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CBI

Sharing Economy UK response to Taylor Review on modern working practices

Sharing Economy UK has responded to Matthew Taylor’s review and the Prime Minister’s speech introducing the report.

Richard Laughton, Chair of Sharing Economy UK, said:

“The report rightly recognises that labour market flexibility is a key strength of the UK economy, driving better outcomes for everyone. Sharing economy businesses agree that flexibility must be matched with fairness and evolving the labour market, as the report concludes is the right way forward.

“Sharing economy platforms often offer great opportunities to earn additional income in a way that fits with their users’ lifestyles. They can also provide a route to entrepreneurship and engage parts of the labour market that are hard to reach. What is clear is that people who use these platforms hugely value their flexibility. That’s why businesses in the sharing economy are ready to work with the Government on developing an effective approach to support both fairness and flexibility in the sector.

“Some proposals will concern sharing economy firms. Changes to the classification of participants in the gig economy and application of the minimum wage could have negative unintended consequences for individuals who value the choice and flexibility working in such a way provides.

“The Government will need to consider these aspects carefully, alongside proposals for any future tax changes, to ensure our labour market retains the flexibility and entrepreneurship that has made it the mainstay of the UK economy.”

On employment status, Richard said:

“Sharing economy firms will welcome the Review’s commitment to maintaining our three forms of employment relationship. This established approach is already well-adapted to the modern economy.

“However the reclassification of participants in the gig economy as dependent contractors could reduce the flexibility that we know individuals value highly and lessen the opportunities available.

“Firms agree that more should be done to help businesses and individuals understand their rights – and welcome the proposal for a day one statement of terms and a fast-track tribunal process to establish status.

“However, proposals to rewrite employment status tests will ring alarm bells in many sharing economy companies. Shifting the goalposts will increase uncertainty and make the law less able to respond to new ways of working in the future.

“Reversing the burden of proof will also increase uncertainty. Individuals would be better protected by enforcing existing legislation and increasing understanding for employers and labour market participants.”

On minimum wages and the Low Pay Commission, Richard said:

“A sustainably rising National Living Wage is at the heart of our system for protecting workers. Sharing economy firms strongly support the work of the independent Low Pay Commission on this.

“Ensuring fair treatment for participants in the sharing economy is something all firms want to see. On payment, the sector is ready to engage with the Low Pay Commission and others on the best way forward.”

On benefits, Richard said:

“The shift to modern flexible employment practices requires innovation around how we deliver benefits to participants in the sharing economy. Firms know it’s the right thing to do and are ready to explore the use of online platforms to facilitate their delivery.”

On tax, Richard said:

“It is right that tax is considered part of the equation when looking at the rights and benefits that individuals receive. Any reforms should not be rushed and be part of a long-term holistic review, as report recommends, to ensure that the tax incentive for entrepreneurial activity is enhanced rather than lost.”