Public sector privatisation leads to increased exploitation of workers

08 April 2013

By Sarah Glenister, IER staff

Evidence has already emerged to show how workers are being exploited when the public sector is sold-off to private interests with only profit in mind and, shockingly, this is happening to those in front-line occupations policing our streets and caring for our health.

The rise of zero-hour contracts

Zero-hour contracts are a growing trend among employers and it is one that deeply concerns us at the Institute of Employment Rights. Under these terms, employers are not obliged to provide work, but employees are forced to be available for it or face losing their livelihoods. Staff can be called in on an ad hoc basis, often at very short notice, and they are only paid for the hours spent working – which can vary greatly from week to week.

“It can be applied in such a way that a worker, in order to have any chance of getting paid work, is obliged to be available for work at the whim of the employer and so cannot commit themselves to any other employment,” The Labour Research Department told the Guardian.

Unison highlighted recent research showing 41% of homecare workers are on zero-hour contracts, and other skill areas such as cleaning are also being impacted. For staff in these industries, such arrangements are nothing new, but for the first time health professionals such as those providing hearing, psychiatric, physiotherapy and cardiac services are being affected.

“In the case of the NHS, the new commissioning system, which means that providers are not guaranteed work, is having the knock-on effect of pushing employers towards contracts that mirror such arrangements,” Unison explained.

Similar contracts are appearing in the police force, with G4S security contractors hired under uncertain and vulnerable conditions in order “to provide resilience to forces, and ensure they can respond effectively to peaks and troughs in demand, typically coinciding with major sporting events or music festivals,” G4S told the Guardian.

Spokesman for the Police Federation Steve Evans explained that the outsourcing of such requirements to G4S was part of a deal signed last year – an agreement which the newspaper discovered meant “custody detention officers” employed by G4S were expected to restrain people and ensure their safety while in custody. Mr Evans criticised this form of privatisation, highlighting: “Things can change rapidly in a custody environment – legislation, training, equipment and policies and an individual’s experience and knowledge could quickly become out of date if they are not regularly working in the environment.”

Unison highlighted recent figures from the Office for National Statistics, showing that 200,000 workers in the UK were on zero-hour contracts in 2012, while a survey by the Industrial Relations Service showed nearly a quarter of all of Britain’s employers now use such terms to hire staff – many of which are simply left waiting, unpaid, by the phone, to be called into work.

So what can workers do to get a better deal? ACAS advises that “the provisions of the National Minimum Wage Regulations … state that workers on ‘stand-by time’, ‘on-call time’ and ‘downtime’ must still be paid the National Minimum Wage if they are at their place of work and required to be there. Similarly, such time is likely to count as ‘working time’ under the Working Time Regulations if the worker is required to be on-call at the place of work. This means that it’s against the law to ask employees to ‘clock off’ during quiet periods but still remain on the premises.”

It is important that union reps make sure this law is upheld in the workplace when zero-hour contracts are in place.

However, the movement needs to go further than simply protecting the few who wait for work on site. The IER believes that it is time the government recognised the threat of zero-hour contracts both to workers and to the users of frontline services including the police and healthcare. How comfortable and trusting will the public feel with these bastions of authority in society if the very people in uniform are essentially temps?

A (deliberately) weakened labour force

All signs point to the Coalition being in favour of low-paid, vulnerable labour, which businesses can pick and drop as they choose. Ideologically, this government is entirely focused on the prowess of businesses – the so-called wealth creators. As a result of this, policymakers have begun to view staff as just another raw material feeding the industrial process. And to maximise profits – they reason – one must keep the price of these materials down.

They forget our workforce is made up of people. Hard-working, low-paid human beings – the consumers that keep our economy afloat, the doctors and nurses that save our lives, and the police officers that put themselves in danger to keep our streets safe.

“We have been anticipating downward pressure on the National Minimum Wage since the Coalition took power,” Director of the Institute of Employment Rights Carolyn Jones said. “Reducing the cost of labour is a fundamental part of the government’s ideology, regardless of whose lives those policies tear apart.”

“Our predictions have been borne out in the research we have conducted for our Coalition Timeline, which tracks the way the government’s pro-profit, anti-workers’ rights ideology is shaping policy,” she added.
And that ideology has been made stark by the voices of Tory backbenchers over the last three years.

In June 2011, Conservative MP Christopher Chope launched a Bill to promote the “right” of employees to opt out of the minimum wage to give themselves a competitive advantage in a labour market that is saturated with unemployed workers vying for a tiny number of jobs.

The very same month, Tory MP Philip Davies argued that disabled people should be exempt from the National Minimum Wage, allowing employers to pay them less, seeing as they are – in his words – less “productive”.

Both politicians said being exempt from the Minimum Wage would allow employees the choice of providing labour at a lower cost – but what worker chooses to toil for such little recompense? Only those who are forced to do so out of desperation in an austerity-strangled economy that has failed to provide jobs.

“The frontbenchers may not have repeated these hardline views verbatim, but let’s not fool ourselves that they wouldn’t try and get away with these abhorrent ideas if they could,” Ms Jones continued.

“Instead of coming forth and spouting their anti-worker philosophies in the public eye – where they know the people will rail against them – they have instead slipped policies in here and there which have the cumulative impact of destroying employment rights, including the National Minimum Wage, by the back door.

“With the Coalition in power, workers who are not aware of their rights or who are too desperate to proactively protect them could find themselves working for coppers, with uncertain hours, no protection against unfair dismissal and no promise of a redundancy package either,” she said.

Indeed, the job security and pay of the UK’s workforce has been under attack from various sides since 2010.

Farewell Minimum Wage, redundancy pay, access to justice for all…

The government’s apprentice scheme pays businesses for taking on apprentices – at a poverty wage of £2.65 an hour. And how do those companies use what could be a valuable opportunity to train youngsters and help them into long-standing work? They exploit it for cheap labour, with many job advertisements appearing for apprentices in unskilled jobs, conducting exactly the same duties as their colleagues, but paid at less than half the salary.

A cursory look at the government’s own Work Programme for unemployed youth clearly shows a similar drive among the policymakers themselves, controversially offering unpaid labour to large businesses such as Poundland and pretending it is for the good of the workers, who they say will gain work experience from this degrading and compulsory practice. Nevermind the fact many unemployed people have been in work before, or the fact that every job forced on unpaid workers is one less available for those who need to earn a wage.

A story that broke this weekend highlights just how such policies are an easy way for employers to exploit workers in a brutal and unashamed way. A leaked document from DIY giant Homebase, which was reported on by blogger Tom Pride, showed branches were being encouraged to take on unpaid workers rather than providing jobs. The caption on the front cover of the document says: “Would 750 hours with no payroll costs benefit YOUR store?”

Elsewhere, under new legislation currently being pushed through in the Enterprise and Regulatory Reform Bill, employees will be given the “choice” to forgo their rights to a redundancy settlement, to claim compensation for unfair dismissal, and to have the right to request flexible working or training opportunities. In return they will receive shares – often of negligible value – in their organisation. But for many this will not be a choice, it will simply be an excuse for bad employers to hire desperate individuals on the condition that they accept the employee shareholder agreement and give up fundamental employment rights.

And now a brand new policy, brought in last week, reduces the minimum consultation period an employer must engage in with their workers and their representatives when they plan to sack 100 or more employees to 45 days – half of its previous length of 90 days.

Should workers wish to complain about any injustices they suffer under this new system, they will find it difficult. Fees for employment tribunals coming in this summer will make it prohibitively expensive to claim for unfair dismissal and legal aid has already been retracted.

These are the working conditions public sector workers are being forced into. Why? Because the government is cutting the cost of public service provision before passing it over to private providers. So the axe is coming down on employee pay, conditions and contracts. Wages and job security are being slashed, and with further privatisations ahead, the situation is only going to get worse.

What can trade unionists do to help protect workers in the public sector? This is the question the Institute of Employment Rights will ask some of the top names in the labour movement on April 17th in London and May 8th in Liverpool.

Join us to debate privatisation, cuts and employment rights issues with Dave Prentis, General Secretary of Unison; Karen Jennings, Assistant General Secretary of Unison; Rachael Maskell, Unite head of Health; and officials from GMB, PCS and the TUC.

Book now to avoid disappointment.