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date: 10 March 2010

embargo: 00.01hrs Friday 12 March 2010

Fair Work coalition calls for reform of employment status to help end poverty

A new Fair Work coalition is coming together at the TUC in London today (Friday) to highlight the link between in work poverty and the ability of employers to use the gaps in the UK's complex employment status law to avoid basic statutory rights.

The Fair Work coalition, which includes faith groups, voluntary and community organisations and unions, is concerned that a lack of decent employment rights for some of the UK's most poorly paid workers is leaving thousands of people trapped in poverty at work.

In advance of the election, the coalition will push home the message to the main political parties that this forgotten underclass of workers can no longer be ignored, and will campaign for a change in employment status law to stop people in low-paid and insecure jobs being exploited.

The Fair Work coalition estimates that at least 500,000 low-paid people in the UK have a precarious status - with many thousands more at risk of real exploitation - and are being denied the most basic standards of job security and fair treatment due to loopholes in current employment law.

Such poor protection at work has wider consequences, the coalition believes, as those in insecure employment are far less likely to receive training and development opportunities and are more likely to be caught in the cycle between benefits and work, are more likely to have poor health and face poor working conditions.

Individuals who are classified by tribunal and courts as 'worker' and 'self-employed' have far fewer employment rights than 'employees'. As a result they can be consigned to persistent job insecurity and low pay at work.

Those who are 'workers' can legally lose their jobs with no notice, no protection from unfair dismissal and no redundancy pay - even if they have worked for the same employer for many years. They are also ineligible for family friendly rights such as rights to maternity, paternity, adoption and parental leave, and the right to request to work flexibly. For workers whose wages are already low, this means they have an even greater chance of being poor.

The law also permits unscrupulous employers to falsely classify their staff as 'self-employed'. This can mean that low paid workers such as hairdressers, couriers and some construction workers are at high risk of being paid less than the minimum wage, and are often denied access to paid holiday.

To launch the campaign the Fair Work coalition has produced a report Fair Work: Ending Poverty Through Decent Jobs which features case studies highlighting workers' experiences of exploitation because of their employment status. Coalition partners will also hold a seminar at TUC headquarters today. In recent years the campaign believes the UK has witnessed an increase in low paid, poor quality and insecure work, and the seminar will focus on ways to reverse this trend.

The Fair Work coalition believes that the Government needs to modernise the law on employment status to ensure that it accommodates the increasingly diverse and flexible forms of employment relationship.

TUC Deputy General Secretary Frances O'Grady said: 'Workers in temporary and insecure jobs are at high risk of in-work poverty. Many are trapped in low paid positions, with limited access to training making it difficult to progress onto better jobs. These workers also experience frequent spells out of work, resulting in the 'low-pay-no-pay cycle' and a higher risk of low pay in the future.

'Improving the quality of low-paid work and increasing the opportunities for low-paid workers is a complex task, requiring a range of significant social and economic changes. But the employment status loophole is an important reason behind the ongoing existence of insecure work, and is denying some of the very worst off workers the most basic of protections.

'As a step towards reducing working poverty change is needed now, and we must urgently tackle the issues around employment status that allow unscrupulous employers to continue to exploit vulnerable workers.'

CASE STUDY

Claire has worked as a transport cleaner for nine years for several different contractors. She has a casual 'worker' contract but has previously been considered 'self-employed'. While working with one contractor she was receiving below the minimum wage, and in one instance was not paid at all. As a result Claire decided to protest and was eventually given an interim payment to cover her wages. But even when she did get paid she wasn't given the correct amount. Other staff have experienced similar treatment. In one case a cleaner did not receive any holiday pay, and once they came back from holiday they weren't paid at all. When the individual complained about his treatment, he was dismissed. Claire has received neither pension provision nor sick pay, and all the contractors she has worked for operate on a 'no show, no pay' basis. Health and safety training has not been given. Although cleaners are given regular hours and have contracts for these hours, if a worker turns up late for their shift they could be told to go home because the shift has been covered by someone else. This means that cleaners are not paid for the hours they are contracted to work. Claire has had great trouble in managing her finances due to the low wages she has been paid. At times, she has been only been able to afford three meals a day by undertaking two jobs. Her job insecurity combined with low wages have also meant that in the past she has been unable to afford her own accommodation. She recalls a time where she was unable to pay her council tax. Consequently she was taken to court and evicted. She had to sleep on her cousin's floor in cramped conditions and wear second-hand clothing. She has also found that she is unable to get an overdraft from her bank and has found herself in debt as a result. Claire is concerned that currently there is no room for promotion with her current cleaning contractor. She notes that in the past cleaners have been given the ability to progress to managers but this has now changed.

NOTES TO EDITORS:

- The Fair Work coalition includes faith groups, voluntary and community organisations and trade unions. Current members are: Baptist Union of Great Britain, Caritas Social Action Network, Child Poverty Action Group, Citizens Advice, Community Links, Fawcett, Gingerbread, Homeworkers Worldwide, Law Centres Federation, Methodist Church, Muslim Council of Great Britain, Oxfam GB, TUC, UK Coalition Against Poverty (UKCAP) and the United Reformed Church. For more information please visit www.fairworkcoalition.org.uk

- Fair Work: Ending Poverty Through Decent Jobs is available to download at www.tuc.org.uk/fairwork/fairworkreport.pdf

- The Solutions for a Fairer Labour Market seminar is from 12-2pm on Friday 12 March 2010 at Congress House, London. Please register online at www.tuc.org.uk/TUCLabourmarketseminar or call Anjum Klair on 020 7467 1204. Speakers at the seminar will be TUC Deputy General Secretary Frances O'Grady, Professor of Social Policy and Director of the Research Centre for Analysis of Social Exclusion at the London School of Economics John Hills and Research Associate at the Centre for Regional Economic and Social Research at Sheffield Hallam University Richard Crisp. The seminar is open to the media.

- Supporting quotes from coalition partners

Baptist Union of Great Britain: The Rev Jonathan Edwards, General Secretary

'An imbalance in power in the worker-employer relationship can quickly lead to mistreatment, exploitation and poverty. Vulnerable workers often have little access to advice and don't know what rights they do have. These issues urgently need to be addressed and tighter regulation introduced in those sectors where the risks are greatest.'

Citizens Advice: Richard Dunstan, Employment Policy Officer

'The complexity of the current law on employment status makes it hard for vulnerable workers to understand what their rights are, let alone enforce them properly. To give the worst off workers a real chance of fair treatment at work the government needs to act to improve the law and ensure everyone is entitled to rights at work.'

Community Links: Maeve McGoldrick, linksuk Campaigns Coordinator

'In the economic downturn, Community Links is seeing an increase in cases where bogus self-employment is resulting in migrants and other vulnerable workers working for way below the minimum wage and very long hours in circumstances which can pose a serious risk to their health and safety. Whether it is gang-masters employing construction workers with no or little training, or courier companies forcing drivers to work in excess of 100 per week to earn enough to live on, the current rules make it far too easy for employers to exploit people who are desperate for work. We are very pleased the TUC is taking up these issues and support calls for rules around self employment to be tightened up and for gang-master regulations to be extended to cover a wider range of industries.'

Gingerbread: Kate Bell, Director of Policy, Advice and Communications

'Although nearly 60 per cent of single parents are now in paid work, far too many are moving into the ranks of the working poor. Precarious, low-paid jobs provide little chance to progress and can place extreme financial pressures on working parents. Ending the employment status loophole would be an important step towards improving the lives of working families.'

HomeWorkers Worldwide: Nesta Holden, Campaigns and Policy Worker
'Here in the UK, many homeworkers are denied basic rights because they are not deemed to be employees, or because their employment status is uncertain. A change in the law is needed, granting such workers full employment rights. Without such rights, homeworkers will continue to face frequent exploitation and insecurity.'

Methodist Church: The Rev David Gamble, President

'Agency staff and people on informal contracts are the most vulnerable and lowest paid workers in our country. They are mostly women, mostly immigrants working in domestic or farm labouring jobs and have absolutely no rights that are enforceable. They can be sacked at a moment's notice for no reason. We have asked the Government to change the regulations so that these people have rights and that these rights are enforced. Our work is part of what it means to be human, part of our spirituality. When we work we give more than just our labour; we give of ourselves. Human beings are not machines to be disposed of after ten minutes; a worker deserves fairness and dignity.'

Muslim Council of Britain: Dr Muhammad Abdul Bari, Secretary General

'Ethnic minority and Muslim workers are far more likely than others to find themselves in insecure and low-paid work. New public sector duties mean that public bodies need to be doing more to work towards race equality. Acting to ensure that more Muslim workers receive fair treatment at work would be an important step in this direction.'

Oxfam GB: Kate Wareing, Director UK Poverty

'Oxfam is a member of the Fair Work coalition because we know from our research that decent work and employment rights are an essential part of overcoming poverty. In particular we have urged the Government to review the employment status regime, which is currently widely used to deprive workers of basic protections.'

United Reformed Church: The Rev John Marsh, Moderator of the General Assembly

'The injustices and insecurities arising from jobs unprotected by employment legislation affect a huge number of people. The growing gap between the highest paid 10 per cent and the lowest paid 10 per cent - and its underlying implication about the relative worth of persons - is an unpalatable part of modern life. We are in full support of any legislation that seeks to protect workers and moves towards equality in the workplace and society.'

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Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk

Press release (2,100 words) issued 12 Mar 2010