The report, called Good Work: The Taylor Review of Modern Working Practices, which was published this week, also recognised the importance of flexible working conditions for both employers and employees.
The news that the review recognised the importance of flexible working was greeted warmly by the pub trade.
“While there is undoubtedly an important role for flexibility in the labour market, we believe that too many employers and businesses are relying on zero hours, short-hours or agency contracts, when they could be more forward thinking in their scheduling,” the report said.
“The fundamental point remains: Government must take steps to ensure that flexibility does not benefit the employer at the unreasonable expense of the worker, and that flexibility is genuinely a mutually beneficial arrangement.”
The report highlighted the case of brewery Adnams, which used zero-hour contracts to accommodate the seasonal nature of its business.
However, the report said the company recognised how this contributed to employees experiencing in-work poverty and moved all their existing staff onto contracts that guaranteed a minimum number of hours a week. To tackle low pay, they reduced and redistributed bonuses paid to their senior team, it said.
The Government will now engage with stakeholders across the country, including employers and employees, to understand their views ahead of publishing a full response later in the year.
Business Secretary Greg Clark said: “We have record numbers of people in work thanks to our flexible labour market. Being in work is important but people also deserve to be treated fairly by their employers whatever work they are carrying out. I’d like to thank Matthew Taylor and his expert panel for conducting such a thorough and detailed review. We will be engaging people and organisations across the country to continue this important debate.”
Here’s what the industry had to say:
Association of Licensed Multiple Retailers, chief executive, Kate Nicholls
“It is good to see the Government recognising the value of flexible working for both employers and employees and not seeking to ban the use of such arrangements.
“In our discussion with members, and with the wider eating and drinking out sector, we have not seen any evidence of widespread misuse of contracts and flexible working. It is important that employers and employees still have the chance to benefit from a working arrangement that suits all parties. A measure that allows employees to request a guaranteed hours contract is fine, as long as the Government’s approach is one of collaborative working, rather than naming and shaming of employers unable to provide guaranteed hours.
“What we need now from the Government is engagement with employers to develop guidance and a code of practice to address concerns around contracts and recognition of good practice.
“The report also addresses the issue of employment costs and seeks to avoid any increases in the cost of employing people. While this is welcome, the possibility of a higher rate of National Minimum Wage for hours that are not guaranteed in a contract would increase costs for businesses and likely be a significant administrative hassle. Further reassurance from the Government that employment costs are not going to increase for employers is essential at this uncertain time.”
British Hospitality Association, chief executive, Ufi Ibrahim
“We are pleased that the Taylor Review has recognised that zero-hour contracts are welcomed by many workers as well as employers for their flexibility. The review talks of minimum wage increases for people on zero-hour contracts. We believe any increase must be set by the Low Pay Commission having access to all the available facts, and not by politicians. Taylor emphasises the goals of good work for all. Hospitality and tourism, the fourth largest UK industry employing 4.6m people, is a force for social mobility and is a top six employer in each region.”
British Beer and Pub Association, chief executive, Brigid Simmonds
“We will be looking at its recommendations closely, and I very much welcome that the report recognises that flexible working can provide valuable opportunities, for both the employee and the employer; this is certainly vital in the hospitality sector, where pubs provide a great deal of flexible employment. We already work closely with the Low Pay Commission, and we look forward to engaging in the next stages of this agenda.”
British Chambers of Commerce, director general, Dr Adam Marshall
"While the notion of a wage premium in exchange for uncertain working hours is superficially attractive, it could have unforeseen consequences, and push wage costs up elsewhere. Further expert consideration of the potential impact of such a measure on jobs will be needed. If the new category of 'dependent contractors' proposed by the review is implemented, it must have a clear legal definition to prevent any ambiguity or unintended knock-on effects. The Government should consult widely with business and employees over the coming months to ensure any response to the Taylor Review is proportionate, fair and above all unbureaucratic.”