Home IR35 – What Is It And How Does It Affect You? REC calls for delay to IR35 reforms in new election manifesto

REC calls for delay to IR35 reforms in new election manifesto

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The Recruitment and Employment Confederation (REC) has launched an election manifesto calling on the next government to adopt a new approach to work in order to boost the economy and support workers.

The manifesto, entitled:

“Making Great Work Happen”

says it is based on the expertise of the UK’s £35 billion recruitment industry, which places a million permanent employees into new roles each year and a million temps and contract workers into jobs every day.

In the run-up to the general election on December 12, the REC and its members will be lobbying political parties and individual candidates to back the policy recommendations laid out in the manifesto, which calls for a delay to the roll-out of changes to IR35 until 2021, an official regulatory framework for umbrella companies and changes to the IR35 policy to reflect the many new flexible ways of working that have developed over recent years.

In the first part of the manifesto, the REC calls on the next government to ensure that employment regulations are proportionate and reflect modern working practices. Claiming that flexible working is no longer “atypical”, it states that 39 per cent of people have at some point worked as a temp, contractor or freelancer, and calls for any future regulatory changes to acknowledge this fact as a starting point. It also calls for the Apprenticeship Levy to be extended to cover flexible staff.

The second part of the manifesto suggests that the UK’s Industrial Strategy has to date focussed too narrowly on just skills and asks the next government to put people at the heart of a broadened Industrial Strategy that supports companies on employee engagement, leadership and managerial development “to really get the economy flying”. It also petitions the creation of a government-backed “Good Recruitment Taskforce” to boost diversity and inclusion, help businesses to make hiring decisions based on long-term value rather than low cost, develop recruitment tools including peer-to-peer networks, and help businesses to hire the right staff at the right time.

The third part of the four-part manifesto is centred on creating an improved regulatory and enforcement framework to protect the interests of compliant businesses and workers. The REC calls on the next government to only implement IR35 and other regulatory changes when it’s clear that such policies can be effectively delivered; the manifesto requests that IR35 reform in the private sector be delayed until at least 2021 “to ensure that implementation problems in the public sector are not repeated”. It calls on the next government to define and regulate umbrella companies, which are currently simply treated as any other employer, and to ensure that HM Revenue & Customs is sufficiently resourced to tackle non-compliant umbrella schemes.

It also challenges the proposed post-Brexit immigration policy, suggesting that the salary threshold be lowered from £30,000 to £20,000, highlighting that candidate availability has been declining month-on-month since 2013. The REC also propose that visas be held by the worker rather than sponsored by an employer to prevent exploitation, and call for such visas to have a two-year validity period.

The final part of “Making Great Work Happen” calls for public policy to keep up with developments in the world of work, and says that 73 per cent of business leaders expect significant disruption to how we work over the coming years. Suggesting that the rising number of apps and digital platforms that meet the definition of an employment business or agency but don’t recognise themselves as such can expose workers to exploitation or lead to non-compliance, the manifesto calls for regulation to keep pace with technological change. Citing the collapses of Carillion and Thomas Cook, the REC also ask the next government to build on the existing Rapid Response Unit with the Department for Work and Pensions (DWP) to better facilitate career transitions for affected workers.

Neil Carberry, chief executive of the Recruitment and Employment Confederation, said: “This election should be about work. After all, few things matter more to people. Policies to make great work happen should be a priority for any incoming government.

“Businesses are ready to work with the next government to ensure the jobs market remains strong and versatile. This is why we call on all parties to ensure their manifestos help to make great work happen.  Putting people at the heart of the industrial strategy – including through good recruitment – is an essential part of addressing the UK’s productivity problem.

“Our manifesto lays out a number of policy asks which together would support and protect workers while boosting business growth.

“Our call on broadening the apprenticeship levy to support the UK’s flexible workforce is a measure of how serious any government is about work. Policies which are designed to exclude temporary and part-time workers need to be consigned to history – a much more flexible approach is needed.

“Delaying IR35 implementation is not about avoiding change – it is about making sure change is effective. Without adequate time for businesses and HMRC to prepare, there is a huge risk that compliant firms and contractors will lose out to the non-compliant.”

The full manifesto can be viewed here. 15th November 2019.