ridiculous.

We need say no more.

110 Page 76 111 Ibid.

49

125. Chapter 12 says112:

Government should reform Statutory Sick Pay so that it is explicitly a basic

employment right, comparable to the National Minimum Wage, for which all

workers are eligible regardless of income from day 1. It should be payable by

the employer and should be accrued on length of service, in a similar way to

paid holiday currently. Government should ensure that there is good awareness

of the right amongst workers and businesses.

126. Extending SSP to workers (in addition to employees) and removing the income threshold

is spot on, and by far the best proposal in this report. However, our enthusiasm for this

recommendation as a whole is considerably dampened by the fact that it also calls for a reduction

in SSP for some employees. SSP, which only kicks in after the third consecutive day of illness and

pays less than £90 per week is already inadequate as is. The idea that the Review wants new

employees to have to earn the full entitlement to six months coverage based on time on the job

is truly heartless. What does the Review expect the cleaner who just transferred to a new job

because her old boss was bullying her too much to do if she has an accident or develops a serious

illness within the first few months? To the extent that the Review seeks to modify SSP entitlement

for employees at all it should be to increase the payment to an amount which actually allows

employees to pay bills whilst ill. The inadequacies of the SSP regime- which often has the effect

of constraining low paid employees to work whilst sick- have been a central focus of IWGB

campaigning113.

127. The Review’s supposed basis for the suggestion to pare back SSP entitlement for

employees- that there is a danger that the current regime serves as a disincentive to hiring- does

not appear to be based on any evidence. If it is based on evidence, for whatever reason the

Review has chosen not to reference it among the 105 footnotes to the report.

128. Chapter 12 recommends114:

Those individuals with the relevant qualifying period are already entitled to

have their job protected for a period of time when they are away from work for

perfectly reasonable reasons, for instance, having a child. A similar approach

should be adopted for sick leave with individuals having the right to return to

the same or a similar job after a period of prolonged ill health. This right to

return should be conditional on engagement with the Fit for Work Service when

an assessment has been recommended.

112 Page 99 113 For example, see the 3 Cosas Campaign: https://www.youtube.com/watch?v=DfWuP8JxVpk 114 Page 99

50

129. It is not entirely clear that this is providing a new right beyond those already covered by

disability discrimination legislation or the right to claim unfair dismissal (upon completion of the

qualifying period). And as with much of the report, the unfortunate lack of substantive detail

makes the proposal rather difficult to evaluate. But to the extent that the objective is to increase

security for people on sick leave, and make it harder for employers to dismiss them on the grounds

of health, then we welcome it.

CONCLUSION

130. In sum, out of the Review’s 52 proposals, we choose not to comment on 15 as we lack the

relevant expertise or direct experience of the issues they seek to address, 17 are so bland or

devoid of substance or teeth we feel we cannot really assess their supposed value, 12 would

probably do no harm but also won’t achieve a whole lot, 4 are a mixed bag- containing both good

and bad elements, 2 are bad, 2 have potential to be good but are so devoid of detail the likely

impact is difficult to assess, and 1 recommendation we can wholeheartedly endorse in its current

form.

131. With regard to our three modest yet essential proposals of proper government

enforcement with punitive fines to deter bad behaviour, elimination of employment tribunal fees,

and increasing rights for the worker category, the Review fails miserably. The Review’s modest

proposal for limited increased government enforcement has no substance whatsoever or any

evidence of any thought having been put into how it might be effective, the Review does not call

for the total elimination of tribunal fees, and its proposal to change rights for workers is extremely

limited and/or undetailed and in the case of minimum wage would make things worse for many.

Even if every single one of the Review’s recommendations was implemented, we believe very

little would change for workers in the so-called “gig economy”. They would similarly do virtually

nothing to improve things for outsourced cleaners and security guards and absolutely nothing to

change the lot of foster care workers.

132. In the Forward to your report you say:

…but with the publication of this Report the work of the Review is complete. It now falls

to the Prime Minister, the Government and Parliament to decide how to respond to our

recommendations.

You are right. And it now falls to us to endorse the small number of helpful yet insufficient

proposals, ensure the recommendations which will make things worse are pronounced dead on

arrival, and more than anything, continue to fight for workers’ rights as your report has so

woefully under delivered.

51

Yours sincerely,

Dr. Jason Moyer-Lee

IWGB General Secretary

Henry Chango Lopez

IWGB President

Mags Dewhurst

IWGB Vice-President

Claimant in Dewhurst v CitySprint

James Farrar

Chair of United Private Hire Drivers Branch of IWGB

Co-lead claimant in Aslam & Ors v Uber & Ors

Yaseen Aslam

Co-lead claimant in Aslam & Ors v Uber & Ors

Megan Brown

Chair of Couriers and Logistics Branch of IWGB

Deliveroo rider

Guy McClenahan

Vice-Chair of Couriers and Logistics Branch of IWGB

Deliveroo rider

Billy Shannon

Lead witness in IWGB v Deliveroo

52

Andrew Boxer

Claimant in Boxer v Excel

Claimant in Boxer v CitySprint

Alex Marshall

Claimant in Kowal & Ors v TDL

Tomasz Kowal

Claimant in Kowal & Ors v TDL

Ronnie De Andrade

Claimant in Kowal & Ors v TDL

Andrew Ramsay

Claimant in Kowal & Ors v TDL

Anderson Oliveira Da Silva

Claimant in Kowal & Ors v TDL

Mohaan Biswas

Recruitment/Organiser Officer for Couriers and Logistics Branch of IWGB

Deliveroo rider

53

Appendices

Item Appendix

Evidence of Greg Marsh Deliveroo investment A

Email from IWGB General Secretary to Matthew Taylor, 17 February, 2017

B

Email exchange with Taylor Review Head of Secretariat re IWGB evidence

C

Email exchange with Head of Secretariat re meeting with Matthew Taylor

D

IWGB FOI request regarding Greg Marsh shares in Deliveroo

E

Twitter exchange with Matthew Taylor re workers being self-employed

F

IWGB requests for Taylor Review “research” G

Twitter exchange between Matthew Taylor and Guardian columnist Aditya Chakrabortty

H

54

Appendix A - Evidence of Greg Marsh Deliveroo Investment

55

Appendix B - Email from IWGB General Secretary to Matthew Taylor, 17

February, 2017

56

Appendix C - Email exchange with Taylor Review Head of Secretariat re IWGB

evidence

57

58

Appendix D - Email exchange with Head of Secretariat re meeting with Matthew

Taylor

59

60

Appendix E – FOI request

61

Appendix F – Twitter exchange about regarding employment status definitions

62

Appendix G – IWGB request to see Taylor review research (x2)

63

64

Appendix H – Aditya Chakrabortty and Matthew Taylor Twitter exchange