Wages, Migrants and Protecting Workers’ Rights:
A Programme for a Corbyn-Led Labour government
Migrant Workers and the EU Referendum
Migration: the Facts
Brexit: the Facts
Trade Union Principles – the Fight for Unity
The Economy and Migration
Making the Labour Market Work for Us: a Programme for a Corbyn-Led Labour Government
The Contract of Employment
The Worst Abuses we Need to Correct:
Zero Hours Contracts
Other Reforms Needed:
Trade Union Action
Company Law Reform
The Minimum Wage
Our Programme of Employment Rights for a Corbyn-Led Labour Government
Britain is booming, we are told. A record 31.7 million workers are in employment. That’s not all. The UK economy is greedily drawing in migrant labour to satisfy the needs of production. Compare this with the wretched employment record of continental countries such as Spain and Greece, where nearly half of their young people are unable to find a job. That is the tale that the Tories are spinning us.
There is a dark side to this. There has been a wholesale casualisation of the jobs market in the UK, a massive decline in security and conditions of employment here. The UK has experienced no rise in real wages and working class living standards since the Great Recession struck in 2008. And productivity, output per worker-hour, has remained virtually stagnant all that time.
Part of the reason for this debasement of the dignity and respect due to labour is the protracted deindustrialisation which has afflicted the former industrial heartlands of this country. Whole regions have seen relatively secure well-paid jobs disappear as the coal mines, steel mills and great factories closed. Nothing like them has taken their place. Instead a generation of desperate people, anxious to grasp any opportunity however precarious and badly paid, has emerged to work in call centres, fast food outlets and supermarkets. Long established trade union traditions have been eroded in the process.
The Great Recession has accelerated these trends enormously. It provided a spur for bosses to seek out ways of squeezing more and more out of their workforce in return for providing less and less. Workers are now seen by their employers as disposable items.
Britain is being steered in the direction of a low wage, low skills economy. How low can we go? Of course it is utterly unrealistic to envisage Britain, formerly the workshop of the world, being able to compete with the starvation wages of the third world – even if that were desirable. But capitalists in Britain don’t have a strategy for a long term future for the country, only an instinct as to how to make money in the here and now. And they want to drive wages down.
Polly Toynbee (Guardian 02.08.16) gives the example of the road transport industry:
“This is what market failure looks like. There’s a shortage of HGV drivers in an economy that relies on moving mountains of heavy goods. Road haulage companies complain bitterly that they can’t recruit; operators are turning business away for lack of drivers.
Yet at the same time there are large numbers of the unskilled, especially the young, who need training to get a job, or an upgrade from zero-hours, low-paid work to something better. Easy, you might think, to connect the two – but it’s not happening, according to last week’s report from the House of Commons transport committee.”
What is happening instead is that the road haulage companies are recruiting drivers from abroad, mainly from Eastern Europe, and are able to drive down workers’ conditions wholesale in the process. If the firms were to spend money on training, they fear their drivers would be poached by others; so everybody aims to poach and no training gets done. This is the road to ruin, and in Britain it is happening in one industry after another.
Naturally at the time of writing the CBI employers’ federation is opposing a Tory proposal for a minimal apprenticeship levy, despite the fact that any improvement in standards of training would benefit employers in the long run. Should we really leave these people in charge of British industry?
‘Labour market flexibility’ means that workers are under the hammer. It is also a formula for long term industrial failure.
Migrant Workers and the EU Referendum
So are migrant workers really being used to undercut ‘British’ rates of pay? Many feel that this is the case. The June 2016 vote for Brexit was driven in large part by fears about migration. It is completely understandable that millions of workers feel left behind when they can see that others in Britain have prospered mightily over recent years. But it is a dangerous illusion to identify migrant labour as the enemy.
The vote for and against departure from the European Union (EU) was mixed. There were different votes by age, by region, and by people’s usual voting intention.
• Young people were more likely to vote for ‘Remain’.
• The big metropolitan centres generally voted to ‘Remain’. These areas tend to have the highest level of migrant workers, but they also are generally more prosperous, so migrant labour is seen as less of a threat to jobs, wages and conditions.
• Regions such as South Wales and the North-East of England voted heavily to ‘Leave’. These regions are parts of the country with low levels of migration. But they are areas of longstanding industrial decline and the folk there may well feel ‘left behind’. Living standards here are not threatened by an influx of migrants, but by the lack of jobs to replace their traditional industrial employment. Such jobs as are created are low-paid and insecure.
• It is generally the case that the majority of those who voted to ‘Leave’ were Tory or UKIP voters; nationally about 60% of Tories and presumably almost all UKIP voters were Brexiteers; while almost two-thirds of Labour and SNP supporters voted to ‘Remain’. Though there was a left vote of protest against the EU, it was dwarfed by opposition to European Union membership from normally right wing voters. It is simply not the case that the majority of those who voted to ‘Leave’ were disaffected working class voters from distressed former industrial areas.
• Traditional agricultural areas such as Boston in Lincolnshire (which voted strongly for ‘Leave’) faced different problems again regarding migration. They have received a very significant influx of migrant labour recruited for fruit picking and other agricultural work during the growing season. As a result public services may well be overwhelmed, particularly since the local authorities are usually controlled by the Tories, who are utterly uninterested in the plight of working people whether ‘native’ or ‘foreign’. For the most part, particularly in agricultural work, these migrant workers are seasonal and go home when the work is done.
We shall show that some of these migrant workers are deliberately recruited in order to drive down rates of pay in the UK. A chain of supply which extends from UK-based employers to labour market intermediaries operates across EU borders and is organised to take advantage of the EU rules on freedom of services. This is deliberate undercutting. Migrant workers are the victims, not the enemy.
All the same the evidence is that the overall effect of migration on living standards is marginal as a recent report entitled ‘Brexit and the Impact of Immigration on the UK’ from the Centre for Economic Performance (CEP) at the London School of Economics shows that EU immigration has benefited the UK overall
http://cep.lse.ac.uk/pubs/download/pa015.pdf):” title=“read here”>read here
“Second, because EU immigrants are more likely to be in work and are younger and better educated than the British born, they pay more in tax than they take out in welfare. So immigrants have helped subsidise the NHS and other public services for British people…. Finally, people born in the UK who live in areas of the country that have had big influxes of EU migrants have not suffered lower wages or job opportunities… To many people it seems obvious that migration is bad for jobs as we all know stories of how a friend has gone for a job and a migrant got it. But there isn’t a fixed lump of jobs. Migrants have to live, sleep, eat and drink so they increase demand and this increased expenditure creates new jobs. This means that the net effect of immigration in an area turns out to be zero.”
The Report continues:
“Median real wages for those born in the UK were growing from the late 1990s until the global financial crisis. Since then, wages have fallen by about 10%. Such falls in real wages are unprecedented in the post-war period. The story of the latest recession was not that many more people lost their jobs, but that most people’s wages fell. (Figure 6) confirms that this fall happened while EU immigration was rising – but equally the big gains in real wages for UK workers were experienced at a time when EU immigration was also rising. So the cause of the fall of wages is the impact of the Great Recession – not immigration.”
This is confirmed by the most recent ‘2011 Workplace Employment Relations Study’, a Report issued by the Department of Trade and Industry every few years. The first part is entitled ‘In the Shadow of Recession’ (since the crash of 2008).
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/336651/bis-14-1008-WERS-first-findings-report-fourth-edition-july-2014.pdf)” title=“read here”>read here
• The Survey found that 41% of employers had responded by freezing wages,
• 28% were not filling vacant posts,
• 25% had implemented ‘changes in work organisation’ (to be looked at in more detail later),
• 13% had made compulsory redundancies.
The next section of the Report is called ‘More Work, Less Pay? Employees in Recession’, to which the simple answer to the question is ‘Yes’.
In other words the recession produced a huge shake-out at work, a shake-out that hit working people hard.
The Great Recession was the biggest collapse in output and employment since the Great Depression which struck in 1929. Its effect on national economies all over the world, and in the world of work, is incalculable and dwarfs any effect of migration upon wages.
The effect of migration on wages is in any case part of a much wider process involving a downward spiral in wages and conditions. This is a deliberate strategy from the boss class. They are concerned for their profits, which collapsed in the 2008 crash and have barely recovered since. The only way they see to revive their profitability is to launch an onslaught on the living standards of the working class.
The Tories, who have been in power since 2010, are hand in glove with this strategy. Their answer to the crisis of the bosses’ system has been to heap austerity upon the rest of us. In doing so, they have launched huge attacks on the welfare state and public services, the most precious gains of working class political campaigning and the biggest achievements of past Labour governments. The Tories’ aim is to load the entire burden of the crisis onto the backs of working people. Tory-led governments since 2010 have imposed vicious austerity policies on the NHS and local government services, while consistently cutting taxes for the rich and big business.
• Your local school is overcrowded
• You have to queue for the doctor or a hospital appointment
• You can’t find an affordable house for sale or rent
Blame the Tories and the system!
• They have viciously cut funding to local authorities
• They have starved the NHS of funds
• They have been systematically destroying social housing, creating an unsustainable house price bubble in the process.
The enemy is austerity and the system of production for profit, not migrant workers!
Migration: the Facts
The CEP Report quoted earlier begins:
• “There are now over six million working age adults in the UK who were born abroad. This proportion doubled between 1995 and late 2013: from 8% to 16%. Immigration has fallen in previous recessions. This did not happen in the latest downturn.
• European Union (EU) countries account for 28% of the total immigrant stock.
• Immigrants do not account for a majority of new jobs. The immigrant share in new jobs is – and always has been – broadly the same as the share of immigrants in the working age population. “
A detailed study of the effects of migration published by the ‘Resolution Foundation’ in August 2016 concluded
http://www.resolutionfoundation.org/media/blog/what-might-lower-migration-mean-for-workers-employers-and-government-policy/):” title=“read here”>read here
• “Net migration has been above 200,000 since the enlargement of the EU in 2004. This has taken the share of migrants in the population from 10% in 2004 to just below 16% in 2016.
• While the growth in the share of migrants in the population did not affect the earnings of native workers overall, it is wrong to say they had no effect. Increased migration did drag on earnings in some sectors (by between 0.5-2.0%), but these small effects do not explain and were in fact dwarfed by the general pay squeeze experienced during the same period (4.7-9.7%). In the next few years a fall in migration will do little to ameliorate the squeeze on wages for native workers.”
In other words migration is generally beneficial to British people, but it is possible that migrant labour may be used to reduce the living standards of some working people. We discuss later what we should do about that.
These conclusions are repeated by many other academic studies. For instance the Bank of England concludes, after drawing mainly positive conclusions about the impact of migration, warns
http://www.bankofengland.co.uk/research/Documents/workingpapers/2015/swp574.pdf):” title=“read here”>read here
“We find that the immigrant to native ratio has a small negative impact on average British wages… Our results also reveal that the biggest impact of immigration on wages is within the semi/unskilled services occupational group.”
Highly skilled workers migrating to the UK had no effect on ‘British’ workers’ wages for the simple reason that they were not in competition with locals. Their skills were not available in the UK labour market.
Relatively unskilled workers’ wages and conditions are more at risk from the deliberate use of migrant labour to drive down standards. But, as the CEP Report indicates, the more likely result of restrictions on migrant labour is that strawberries, cockles and other commodities will simply disappear from the shelves, because native-born workers will not take over these jobs:
“The evidence from research shows that:
1) Immigrants and native-born workers are not close substitutes, on average (existing migrants are closer substitutes for new migrants). This means that native-born workers are, on average, cushioned from rises in supply caused by rising immigration…
2) The less skilled are closer substitutes for immigrants than the more highly skilled, so any pressures from increased competition from jobs is more likely to be found among less skilled workers… These effects appear to be borne out by other studies, but the effects are not large…
3) There is no evidence that EU migrants affect the labour market performance of native-born workers.”
At present we have no idea how the level of migration will be affected by the decision to leave the European Union, since negotiations have not really started at the time of writing. We know that Norway and Switzerland, though outside the EU, have to allow free movement of EU nationals within their borders as a condition of their trade deals with the European Union.
The CEP Report (quoted earlier) supplements the Resolution Foundation’s analysis:
Though the Report mentions the number of migrants in the country, it must be remembered that not all of these are from the EU.
• “In 2015, EU net immigration to the UK was 172,000, only just below the figure of 191,000 for non-EU immigrants.
• EU immigrants are more educated, younger, more likely to be in work and less likely to claim benefits than the UK-born. About 44% have some form of higher education compared with only 23% of the UK-born. About a third of EU immigrants live in London, compared with only 11% of the UK-born.
• New evidence in this Report shows that the areas of the UK with large increases in EU immigration did not suffer greater falls in the jobs and pay of UK-born workers. The big falls in wages after 2008 are due to the global financial crisis and a weak economic recovery, not to immigration.
• EU immigrants pay more in taxes than they take out in welfare and the use of public services. They therefore help reduce the budget deficit. Immigrants do not have a negative effect on local services such as crime, education, health, or social housing.”
How do we explain the Resolution Foundation’s conclusions of “small effects” on wages in some sectors? There is no doubt that migrant labour has been used by employers to deliberately reduce wages in some cases.
Law Professor Simon Deakin comments (‘Social Europe’, 20.06.16):
“The movement of labour into the UK is not spontaneous; it is organised along a chain of supply which extends from UK-based employers (many of them multinationals and/or listed companies) to labour market intermediaries operating across EU borders and taking advantage of the rules on freedom of services. In its extreme form this consists of labour trafficking of the kind which until recently was thought to exist only in certain developing countries.”
This can and must be stopped.
Brexit: the Facts
The negotiations for Britain’s exit from the EU have begun. We have no idea how they will end but we must fight like lions to get the best deal for working people. Despite the claims of Theresa May that she wants all sections of society to have a say in the Brexit negotiations, we should be under no illusions - the Tories will be driven entirely by the various (and sometimes competing) demands of big business. In response, the trade unions and the Labour Party need to draw up demands based on the needs of workers; defending jobs, wages, pensions and public services. The labour movement must also set out a clear programme of defending migrant workers from exploitation or attack.
Much of the hostility towards the EU was fomented by right wing politicians who used the issue of migration and its alleged effect on working class living standards to campaign for a ‘Leave’ vote. What will the effect of Brexit be on migration? As we have pointed out, Switzerland and Norway still have free movement of labour, despite not being members of the EU. Unless negotiators opt to ‘pull up the drawbridge’ and go for an isolationist strategy for the UK then they are likely to have to make a similar concession. If they did prioritise restrictions on migration, this would inevitably impact on free trade with the EU and damage the livelihoods of workers involved in producing exports there – which is a little less than half of all Britain’s exports.
There were some valid reasons for socialists, trade unionists and working class people voting to ‘Leave’ the EU. The fact remains that negotiations with the EU over Brexit will be in the hands of hard right, anti-working class Tories who will try by every means possible to minimise the protections for labour that exist at present.
Workers’ rights did not fall from the sky. They had to be fought for. Some were won in struggle before Britain entered the EU in 1973. Equal pay for women (still very far from being a reality, of course) was passed by an Act of the Labour government in 1970. It was accompanied by trade union struggles like those of the Trico workers in Brentford in 1976 and that of the Ford machinists in Dagenham in 1968, celebrated in the film ‘Made in Dagenham’.
It is also the case that, despite the neoliberal drift of the governing institutions of the EU, some legislation does provide minimal protection for workers. Maternity and paternity pay and rights for part time workers were introduced through legislation from the EU. Other examples are the Working Time Directive, which imposes restrictions on maximum hours worked, and the Temporary Agency Workers Directive, which attempts to protect conditions for agency workers. Both of these Directives were resisted by the New Labour governments of 1997-2010 in the interests of the UK employers. Indeed, any examination of the role of UK governments in the EU demonstrates that the UK has been the most consistent advocate of neo-liberal policies pushing privatisation and de-regulation. On this score, the main enemy of UK workers has not been in Brussels but is firmly based in Westminster.
David Davis, Liam Fox and Boris Johnson are all right wing Tories who would love to use the negotiations to shred workers’ protection. We must be vigilant in doing our best to stop them.
Trade Union Principles – the Fight for Unity
Trade unions are based on the ideas of unity and solidarity. We understand that we are weaker on our own and that through organising together workers can be stronger and can defend themselves better against attacks from the employers.
But for as long as workers have attempted to organise themselves by building unions, employers, governments and other forces have sought to disrupt and wreck workers’ unity and solidarity. One of the most powerful weapons which has been used against us has been the attempt to create and institutionalise divisions on grounds of race and nationality or between migrant and indigenous workers.
These arguments are not new. They have been around in Britain for more than a century and a half. The migrants who were accused of ‘undercutting’ wages in the past were Irish, then Jewish. Jewish workers fleeing persecution in Tsarist Russia and elsewhere were greeted with immigration controls in the form of the Aliens Act 1905 and a flood of antisemitic demagogy. The ‘Manchester Evening Chronicle’ wrote at this time, “that the dirty, destitute, diseased, verminous and criminal foreigner who dumps himself on our soil and rates simultaneously, shall be forbidden to land”. Later migrants from the West Indies and from the Indian sub-continent faced similar discrimination. More recently migrants have largely been from Eastern Europe or other EU countries.
For trade unionists, there is a major problem in the arguments against migration and free movement of labour. Every time these arguments have gained ground, our movement has not been strengthened, it has been weakened. Our movement has been weakened because these arguments actually set worker against worker rather than directing our energies against those who really cause low wages – the bosses. In other words these arguments completely cut across the principles on which our movement is based, the principles of unity and solidarity.
We have no intention of passing judgement on which way readers may have voted in the EU referendum. Voters elected to ‘Remain’ or ‘Leave’ for all sorts of reasons. But it is a fact that there has been a spike in racist hate crimes since the referendum result was announced. Right wing elements have used the result to stir up hatred against ‘foreigners’. This weakens us all and sets working people against one another. It is completely unacceptable and must be resisted strongly by the working class movement. Our watchword must be ‘An injury to one is an injury to all’.
The Economy and Migration
It is clear to any trade union member in Britain today that workers have been suffering the effects of austerity. Real wages have fallen, pensions for millions have been attacked and public service jobs have been destroyed by the hundreds of thousands. It is also the case that there are large numbers of migrant workers in the UK. But in looking at what we should call for we have to consider the issue of causation; what causes a particular thing to happen. This issue lies at the heart of the claims of the Brexiteers that immigration causes low wages. Therefore we need to consider the general economic background to migration as well as look at what has actually happened in the UK economy in recent years.
Watching the TV news or listening to most politicians would create the impression that ‘the economy’ exists in order to create jobs and improve living standards. It truth the key driving force in the capitalist economy amounts to one thing: profit. Investors engage in the production of goods and services in order to return the maximum profit. It is this need for profit on the part of firms and corporations which drives the entire economic process; investment, production and the sale of goods and services through the market.
The competitive process by which firms and corporations produce and sell their products is ruthless, chaotic and unplanned. The economy does not develop through smooth growth but with endless ups and down and fluctuations. Throughout the history of the modern capitalist economy there have been regular cycles of growth and recessions – and periodically there have been significant periods of economic downturn or depression, such as the one through which we have lived since 2007/8.
This chaotic market process provides the background to the history of migration. The economic process requires investment to provide raw materials, tools and factories. It also requires one further fundamental ‘input’ – it needs workers. Therefore alongside markets for goods and services, there is a market for labour. In the labour market workers are taken into employment and made unemployed. At times wages increase relatively fast. At other times wages are squeezed or even fall. At times the length of the working week has been reduced. At other times employers have been able to increase it.
Bosses, and the bosses’ system as a whole, do not know how many workers are needed at a particular time. All they know is that they need employees at hand when required. In other words they need an industrial reserve army. In the past they have picked labourers up from the farms as needed and then dumped them back when surplus to requirements. In the twenty-first century British capitalists can call on the international labour market, raiding lower wage economies as required. Of course for workers this creates a life of perpetual insecurity.
The chaotic, unplanned and cyclical nature of the economy means a permanent tendency exists for workers to be taken into particular industries or sectors of the economy and thrown out of employment elsewhere. These endless changes may be due to the strength or weakness of the economy at a particular time, to shifts in demand for products (for example the growth of the mobile phone market), or to technical change (e.g. a new production process needs fewer workers). This unevenness in the labour market means that there is a constant movement of workers; in and out of work and between industries. The economy declines and workers are laid off. At other times labour shortages arise and employers seek to fill the gaps. Migration is one of the ways in which such gaps are filled.
Ever since the modern industrial economy emerged, there has been an endless process of migration. This has included a huge shift from the countryside to the towns and cities. Workers have migrated within countries and between countries, largely in response to the demand of the labour market in the receiving country.
This brings us back to the issue of causation; what causes what? It is the drive for profit which creates employment, but which also creates unemployment. It creates a labour market which experiences fluctuations like every other market. Sometimes this means workers have been able to win improvements in wages and conditions and at other times (particularly during periods of recession and depression) wages and conditions are attacked. This process takes place regardless of migration. The cause of attacks on wages is not migration but rather originates in the profit-driven basis of the economy and the regular cycles of growth and recession which result from this process. If the labour movement does not analyse these issues accurately, we will end up aiming at the wrong target.
It is in the interests of employers, and of those who defend the system outlined above, to create divisions among workers. Employers and their political representatives have long realised that the greatest threat they might face is from a united and well organised working class movement – especially if such a movement could recognise and begin to address the fundamental causes of poverty, unemployment and inequality. As a result there have been regular campaigns against immigrants and against migrant workers. It’s called ‘divide and rule.’ It is well known as a strategy and it has a long history. What is alarming is that some within our own movement do not understand it; to the degree that they repeat arguments which originate with those who seek to divide our movement. This is a slippery and dangerous road.
Making the Labour Market Work for us: a Programme for a Corbyn-Led Labour Government
We know that the power of workers and trade unions, their natural representatives and defence in the workplace, have been tremendously weakened in recent decades. How can we reverse that process? How can we stop bosses using migrant labour to further undermine standards at work?
This process of weakening of the trade unions has significantly shifted the balance of power in the workplace from workers to their bosses. This has been assisted by various political and trends.
• Deindustrialisation: the destruction of traditionally well organised industries such as mining, steel making and manufacturing has played a significant role in the decline in the numbers of workers in trade unions. Total numbers have declined from about 13 million in 1979 to 6.4 million in 2014.
• Legal and political attacks on trade unions: the Thatcher government launched a huge legal attack on the rights of workers and their unions. This was backed up with specific attacks on targeted sections of the labour movement – most notably the miners in 1984/85.
• Capitalist globalisation: In the years immediately after the Second World War, capital could not move freely around the globe. The nation state tried to control capital in the country in which it was based. For instance most countries had exchange controls, which limited the ability of firms to export capital. Margaret Thatcher was the first to abolish exchange controls in 1979, thus signalling a world where capital dictated what it wanted to national governments. Other countries quickly followed suit. Capital became increasingly footloose and fancy free. This process is often called globalisation.
Firms could move operations from where workers were well organised and wages were relatively high to places where workers were defenceless and wages were low. Globalisation thus boosted the power of the bosses over working class people.
• Deregulation: After the Second World War capitalist economies were subject to quite extensive state controls. This was a natural result of a war economy. Because of the devastation of war, the state had to step in and nationalise some basic industries, not only in Britain but all over Western Europe. Privately owned businesses were heavily regulated. Naturally capital chafed at these regulations, which restricted firms’ ability to make profits. Under big business pressure widespread deregulation took place in the economy.
Publicly owned firms were handed to private owners, regulations were scrapped wholesale and a widespread outsourcing of work took place. All this weakened the power of trade unions and organised labour, as it was intended to do. Margaret Thatcher and Ronald Reagan were prominent in advancing this trend, which was an important aspect of the neoliberal agenda.
Let us be clear: working people, including migrants, have every right to do what is best for themselves and their families. They are entitled to move to better their conditions. We would do the same. We oppose immigration controls and say: ‘Migrant workers are welcome here, but they must get the rate for the job.’
What is the rate for the job? That is the problem. In 1980, when trade union membership peaked in this country, more than 80% of workers were covered by sectoral collective bargaining. That meant that if you worked in the building industry as a plasterer, bricklayer or electrician you received a recognised hourly pay rate wherever you worked. Now less than 20% of workers are covered by sectoral collective bargaining agreements. With the decline in trade union density (because of the endless assaults on union rights) most contracts of employment, if they are not just imposed unilaterally by employers, are agreed at a workplace rather than industry-wide level.
This provides bosses with an opportunity to embark on a race to the bottom. They feel that, if they cut wages lower than their rivals in the industry, they will gain a competitive advantage and be able to sell cheaper. Now this shows that business people can’t see further than their own noses, but it is a natural reaction to the anarchy that exists in the wages market. If sectoral collective bargaining were restored, then that incentive on employers to continuously cut wages would largely be eliminated. We would still have plant level bargaining to deal with local conditions, but only as the icing on the cake.
How do we achieve this? The ‘Institute of Employment Rights’ (IER) has recently produced ‘A Manifesto for Labour Law’ , which has been broadly endorsed by Shadow Chancellor John McDonnell and is likely to be the core of a new deal for workers in a Corbyn-led Labour government. The Manifesto is very wide-ranging and we shall only take up a few of its proposals here.
The IER proposes:
• A Ministry of Labour. The Ministry would be responsible, among other things, for establishing a National Economic Forum (NEF).
• The NEF in turn would set up Sectoral Employment Commissions. They would set up negotiations between employers and the trade unions to negotiate the rate for the job in the relevant industry.
• In addition the IER proposes a Labour Inspectorate and a Labour Court made up of the present Employment Tribunals, the Central Arbitration Council and the Certification Office.
In short, shorn of the institutional details, the IER proposes a return to the ‘corporatist’ structure of industrial relations which has been progressively torn up in the ‘neoliberal era’ since 1979. The corporatist era was institutionalised during the First World War. The structure included a number of councils, often called Whitley Councils, to sort out disagreements between labour and capital through negotiation without open industrial conflict.
It included a series of Wages Councils, which gave minimal protection to the lowest paid and most insecure workers. The Agricultural Wages Board for England and Wales was abolished by the Tory-led government in 2013 in a vindictive move even Thatcher had been unable to achieve. Perhaps the Tories should be reminded that Winston Churchill was one of the instigators of the Wages Councils system.
The Contract of Employment
What are the main features of the modern labour market that we have to reform? How shall we achieve it?
There are three main categories of people in the labour market, according to English law. These are workers, employees and the self-employed. All have different rights, and different periods when these rights start to kick in. Naturally unscrupulous lawyers have used these loopholes on behalf of the bosses to deny workers justice. We accept that there are a small number of independent contractors who enjoy their status as self-employed. Others need flexibility in hours worked, for instance if they are engaged in full time study. But, for most, this is a slippery slope into insecurity and poverty. We want all three categories to enjoy the same rights, and to be entitled to them from day one.
Ian Mearns’ ‘Zero Hours Contract Bill 2014’ was not passed in Parliament, but it points a way forward. It provides that a “worker is a person who is employed” and “a person is employed for the purposes of this Act if he or she is engaged by another to provide labour and is not genuinely operating a business on his or her own account.” These definitions should provide protection for those categories of workers that the law currently deprives of their rights.
Let us be clear. Casualisation, and the brutalisation of the UK workforce it causes, does not just happen by chance. It is organised. We need a transformation in the labour market so that working class people can benefit from the ever-increasing wealth they produce.
That is why we need a Labour government that fights for working people to turn around the balance of power at the workplace and in industry. We need legislation to protect workers’ rights.
The English common law has never accorded positive rights to trade unions, as the representatives of workers. At most it has grudgingly allowed ‘immunities’, for instance by admitting that an invitation to workers to strike is not actually “a breach of their contract of employment” which is “unlawful” and invites dismissal. Even these immunities are constantly under threat from hostile legislation and judge-made law.
Though English contract law regards the contract of employment as an agreement between equals, the reality is quite otherwise. It conceals a profoundly unequal relation of one person over another. The classic statement on this is as follows:
“This sphere that we are deserting, within whose boundaries the sale and purchase of labour-power goes on, is in fact a very Eden of the innate rights of man. There alone rule Freedom, Equality, Property and Bentham. Freedom, because both buyer and seller of a commodity, say of labour-power, are constrained only by their own free will. They contract as free agents, and the agreement they come to, is but the form in which they give legal expression to their common will. Equality, because each enters into relation with the other, as with a simple owner of commodities, and they exchange equivalent for equivalent….
On leaving this sphere of simple circulation or of exchange of commodities, which furnishes the ‘Common or Garden Free-trader’ with his views and ideas, and with the standard by which he judges a society based on capital and wages, we think we can perceive a change in the physiognomy of our dramatis personae. He, who before was the money-owner, now strides in front as capitalist; the possessor of labour-power follows as his labourer. The one with an air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but — a hiding.”
(Marx, Capital Volume I, p.280, Penguin 1976)
The Worst Abuses we Need to Correct
Zero Hours Contracts (ZHCs): There are currently 1.8 million ZHC contracts, and 800,000 workers covered by them. (Some workers are on more than one ZHC.) The number of these contracts has doubled over the past five years. Most workers in Wetherspoon pubs, in McDonalds and at Sports Direct are currently on zero hours contracts, though there has recently been a movement of revulsion against them. In particular the campaign against Sports Direct has drawn attention to the abuses inherent in the system.
ZHCs were given a big impetus by the Great recession of 2008. As reported by the ‘2011Workplace Employment Relations Study’ quoted earlier:
“There was also a doubling in the percentage of workplaces that had some employees on zero hours contracts2 between 2004 and 2011 (from 4% to 8%), though incidence remained low. There were increases in the use of zero hours contracts in larger workplaces. In 2004, 11% of workplaces with 100 or more employees used zero hours contracts, increasing to 21% in 2011.”
As the name of the contract implies, the employee is not entitled to any guaranteed hours of work. In this situation the worker is completely insecure, unable to contemplate putting down a mortgage on a house, or even a car, and in many cases not sure where their next meal is coming from in future weeks. Moreover, because they don’t have defined terms of employment they may not be entitled to holiday pay, petition entitlement etc. This is a job with no future!
Labour MP Ian Mearns introduced a Private Member’s Bill in 2014 (Zero Hours Contract Bill 2014) to introduce a guarantee of minimum hours and rights that other workers are entitled to for ZHC workers. The provisions in this Bill could provide the basis of a legislative safeguard for these super-exploited workers.
Zero hours contracts can be stopped. They have already been made illegal in New Zealand.
Self-Employed Workers: There are now officially 4.6 million workers who are regarded as self-employed in Britain. In the first quarter of 2016, 9 in 10 new jobs taken on counted as self-employed. On average the self-employed earn £207 per week, only half what those in employment get.
We regard much of this ‘self-employment’ as bogus. To give one example, employees for the ‘gig’ (electronic platform) firm CitySprint have to clock in and wear uniforms. They don’t feel self-employed! Yet they are deprived of the rights other workers are entitled to.
Bogus self-employment has been deliberately used to reduce workers’ wages and conditions. Nowhere is this clearer than in the construction industry. After the Second World War there was an urgent need for housebuilding. As a result construction workers’ skills were in demand and employment boomed. Trade unions in the industry managed to achieve organisation rates of 40-45% among building workers. Strike days lost in construction went from a low of 24,000 in 1946 to 233,000 in 1954. On some well-organised building sites, shop stewards were able to impose a closed shop.
The employers responded by demanding that workers sign up to Labour Only Sub-Contracting , the ‘lump’. Rather than being directly employed by the building firm, workers were signed up to the main contractor or a sub-contractor. This was a legal fiction. Building workers still had to clock in and take instruction from the construction firm.
From 1965 to 1970 the number of construction workers on the lump went up from 160,000-200,000 to 400,000 and trade union density in the industry fell. The safety record on building sites worsened as a direct result of the rise in workers on the lump.
For decades conditions for workers in construction were regarded as unusually casual and dangerous. It was a ‘cowboy’ industry. Now it has become a template used by employers to impose insecure and ill-paid employment on workers everywhere. (from T. Austrin - The ‘Lump’ in the UK Construction Industry, in T. Nichols (ed) - Capital and Labour: Studies in the Capitalist Labour Process)
The growth of self-employment, for instance among mini-cab drivers, seems to have grown because of the dearth of proper, secure jobs out there. Since 2008 in particular many workers have lost jobs they regarded as secure and have had to scuffle round to make a living as best they could, such as mini-cab driving.
There is a particular problem with electronic platforms (sometimes called ‘gig’ firms) such as Uber. These link customers and providers, who are not regarded as employees of Uber. As one self-employed person commented, “We still do have a boss. It just isn’t a person. It’s an algorithm.”
Electronic platforms such as Uber and CitySprint have enormous power over their operatives, since they are the ones who put them in contact with customers. They can threaten their workers with exclusion from the electronic platform, thus depriving them of their livelihood. Using this leverage they are able to progressively reduce the rates of pay of workers. Deliveroo, which uses cyclists to deliver meals from restaurants, is just the most recent example of ‘platform capitalism’ striving to drive down rates below the minimum wage and getting protests and unofficial strikes from their operatives as a result. In August 2016 Deliveroo were beaten back, but the pressure remains to push to continually ratchet down rates in favour of profit.
It is ironic that a genuine technological advance allowing us to match users with those who can provide a service to them is being used as a vehicle for super-exploitation.
Uber does not feel the need to provide its drivers with the rights most workers are entitled to because they are supposed to be self-employed. Uber is also able to dodge the regulations imposed on other cab operators by local authorities for perfectly understandable reasons. For instance Uber feels no need to provide for disabled passengers, as regular taxi companies are obliged to do. No doubt they regard this as a ‘burden’ on their activities. Likewise Uber, along with other electronic platform companies, is a notorious tax dodger.
We will change the law to give the bogus self-employed the same rights as other workers.
Agency Workers: There are between ½ million and 1½ million agency workers in Britain today. Gangmasters involved in notoriously low paid occupations such as food and drink processing and packaging, agriculture and shellfish gathering are a category of agency labour. The problem for agency workers, in terms of English law, is that their contract of employment is with the agency, not with the firm where they are actually working.
For instance, in a 1983 case O’Kelly v Trusthouse Forte, agency workers employed at the Grosvenor House Hotel were unable to claim for unfair dismissal when they were dismissed for trying to join a trade union. The court explained that they lacked the “mutuality of obligation” with the firm where they were working because they were actually in a contract with the agency. This judgement provided carte blanche for the dismissal of agency workers.
In addition Dave Smith of the Blacklist Support Group has been unable to seek a remedy against Carillion which blacklisted him from the construction industry because the blacklist was technically reported to the agency that he was “no longer required”, not to the place which actually denied him a job. This is pedantic rubbish, which has allowed employers to commit crimes against workers and ruin their lives for the sake of greed.
Sports Direct workers are not just on zero hours contacts; most of those employed at their Shirebrook headquarters are hired from two agencies – Transline and Best Connections.
Sports Direct used this combination of zero hours contracts and agency work to impose a regime of fear described by a Parliamentary Select Committee as ‘Victorian’. It seems one female worker was driven to give birth in the toilet for fear of losing her post. Billionaire owner Mike Ashley admitted before Parliament that his firm was illegally paying below the minimum wage. Workers were searched after their shift in case of theft. These searches can be quite intrusive and last on average 15 minutes – unpaid. Workers are fined 15 minutes loss of pay if they arrive one minute late to clock on.
Agency workers should be offered the same protection as other workers.
Other Reforms Needed
There has been a big decline in the number of workers organised in trade unions over recent years. In 1979 there were about 13 million workers unionised; now it is about half that number. As we have seen there has been a similar fall in the numbers covered by sectoral collective bargaining agreements. In 2015 there were only 170,000 days lost to strikes. This is the second lowest level since 1891, when records began. Compare this with the 11.3 million work days lost to stress and depression last year, often work-related.
This decline in strike days lost is no accident. It coincides with what is often called the ‘neoliberal era’. From 1979 Margaret Thatcher’s governments waged a systematic war on organised labour in the interests of capital. Her governments passed law after law to restrict union activity. They followed the maxim that effective trade union activity should be made illegal. None of these anti-union laws were repealed in the 13 years that New Labour governed. Tony Blair boasted that British labour law is, “the most restrictive on trade unions in the western world.”
The present government has intensified the one-sided war on the unions with the Trade Union Act 2016. Balloting for strike action is already ridiculously complex. The new Act demands in addition a threshold turnout of 50% to make as strike ballot valid. Very few of our MPs would be elected to Parliament if such a threshold were imposed on Parliamentary elections.
The anti-union laws must be abolished completely and replaced by a law protecting the rights and freedoms of trade unions and their members.
Apart from anti-union laws the unions have been hamstrung by mass unemployment. The period after the Second World War up to 1974 was characterised by virtually full employment in Britain. This gave favourable bargaining conditions to organised labour. Workers’ living standards rose steadily year on year. By contrast the ‘neoliberal era’ after 1979 was one with long periods of mass unemployment, in part deliberately used by the Tories and the bosses to weaken the unions and boost profits at the expense of wages.
The long term decline in the number of trade union members and the legal framework which has weakened the protections of trade unionists has inevitably affected the state of unions on the ground. Trade unions were built by workers organising together in the workplace. But the past thirty years has also seen a decline in the numbers and influence of shop steward and other workplace union reps.
The starting point for re-building our unions and improving wages and conditions at work must include a detailed assessment of the setbacks we have been through. It must also include a sober and serious assessment of the real position facing workers today. Workers are not ‘social partners’ with their employers. Instead workers need independent organisations which understand the brutal realities of work in the 21st century. Trade unions cannot simply involve powerful structures at national level. Mass trade unionism was built from the bottom up and the re-building which is necessary today needs to be done in the same way – starting with the re-building of our shop stewards and workplace organisation.
Jeremy Corbyn has promised that, as Prime Minister, he will abolish the anti-union laws. This is welcome, but not enough. The proposals for a Ministry of Labour and the restoration of sectoral collective bargaining with unions playing a key negotiating role should serve to shift the balance of power on the shop floor towards labour. For too long the bosses have had the whip hand.
We have seen that the common law is not an adequate protection for working people. In Britain there has never been a definitive right to strike. Yet the right to strike is recognised as a precious democratic right, enshrined in the constitution of many countries. It is also a feature of international agreements and treaties, such as those of the International Labour Organization, to which Britain is a signatory. Rather than relying on common law ‘immunities’ and the eccentric way these can be interpreted in the courts we need a clear, positive statement . There is such a provision advocated by the Trades Union Congress and John McDonnell for many years: it provides the basis of such a legal protection.
It is the Trade Union Rights and Freedoms Bill It makes the following main provisions:
• Workers involved in lawful industrial action should be legally protected.
The IER in their Manifesto has established criteria to define what is ‘lawful industrial action’.
• Notice of industrial action should be for 7 days only.
• Complicated rules on balloting should be scrapped.
The rules on strike balloting and the notice period required were deliberately designed to make industrial action as difficult as possible and provided a happy hunting ground for lawyers.
• The ban on supportive action should be loosened.
The anti-union laws define all industrial conducted against a firm that does not directly employ the workforce as ‘secondary picketing’ and therefore unlawful. In view of the prevalence of outsourcing and subcontracting in industry, this ban should be reviewed
• Agencies should not have the right to send workers in to scab on a lawful industrial dispute.
Trade Union Action
It is quite right for workers to call for protection by the law. For far too long the law has been used to advance the interests of the bosses at the expense of workers. But ultimately the labour movement will never be adequately protected unless working people defend their own interests through trade union action.
This is happening. In July 2016 Nico Industrial Services provided people to work at the Fawley Oil Refinery in Hampshire. The workers they supplied, mainly Italians and Bulgarians, were being paid just £48 per day. Workers already on site realised that the rate for the job was £125 a day. As a result 24 hour strikes were called and an overtime ban implemented. The strikers are not against bosses employing ‘foreigners’. They are against them being used to cut wages and conditions. These workers deserve the rate for the job. This was an inspiring act of international solidarity and the way forward to defeat the attempts of employers to drive down wage levels by recruiting migrant labour.
Some similar issues arose during the strikes at Lindsey Oil refinery and elsewhere in the engineering construction industry in 2009. The Lindsey dispute involved the award of a construction contract to an Italian firm IREM which employed mainly Italian and Portuguese labour at lower rates of pay. This posed a potential threat to existing national agreements (NAECI) within the sector. There were immediate attempts by sections of the press to turn the dispute into one about ‘British jobs for British workers’. The battle was actually over ‘the rate for the job’.
The media and elements of the far right attempted to gain influence among the workers but were not successful. The shop stewards’ committee, grappling with very difficult issues, developed the following demands:
• No victimisation of workers taking solidarity action.
• All workers in UK to be covered by NAECI Agreement (the National Agreement for the Engineering Construction Industry)
• Union controlled registering of unemployed and locally skilled union members
• Government and employer investment in proper training / apprenticeships for new generation of construction workers
• Migrant workers to be unionised.
• Trade Union assistance for immigrant workers - via interpreters - to give right of access to Trade Union advice - to promote active integrated Trade Union membership
The Lindsey dispute could have been the start of a very nasty and divisive period in our movement. Fortunately, and thanks to the exemplary leadership of the shop stewards on the ground, this did not happen. The conduct of this dispute shows the way forward.
Company Law Reform: Not only is labour law heavily skewed against the working class, British company law also defends the unfettered right of owners to run their firms how they please, ignoring the interests of the workforce, company pensioners and any other consideration. This must stop.
A classic example of the consequences of British company law is what happened at BHS. This sorry tale begins in 2000 when Philip Green bought the chain of shops for £200 million. Green and his wife Tina, who conveniently lives in the tax haven Monaco, were the majority shareholders. They owned the chain lock, stock and barrel. Over the next fifteen years they systematically divested the firm of £586m in dividends and rent that they paid themselves. After sucking BHS dry they sold it on to Dominic Chappell, a man who had been declared bankrupt three times. The firm’s ruin was complete. The livelihood of 11,000 innocent workers has been destroyed. The fate of 20,000 company pensioners lies in the balance.
The point is that all of this was completely legal! It should not be. The rights of workers, of company pensioners and that of other interest groups or stakeholders, such as consumers and the environment, must take precedence over private greed. In order for that to happen, company law must be reformed.
Employment Tribunals: There has been a collapse in the number of cases referred to Employment Tribunals since 2013. Employment Tribunals are a relatively fair way of settling industrial disputes. Traditionally they have a tripartite structure with representatives from trade unions and employers with an ‘independent’ chair, usually a lawyer.
In 2013 stonking fees were introduced, such as £1,200 for a claim of unfair dismissal. No wonder Employment Tribunals no longer work. Obviously workers unrepresented by a trade union cannot afford the fees, and fewer workers have union representation at work. The imposition of these fees is a vindictive attack on workers’ rights. This is justice denied. The next Labour government must reverse the measure.
Blacklisting: In 2009 the Information Commissioners raided the offices of The Consulting Association. They found irrefutable evidence of industrial-scale blacklisting. In fact this had been known about for a long time but there was no hard evidence to hand till then. Construction firms, in cahoots with the police and security services, had deprived workers of employment for decades, on the grounds - often spurious - that they were ‘militants’. The blacklisters ruined people’s lives in the process. It is quite clear that the existing law on blacklisting is inadequate. It should be treated as a crime, with the sanction of imprisonment where appropriate.
The Minimum Wage: The present minimum wage is not a wage that people can live on, certainly not a wage that workers can bring up a family on. The present rate for workers over 25 is £7.20, £6.60 for 21 to 24 year-olds and £5.30 for those who are 18 to 20. The Tory government itself has admitted this is inadequate. The living wage they introduced is £8.25 per hour and £9.40 in London, but only for workers over 25; 22% of workers are below that level. We need a minimum wage of £10 per hour.
In addition to the miserly level at which the minimum wage is set, it is not adequately enforced. The minimum wage is supposed to be policed by Her Majesty’s Revenue and Customs (HMRC), which has seen drastic cuts in the number of workers employed. It has been estimated that HMRC staff could only visit workplaces once every 250 years to check that the minimum wage has been implemented. Grotesquely HMRC in Liverpool has been facing industrial action from its cleaners, who are not being paid the minimum wage because they are hired from an agency!
One huge advantage of a living minimum wage is that it stops the rest of us in effect subsidising super-exploiting employers. At present the taxpayer bill for in-work benefits is £11 billion per year according to a survey by Citizens UK in 2015. In the New Labour years Gordon Brown extended a whole range of benefits and tax credits, making them available to low-paid workers. Their families have become dependent upon these tax credits and benefits to rub away the sharpest edge of poverty and insecurity. We can’t just take these benefits away. But employers have also used these benefits as an excuse to pay poverty wages. This must stop. Why should we have to subsidise greedy bosses?
Our Programme of Employment Rights for a Corbyn-Led Labour Government
• End austerity now. We need a massive public investment programme.
• Establish the rate for the job. Bring back sectoral collective bargaining.
• Abolish zero hours contracts. Give workers security.
• Give the bogus self-employed the same rights as other workers.
• Protect agency workers.
• Abolish the anti-union laws. A charter of rights for trade unions.
• Cut back the bosses’ unfettered rights over companies. Enfranchise employees, consumers and environmental protection as stakeholders in the company.
• Bring back free access to Employment Tribunals.
• Make blacklisting a crime. Treat blacklisters as criminals.
• For a minimum wage of £10 per hour.
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