Fightback Newsletter – August ’13

By Richard Lynch

It’s time to put an end to low pay

British workers are now in the sixth year of a savage squeeze on pay which has cut wages by 9% since early 2008 and by 5.5% since the Coalition came to power in mid-2010. This squeeze, at a time when business leaders and the ultra-rich have never had it so good, is the deepest and longest since the 1870s and, despite talk of the economy beginning to recover, is showing no sign of coming to an end.

This is demonstrated by the latest figures from the Office for National Statistics which show pay increasing by a mere 1% (or 1.1% if bonuses are taken into account) at a time when RPI inflation is 3.1% and CPI inflation 2.8%. Pay settlement figures from organisations like Income Data Services, Labour Research Department and XpertHR are a bit better and show pay increases, where they occur, running at 2-2.5%. However this is still below inflation and there are millions of workers who are getting no increases or who are having their pay cut.

This was shown by a recent survey from the Chartered Institute of Personnel and Development which found that only 28% of workers had received a pay increase in the first half of this year, by far the busiest period for pay reviews, while 67% had received no increase and 5% had their pay cut. Such cuts are becoming increasingly common due to outsourcing, with some employers taking full advantage of the Economic, Technical and Organisational (ETO) provisions of the TUPE regulations to reduce pay by thousands of pounds a year during transfers.

The effects of all this are highlighted in Low Pay Britain 2013, an excellent report from the Resolution Foundation, which shows that:

• 5.1 million workers (21% of the total workforce) earn less than two thirds of gross median hourly pay and, in according with internationally accepted definitions, are low paid. (The low pay threshold used by the Foundation is £7.44 an hour, or £13,350 a year for a 35-hour working week.)

• 500,000 (2% of the total) earn less than half of gross median hourly pay (£5.58 an hour) and suffer from extreme low pay. (The numbers in this category would be much higher if it were not for the National Minimum Wage, the adult rate for which is higher than £5.58 an hour.)

• 4.8 million workers (20% of the total) earn less than the Living Wage for their area (currently £8.55 in London and £7.45 elsewhere).

But this is only part of the story, as certain categories of worker, and workers in certain occupational groups, are disproportionally affected by low pay. For example:

• 3.1 million women workers are low paid.

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• 1 million workers aged 16-20 are low paid, as are 900,000 21-25 year olds.

• 200,000 workers aged 61-65 are low paid, as are 100,000 of those aged 66 and above.

• 2.9 million part-time workers are low paid.

• 33% of workers on temporary contracts are low paid.

• 800,000 workers in hotels and restaurants are low paid.

• 1.5 million workers in wholesale and retail occupations are low paid.

• 800,000 workers in personal services are low paid.

According to the Resolution Foundation, low pay is overwhelmingly a private sector problem, with 4.3 million sector workers low paid and accounting for 85% of all low-paid workers. And according to the TUC, the problem is getting worse, with almost half of all new jobs low paid. The Labour Party puts the figure for this group even higher, at 60%, and says that wages for workers on zero-hours contracts are typically 40% lower than those for workers on normal employment contracts. In addition, figures collected by the House of Commons Library, at the request of the Labour Party, show that the decline in real wages over the past three years in the UK has been the fourth worst in Europe, with only Greek, Portuguese and Dutch workers suffering a steeper decline.

But what can be done about it? Well the main political parties, aware that it is party conference season and that the next general election is not that far away, have begun to float ideas about increasing the National Minimum Wage and encouraging more employers to pay the living wage – with those employers getting tax breaks and other sweeteners so that their profits are not affected. Anything which gets people out of the low-pay trap would, of course, be welcome but what credence can we give to such talk from parties which have helped create the problem in the first place? And should we be putting our faith in ‘condescending saviours’ when we could be using our own power and organisation to campaign for a real and permanent increase in pay and for a dramatic reduction in income inequality?

We need a serious national campaign for fair pay and that campaign will need to give a high priority to driving up the National Minimum Wage and ensuring that all employers pay it. NMW rates will be going up from 1 October but only by 12p an hour to £6.31 for workers aged 21 and over. The rates are also going up for younger workers but only by 5p an hour to £5.03 for those aged 18-20 and 4p an hour to £3.72 for under 18s. These token increases have contributed to a 10-12% reduction in the value of the NMW since the start of the recession and mean that its real value is now little more than it was 10 years ago. However if it had risen at the same rate as the pay of FTSE 100 directors in the period since its introduction in 1999, it would now be £19 an hour (according to reported calculations by One Society).

And any campaign on the National Minimum Wage will also need to take on the thousands of employers who are not even paying it and who, by and large, are getting away with this breaching of the law. This will mean doing more to make workers aware of their rights under minimum wage legislation (detailed in www.nidirect.gov.uk), naming (and shaming?) under-payers, reporting them to the Pay and Work Rights Helpline (0800 917 2368) and, above all, helping affected workers to get organised and to fight for real pay increases.

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Any campaign for fair pay will also need to step up the fight for more workers to receive the Living Wage, which shows the minimum necessary to pay for the basics of life. The Living Wage is currently calculated at £7.45 an hour, and £8.55 an hour in London, and campaigning has led to it being secured for an estimated 40,000 additional workers in the past few years. But even this is a drop in the ocean compared to the 4.8 million workers who are not even paid that modest amount. Again, this means organising to get that large group of workers up to a semi-decent level of income, which employers could well afford.

The campaign will need to step up the fight in companies and organisations where unions are recognised as well. Throughout the recession, many millions of workers have accepted wage restraint in an attempt to protect jobs, but the result has been that we have become poorer whilst most employers have secured almost unprecedented levels of personal and corporate wealth. Whilst fighting for reasonable pay increases is not easy in many organised companies and organisations, particularly when some workers are still falling for the lie about Britain being broke, the time has now come to mobilise for a real breakthrough in pay in all parts of the country.

Many years ago, working people invented something to lift them out of poverty, to secure a fair price for their labour and to ensure that they and their families could have a reasonable standard of living. That something was the trade union movement, which began in the skilled crafts, expanded into areas of more general manual work and then into white collar occupations, and dramatically improved the lot of workers in each of those groups.

But in the last 30 years, union membership has fallen to just under six million and there are now whole areas of the economy, including wholesale, retail, catering, caring, security, business services and other occupational areas, where there are low levels of union membership and organisation and only limited collective bargaining. These are the kinds of area which are blighted by low pay and poor working conditions and we are not doing anything like enough to raise the union profile amongst their workers and to recruit and organise them.

A large-scale national co-ordinated campaign for fair pay could help do that, and could do much to end low pay and income inequality in what is still one of the very richest countries in the world. Isn’t it time we stopped agonising and started organising such a campaign?

A brief introduction to settlement agreements

Settlement agreements are legally binding contracts which can be used to end employment relationships or to settle employment disputes, on agreed terms. Entering into such an agreement is voluntary but, once finalised, both employer and employee will be bound by its terms and future reference to an employment tribunal will usually be ruled out.

Settlement agreements came into being with the passage of the Enterprise and Regulatory Reform Act on 29 July 2013 and are effectively a re-branding of the old-style compromise agreements. They also work in much the same way as compromise agreements and include a requirement for the employee to get independent advice (usually union or legal) before signing the agreement. However there are some differences between the agreements:

For example, settlement agreements can be used to discuss a mutually-agreed termination of employment when there isn’t an on-going dispute between the employer and employee, or even when one party wasn’t even aware that there was a problem with the employment relationship. Such discussions are usually not admissible as evidence in a tribunal.

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However, this latter rule applies to unfair dismissal only and it will be possible to advise a tribunal if the issue involves a dismissal which may be automatically unfair (such as on grounds of whistleblowing or dismissal for union membership or for asserting a statutory right). Claims involving discrimination, harassment, victimisation, breach of contract and wrongful dismissal also carry no restriction and allow settlement agreement discussions to be used in evidence at tribunal.

Improper behaviour by an employer during discussions can also be advised to an employment tribunal if a claim is being pursued and may be admissible as evidence if the tribunal considers it ‘just’ to allow it. Improper behaviour includes harassment, bullying and intimidation, and discrimination on the grounds of age, disability, marriage or civil partnership, pregnancy or maternity, race, religion or belief, sex or transgender.

ACAS has produced two useful booklets to explain the use of settlement agreements. One is its Code of Practice on Settlement Agreements (which, amongst other things, advises that employees involved in agreement discussions be allowed to involve a work colleague, union rep or union official as a companion). The second is a more detailed booklet, entitled Settlement Agreements: a Guide, which gives a more comprehensive explanation of the agreement process. Both can be downloaded from the ACAS website (www.acas.org.uk) by searching for settlement agreements in the site’s A-Z of Work section.

As with compromise agreements, workers are advised to involve their union if approached about a settlement agreement. Such an agreement may or may not be in your interests and it is best to get advice from somebody who is on your side, rather than relying on advice from an employer who is possibly interested only in kicking you out in the least bothersome way possible.

Small fall in inflation

There has been a small fall in inflation, according to the latest ONS statistics, but prices are still rising faster in the UK than in almost all other European countries. The figures for the year to end July 2013 (and for the year to end June) show the following:

Retail Prices Index (RPI) – 3.1% (3.3%)

RPI excluding mortgage interest (RPIX) – 3.2% (3.3%)

Consumer Prices Index (CPI) – 2.8% (2.9%)

The new experimental statistics which are based on the RPI and CPI, and which are likely to become fully-recognised national statistics at the end of the year, also fell. The RPIJ fell from 2.7% in June to 2.6% in July and the CPIH (which, unlike the CPI, takes account of housing costs) fell from 2.7% to 2.5% over the same period.

The largest contribution to the reduction in the CPI figure came from air fares, which fell significantly from the previous month, and from the discounting of clothing and footwear in the July sales. Other price increases which stood out over the year included bread and cereals (4.6%), meat (4.9%), fruit (10.2%), vegetables (5.3%), sewage collection (5.9%), electricity (8.1%), gas (8.3%), books (4.6%), newspapers and periodicals (5.6%) and education (19.7%).

Rail fares rose by 4.5% over the year and are likely to rise by a further 4.1% on average in January 2014, due to the government formula which allows regulated fares to be increased by 1% above the July RPI rate.

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The UK CPI of 2.8% is now the fourth highest in the European Union (after Estonia, Romania and the Netherlands) and compares badly to Euro area inflation (1.6%) and EU inflation (1.7%). It also compares badly to inflation in Switzerland (0.5%), Japan (0.7%), France (1.2%), Italy (1.2%), Germany (1.9%), Spain (1.9%), the USA (2%) and China (2.7%).

Note: Inflation figures for the year to end August 2013 will be published by the Office for National Statistics on 17 September 2013 and will be available for download from www.statistics.gov.uk.

The unemployment picture is still bleak

The latest Labour Market Statistics showed a small increase in employment and a small fall in unemployment over the three months to end June 2013. However the statistics also showed just how little progress is being made in bringing down overall unemployment, youth unemployment and long-term unemployment.

On the positive side, the number of people in employment increased by 69,000 to 29.78 million over the quarter. This pushed the employment rate up 0.1% to 71.5%, but this figure and the overall number of people in employment still remain below pre-recession levels. In addition, recent TUC research has shown that almost half of all new jobs are in temporary, fixed-term and low paid positions.

Unemployment fell by 4,000 to 2.514 million, leaving the unemployment rate unchanged at 7.8%. Unemployment has now fallen by 49,000 in the past year but is still higher than when the coalition came to power in 2010.

There was a more significant 29,000 reduction in the number of unemployed people claiming Jobseeker’s Allowance. This brought the claimant count down to 1.44 million, or 4.3% of the economically active population.

However there was an increase of 15,000 to 973,000 in the number of 16-24 year olds out of work and this pushed the youth unemployment rate up 0.7% to 21.4%. Continuing economic stagnation and employer’ reluctance to take on inexperienced workers was the main reason for this but, according to the Local Government Association, there has also been an 8% fall in the number of young people being admitted to national government job schemes in the past year.

Long-term unemployment also increased, with the number of people out of work for over a year up 7,000 to 909,000 over the three months to June 2013 and the number out of work for over two years up 10,000 to 474,000 over the same period.

Mark Carney, the new Governor of the Bank of England, helped put the spotlight on large-scale unemployment recently when he said that interest rates should remain at 0.5% until the unemployment rate fell from 7.8% to 7%. This is to be welcomed but, with an average of 4.7 people chasing every job vacancy, it could take until 2016 for this to happen.

Update: Unemployment fell by a further 24,000 to 2.49 million, and to 7.7% of the workforce, over the three months to end July 2013. Full details are available from the September Labour Market Statistics on the Office for National Statistics website (www.statistics.gov.uk).

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Union reps have a right to represent

Several years ago, I found out that some managers in a supposedly reputable company in Essex were allowing union reps to accompany members to disciplinary and grievance hearings but were not allowing them to speak. This nonsense got sorted out but I have since come across a number of managers in other companies trying to pull the same trick. In addition, I recently discovered that a major supermarket has a rule that employees attending disciplinary and grievance hearings have to present their own case and union reps are not allowed to do it for them. Even worse, I was told that the two main unions recognised by the supermarket in question had agreed to this restriction on what reps could do.

Of course there is nothing wrong with a union member presenting their own case if they are comfortable doing so, particularly if they have had a little guidance from their rep. However some members, who are unfamiliar with hearings and with case presentation, often prefer their more experienced rep to present their case for them. Yet others like to present part of their case themselves and their rep to present other parts. They should be allowed this choice and in fact they are, as Paragraph 16 of the ACAS Code of Practice on Disciplinary and Grievance Procedures states:

“The companion (rep) should be allowed to address the hearing to put and sum up the worker’s case, respond on behalf of the worker to any views expressed at the meeting and confer with the worker during the hearing. The companion does not, however, have the right to answer questions on the worker’s behalf, address the hearing if the worker does not wish it or prevent the employee from explaining their case.”

Any union rep who finds managers playing silly buggers over what they can and cannot do at hearings, is urged to download a copy of the Code of Practice, which has legal status, from the ACAS website (www.acas.org.uk/index.aspx?articleid=2174) and take it with you to hearings in case you need to explain to managers that they can’t just make up their own rules when dealing with staff. The more detailed ACAC Guide to Discipline and Grievance is also available from the website and is well worth a look.

Be like Dave and take your holidays

A survey on holidays by Adecco has found that a third of UK office workers fail to take their full holiday entitlement each year. According to the recruitment firm, the main reason given for this is that workers feel ‘guilty’ about asking for time off and don’t like leaving colleagues with extra work to do while they are away.

There may well be an element of truth in this but it seems likely that some workers are also put off asking for leave because of worries about job security or because they fear that their request may lead to an argument with managers who often complain about granting leave when a workplace is under pressure. Another reason is that a number of leave requests are actually turned down and workers may then find that the holiday year has ended before they have taken their full entitlement. Remember that there is no legal entitlement to carry holidays into the next holiday year unless this is allowed for in your contract or you were unable to take your holidays because of sickness. It is therefore important that you take all the days you are entitled to because if you don’t, you risk losing them.

There is no good reason why you should voluntarily give up any of your holiday entitlement and plenty of reasons why you should not.

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One reason you should not is that stress and depression are now amongst the main causes of long-term sickness and it will help you avoid such problems by getting away from it all and de-stressing during a well-earned break.

David Cameron understands this well and he has already taken four separate holidays since May. The first was in Ibiza, where he stayed in a seven bedroom £11,000 a week house. The second was a two week break in the Algarve in Portugal. The third was in the Scottish island of Jura, where his wife’s stepfather owns a 20,000 acre estate. And the most recent was in Cornwall, which he had to interrupt to lead a debate on bombing Syria in the House of Commons.

So take a tip from Dave, take all the holidays you can get and it’ll do you a power of good. Oh, and don’t come back to work early because you could end up feeling worse than if you’d never been away.

The importance of health and safety at work

The Health and Safety at Work Act, which was introduced almost 40 years ago, has been beneficial for working people and has done a tremendous amount to reduce injuries, deaths and work-related diseases in our workplaces. yet despite all the good it has done, it has become a target for David Cameron who has made killing off “Britain’s health and safety culture” one of the key aims of his government. As a result, regulation has been weakened, inspections have been reduced and funding has been cut for the Health & Safety Executive and local authorities, the main enforcement bodies under the Act.

In the face of these attacks, the role of union safety reps in keeping workplaces safe and healthy has become more important than ever. But even though there are an estimated 150,000 union safety reps in British workplaces, with around 10,000 more being trained by the TUC every year, there are still too many union-recognised workplaces which do not have such reps in place. This is partly the result of work pressure for existing union reps but it is also partly due to complacency and ignorance amongst some union reps and members as to what being a safety rep involves.

However all the main information you need to know about health and safety at work, including the basic legal framework, safety reps’ duties and rights, details of regulations relating to all aspects of the working environment, equipment at work, physical hazards and accidents and injuries, is now available in a new 208 page guide for union members and reps from the Labour Research Department. This guide, Health and Safety Law 2013, costs £20.50 but it is an invaluable tool for union reps and officials to use when negotiating with employers, and for anybody who is interested in ensuring that people are kept safe and healthy in the workplace.

This guide is highly recommended and you are urged to get a copy now from LRD, 78 Blackfriars Road, London SE1 8HF, by calling 020 7928 3649 or by ordering a copy on line at www.lrd.org.uk. It could be one of the best things you do this year.

Richard Lynch

14 September 2013

FBRL No 45 20130914

This entry was posted on September 16, 2013 at 15:47 and is filed under Culture of Resistance, Front page, The Movement. You can follow any responses to this entry through the RSS 2.0 feed.