Building solidarity, stopping undercutting

Migrant workers make a valuable contribution to our society and economy, whether it is leading trade union campaigns for dignity at work, working in key roles in the NHS or in manufacturing jobs where unions’ collective agreements guarantee that all workers are paid the rate for the job.

Some workers worry about how migrant workers have been used to undercut other workers where there is no union agreement to guarantee decent pay and conditions, as well as lack of investment in local skills and pressures on public services caused by over a decade of public sector cuts. Rather than address these concerns, the government’s plans for a post-Brexit immigration system would exacerbate them. This report shows the government’s plans would concentrate power further in the hands of exploitative employers, increase discrimination as well as strains on public services and shortages in key public sector jobs.

The Immigration and Social Security coordination bill introduced in January would repeal EU laws on free movement and social security coordination. This would enable the government to introduce the system of time-limited permits for EU workers post-Brexit that was outlined in the immigration white paper published in December.

This proposed work permit scheme would fuel undercutting. As we’ve seen before when schemes like this are introduced, bad employers would be able to use EU workers’ fear of losing their legal status in the country to force them to stay in a job with abusive conditions and low pay. This would undermine conditions for all workers, particularly those who are already working in sectors such as hospitality and care, where precarious conditions are common.

Trade unions in Canada and Australia have documented how their temporary visa schemes that restricted migrant workers’ ability to change employer also led to abuse and undercutting.

The government’s immigration proposals also stand to increase discrimination across society. BME groups are already disproportionately targeted in the document checks introduced or expanded by the Immigration Acts of 2014 and 2016. As the government’s new immigration proposals would require EU workers to demonstrate they had the correct visa to access employment, healthcare, banking and housing, the number of document checks is likely to increase. This, in turn, risks a significant increase in discrimination against BME groups and mean BME groups would be further at risk of losing access to vital services.

The Immigration and Social Security Coordination Bill must be scrapped and the hostile environment must end.

Rather than policies which scapegoat migrants and fuel discrimination, we need a new approach built on strong rights at work so that everyone is treated decently and paid fairly. There must be support for trade unions to collectively bargain with employers so workers can claim their rights and stop undercutting. We need proper investment in public services and skills so that everyone has the opportunity to progress at work. And we need the right approach to Brexit that ensures workers continue to be protected by EU levels of rights to support this.

his section sets out what we know about the government’s plans for immigration after Brexit.

In January the government introduced its proposed legislation for the future immigration system after the UK leaves the EU, titled the Immigration and Social Security Coordination Bill (ISSC).

EU law on free movement for EU citizens and EU social security coordination have been saved into UK law by the EU Withdrawal Act (2018). The ISSC seeks to repeal these laws so that the UK can bring in a new immigration and social security system for EU citizens after Brexit. The details for the new immigration and social security system for EU citizens are not defined in this legislation, however the bill contains ‘Henry VIII’ powers which would allow the government to introduce a future migration system via secondary legislation, without full parliamentary scrutiny.

The government’s intentions for a future migration system were outlined in the immigration white paper released in December 2018.

Key aspects of the future system proposed in the immigration white paper include:

· the introduction of a new work permit system for EU workers - following any transition period agreed with the EU.

Preference for these work permits would be given to workers taking up skilled jobs. There will be no numerical limit on skilled workers visas issued for EU workers but there will only be a limited number of visas available for low skill jobs (those that require a qualification of below Level 3 of the National Qualification Framework). These visas will only apply for a 12-month period.

· the possibility of a £30,000 salary threshold being introduced for EU citizens on the new ‘skilled’ work visas, following a period of consultation

· the possibility of an extension of the Seasonal Agricultural Workers scheme currently being piloted

· restrictions on social security entitlements for EU citizens who may have to wait until they attain settled status before they are able to access the UK benefits system, which is usually after five years.

The next section of this report sets out why these proposals would serve to increase exploitation and discrimination across the workforce.

This section sets out why the government’s immigration plans will lead to increased exploitation and discrimination, and lead to skills shortages that could damage our public services.

Increased exploitation

Too many workers are already being exploited and undercutting is taking place due to the government’s failure to provide workers with strong rights at work. Over three million workers are on insecure contracts, including agency work, low paid self-employment and zero-hours contracts. Many of these workers are not given enough hours to have the right to holiday or sick pay and are often working on worse terms and pay than directly employed workers or those on more secure contracts.

Not enough employers, particularly in the private sector, collectively bargain with unions to guarantee equal and decent treatment for all workers. While 57.6 per cent of workers in the public sector are covered by a collective agreement and 51.8 per cent are members of a trade union, only 15.2 per cent of workers in the private sector are protected by a collective agreement with only 13.5 per cent members of a trade union.1 .

The ISSC will lower standards for workers further by removing the right of EU citizens to work for an unlimited period in the UK, requiring them instead to work on time-limited visas. Workers on these visas will be vulnerable to exploitation and being used to undercut other workers. This would particularly be the case for workers on the proposed low skill work visas as they would only be allowed to be in the country for a short period and work in a restricted range of jobs.

Table 1 shows that the sectors where the majority of jobs are classified as ‘low skill’ – process operatives, elementary occupations such as cleaning, agricultural work and sales/customer services - the median hourly pay is low. This is due to low union density and weak coverage of collective bargaining in these sectors. EU workers on low skill visas are thus likely to be employed in low paid jobs where they will be vulnerable to exploitation due to low trade union coverage and discouraged from leaving their employer for fear of losing legal status in the country.

• 1BEIS (2018) “Trade Union Membership 2017”, available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/712543/TU_membership_bulletin.pdf

Table 12

Furthermore, if a worker stayed longer than 12 months on the new low-skill visa they would become undocumented and unable to claim rights at work. This is due to the fact that the Immigration Act (2016) made undocumented work a criminal offence. This means workers face a potential prison sentence if they report abuse to the authorities.

The TUC also has concerns that the government has said that there will be ‘behind the border’ checks on immigration status on workers crossing from the Republic of Ireland to Northern Ireland. This will also concentrate power in the hands of employers who would be able to threaten to report workers with uncertain immigration status to the authorities if they resist exploitative treatment.

Bad employers are already using immigration rules to prevent undocumented workers from outside the EU claiming their rights. This was illustrated in 2016 when Byron Burgers called immigration officials to investigate workers who were attempting to build a union campaign for a living wage as they knew some of the workers in the campaign had uncertain immigration status. This resulted in immigration officials questioning and arresting key activists in the campaign, some of whom were subsequently deported. This was a blow to the campaign to increase wages for all workers.

Past experiences with restrictive visas systems have shown that workers on such visas often can’t leave abusive employers without losing their legal status in the country.

Between 20 and 2013 the government ran a Seasonal Agricultural Workers (SAWs) scheme which issued work visas to workers from central and eastern Europe that were limited to jobs in agriculture. There were strict restrictions on the visa which made it almost impossible in practice for workers to change employer. This meant that employers were able to force workers on the SAWs scheme to accept abusive conditions and lower terms and conditions than other workers. Those who left abusive employers to find new work lost their status in the country which left them open to further exploitation (see Serge’s story, below). Therefore, the ISSC will fuel concerns about migration, rather than address them, by increasing the risk that migrants will be used to undercut other workers.

• 2Labour Force Survey (2018, average of the four quarters); Annual Survey of Household Earnings (2018), available at: ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/occupation4digitsoc2010ashetable14

Experience of temporary work permits in other countries also suggest that they are likely to fuel exploitation, both of migrant workers and those already resident.

Canada

In 2015, the Canadian government introduced significant restrictions to its temporary foreign worker programme including strict quotas and restricting the ability of workers on these visas to change employers. Trade unions in Canada raised concern that these visas increased exploitation of migrant workers, particularly in agriculture and care, as workers were too afraid of losing their legal status to leave abusive employers.

The United Food and Commercial Workers (UFCW) union in Canada described that this visa scheme created an ”atmosphere of fear” amongst migrant agricultural workers and that ”our staff at the migrant worker support centres often report incidences of untreated illness and injury because of the fear associated with accessing medical benefits that could signal to their employer possible productivity losses, and trigger repatriation.”3

As a result of public and union opposition, the temporary foreign worker programme was overturned and a less restrictive system that provided routes to permanent residency was introduced in 2017. 4

Australia

Workers under 31 years of age can work in Australia for a year on a Working Holiday visa. Holders of this visa can work in any job but cannot be employed on any job for more than six months. Trade unions in Australia have documented that the temporary nature of this visa has been used systematically by some employers to abuse workers. The ACTU union centre has highlighted cases of exploitation of workers on working holiday visas in the agricultural and hospitality sectors, with cases of underpayment, substandard accommodation and debt bondage. Evidence from the Australian Fair Work Ombudsman revealed that in 2016 that 28 per cent of workers on the working holiday visa did not receive payment for work undertaken and 35 per cent stated they were paid less than the minimum wage. 5

Brexit

The ISSC stands to weaken workers’ rights further by undermining the UK’s chances of getting a Brexit deal that will protect rights and jobs.

The bill would allow the introduction of a restrictive immigration regime that is incompatible with the rules of the single market which the TUC has said, along with a customs union, is probably the best way to ensure UK workers continue to be protected by the same level of rights as workers in the EU, protect jobs and protect peace between Northern Ireland and Republic of Ireland.6

Increased discrimination

The ISSC would require EU workers to demonstrate they had the correct visa to access employment, healthcare, banking and housing, increasing the number of document checks taking place across society. This risks significantly increasing discrimination against BME groups.

We know that BME groups have been disproportionately targeted in the document checks for banking, health services, employment and housing that were introduced or expanded by the Immigration Acts 2014 and 2016. These acts were introduced as part of the intention Theresa May declared, while still home secretary in 2012, to create a ”really hostile” environment through its immigration policies.7  Recently the high court ruled that the document checks required for landlords by the Immigration Act 2014 were discriminatory and breached human rights laws, as evidence showed BME groups had been disproportionately targeted.8

The document checks introduced by the Immigration Acts, combined with the Home Office’s failure to keep accurate records of immigration status, has led to many cases of BME workers losing their jobs and being denied health care and housing as exposed in the Windrush scandal that broke in the media in 2018. Cases that came to light included those of workers such as Glenda Caesar who worked in the UK for 50 years but was fired from her job in the NHS, as the Home Office did not have accurate records of her legal status in the country.9 .The additional document checks required by the immigration and social security coordination bill would mean BME groups were put at further risk of losing access to vital services and their jobs.

The TUC has also raised concerns that the document checks rolled out by the Immigration Acts of 2014 and 2016 have led to workers in health, housing, education and banking being told by employers to check people’s documents ahead of providing them with care or a service. In the case of health workers, such demands undermine their ability to fulfil human rights obligations to provide care to those in need. The TUC is concerned that further requirements for document checks through the governments new immigration proposals would only increase the pressure on workers to be border guards, rather than providers of vital services.

Damaging public services

While the government has attempted to scapegoat migrants for strains on public services, it is clear that they are caused by the government’s failure to properly fund public services and the salaries of public sector workers.

The government’s austerity agenda has seriously damaged health, education and housing services across the country. The north of England has particularly borne the brunt of cuts to local authority budgets that provide childcare, social services, library, and other services. Centre for Cities analysis revealed that residents in cities in the north have experienced spending cuts of 20 per cent compared to cuts of 9 per cent to cities in the South West, East of England and South East, excluding London. 10

Meanwhile the government’s failure to fully fund pay in the public sector has led to serious staff shortages. The pay of many public sector workers has not caught up after a seven year pay freeze. Prison officers, civil servants and school leaders are still being offered below- inflation pay rises. None of those offered pay rises have caught up on the years they lost during the years of the pay cap. TUC analysis released last year found that a range of different public sector occupations were earning between £3,000 and £6,000 less in real terms than they were in 2010. School teachers’ pay, for example, had declined by up to 15 per cent in real terms. Poverty pay remains a massive problem in outsourced areas, most notably in social care services. 11

The starting salary of newly qualified nurses on Band 5 is less than £30,000. Nurses must progress to the highest point in the band over four years to reach the £30,000 pay mark. About 50 per cent of Band 5 nurses will be below the top of the band. A prison officer’s starting salary is £22, 843 and a teacher’s starting salary is £23,720.

Staff shortages in the public sector have also been caused by the government’s failure to properly invest in skills – discussed in section D.

Staff shortages in the public sector and cuts to public services would be made worse by the restrictive immigration system the ISSC would allow to be introduced. A comprehensive analysis by UCL calculated that EEA migrants contribute £2bn net to the Treasury every year.12 . The government’s white paper on immigration estimates that the government’s planned restrictions on migration could result in reductions of up to £4bn in national revenue that could have been spent on providing quality public services.13

The government’s proposed new work permit scheme for EU workers and salary thresholds will also reduce the number of staff available to play critical roles in the health, social care and other parts of the public sector where there are already shortages. Over 60,000 staff in the NHS alone come from the EU.14

The planned restrictions for visas in ‘low skill’ jobs would also radically reduce the number of workers available to work in the care sector and other care assistant jobs in the NHS, as the majority of these jobs would be classified as ‘low skill’ due to the fact they do not require NVQ Level 3 qualifications or above. 15

The government’s proposal to introduce a salary threshold of £30,000 for EU workers to be eligible for the new skilled visa, meanwhile, would also reduce the number of workers available to work in crucial roles in public services. As noted above, the starting salary for nurses, firefighters and teachers as well as a number of other crucial public service jobs, is below £30,000.

Increased skills shortages

The TUC is concerned that restricting EU migration and failing to increase investment in skills will increase the shortages key sectors of the economy and public sector are already facing.

There has been a worrying fall in investment in skills by employers despite clear skills shortages. Table 2 shows that in sectors facing some of the highest skills shortages, such as agriculture, utilities and health and social care, investment in training has fallen in the last two years. The government’s decision in 2017 to cut bursaries for nurses and allied health professionals was one of the most significant cuts to skills funding. The number of applications to study nursing has fallen by a third since these cuts were made.16

• 3UFCW (2015) The Status of Migrant Farmworkers in Canada, available at: ufcw.ca/templates/ufcwcanada/images/directions15/october/1586/MigrantWorkersReport2015_EN_email.pdf
• 4Meardi, Guglielmo (2017) ”What Does Migration Control Mean? The link between migration and labour market regulations in Norway, Switzerland and Canada” available at: https://warwick.ac.uk/fac/soc/wbs/research/irru/wpir/wpir_109.pdf
• 5ACTU (2018) ”Permanent vs. Temporary Migration” available at:  actu.org.au/media/1033807/a4_ctr_migration_briefing.pdf
• 6O’Grady, Frances (2019) ”Theresa May is Trying to Pull the Wool Over Our Eyes on our Post-Brexit Rights”, available at: huffingtonpost.co.uk/entry/brexit-workers-rights_uk_5c668d82e4b05c889d1dfed5
• 7May, Theresa (2012) Speech to Conservative party annual conference, available at:  politics.co.uk/comment-analysis/2012/10/09/theresa-may-speech-in-full
• 8 BBC News (2019) ‘”Right to rent” checks breach human rights’, available at: bbc.co.uk/news/uk-47415383
• 9ITV News (2019) “Windrush Generation NHS Worker Lost Job and Faces Deportation Despite Living in the UK for More than 50 Years”, available at: itv.com/news/2018-04-11/windrush-generation-nhs-worker-lost-job-and-faces-deportation-despite-living-in-the-uk-for-more-than-50-years/
• 10Centre for Cities (2019) ”Cities Outlook 2019”, available at: centreforcities.org/press/austerity-hit-cities-twice-as-hard-as-the-rest-of-britain/
• 11TUC (2019)“Five Reasons NHS Workers are Still Getting a Raw Deal on Pay”, available at: tuc.org.uk/blogs/five-reasons-why-public-sector-workers-are-still-getting-raw-deal-pay
• 12Dustmann, Christian and Frattini, Tommaso (2014) The Fiscal Effects of Immigration to the UK ucl.ac.uk/economics/about-department/fiscal-effects-immigration-uk
• 13HM Government (2018), “The UK’s Future Skills-Based Immigration System”, available at: gov.uk/government/publications/the-uks-future-skills-based-immigration-system
• 14House of Commons Library (2018), ”NHS Staff from Overseas: statistics”, available at: https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7783 
• 15IPPR (2018) “‘Fair Care: a workforce strategy for social care”, available at: ippr.org/files/2018-11/fair-care-a-workforce-strategy-november18.pdf
• 16Nursing Times (2018), ”Nursing Course Applications Have Crashed by Third in Two Years”, available at: nursingtimes.net/7025246.article

Table 2 17

Research from IPPR shows that UK employers invest half as much in vocational training per employee as the EU average. Countries such as Belgium, Sweden and Germany spend well above the average.18

The government’s Employer Skills Survey 2017 revealed that 38 per cent of employees received no training in the past year (no change from the findings in the 2013 and 2015 surveys) and a third of UK employers admit that they have not trained any of their staff in the past year (this statistic has remained at this level since the survey was first undertaken in 2005).

A recent Institute for Fiscal Studies report highlighted a number of worrying trends in public investment in adult skills. It stated that further education ”has been a big loser from education spending changes over the last 25 years, highlighting that spending and numbers in further education have both fallen significantly over time.“ The total number of adult further education learners fell from 4 million in 2005 to 2.2 million by 2016. The report estimated that total funding for adult education and apprenticeships fell by 45 per cent in real terms between 2009 and 2010 and 2017 and 2018.19

The combination of funding cuts and the introduction of tuition fees in the college sector has caused a dramatic fall in adult participation rates in education. The latest annual Adult Participation in Learning Survey commissioned by the government has recorded the lowest participation rate (37 per cent) since the survey began in 1996.20

• 17Department for Education (2018) Employer Skills Survey 2017 gov.uk/government/publications/employer-skills-survey-2017-uk-report 
• 18IPPR (2017) Skills 2030: Why the adult skills system is failing to build an economy that works for everyone, available at: ippr.org/files/publications/pdf/skills-2030_Feb2017.pdf
• 19Institute for Fiscal Studies (2017) ”Long-Run Comparisons of Spending per Pupil Across Different Stages of Education”, available at: ifs.org.uk/uploads/publications/comms/R126.pdf
• 20Department of Education (2018) Adult Participation in Learning Survey, available at: gov.uk/government/publications/adult-participation-in-learning-survey-2017

The way to tackle concerns about immigration isn’t by further restrictions and exploitative new schemes, but by addressing the root cause of low pay, insecure contracts, undercutting and discrimination workers are suffering, along with cuts to public services and lack of skills training. Instead of the Immigration and Social Security Coordination Bill or the hostile environment, the TUC is calling for an approach to immigration that supports decent conditions for all, and solidarity.

We need a Brexit deal that would deliver strong rights for workers, support public investment and promote good jobs. At this stage in negotiations, we believe membership of the single market and a customs union is probably the best way to achieve this. Other countries in the single market have implemented policies that have stopped bad employers using migrant workers to undercut other workers, promoted decent treatment, ensured all workers have access to skills training and provided public services with adequate funding.

In Norway – which is in the single market but not in the EU and thus must follow the rules of the single market, including free movement of capital, goods and people – the government has worked with trade unions and employers over the implementation of free movement rules and has taken the following actions to promote good jobs and decent treatment for all:

•  It has extended collective agreements to cover sectors with a significant number of migrant workers present; these include cleaning, construction and food processing. These prevented the use of precarious contracts and ensured all workers were paid the rate for the job.
•  It has introduced ‘joint and several’ liability rules for key sectors such as construction to ensure that all subcontractors in supply chains can be held responsible for employment conditions.
•  It has brought in strict health and safety card requirements to prevent bogus self-employment in construction.
•  It has provided above the EU average in funding for skills training, particularly in shortage occupations, as well as a developed programme of apprenticeships.

Norwegian governments have also prioritised spending on public services in contrast the UK’s austerity agenda. Norway came top of the World Economic Forum’s Inclusive Development Index in 2018 for its strong investment in public services and employment protections, among other indicators. The UK, by contrast, ranks 21^st on the index due to lower levels of investment in healthcare and lack of labour market protections.21

As a result of such policies, there is a high level of public support for free movement in Norway with the majority of citizens agreeing that immigration makes a positive contribution to the country.22

The TUC calls on the government to implement similar policies to ensure that, however workers voted in the referendum, they get a fair deal at work, quality public services and the opportunity to get the training needed to progress at work.

Below we outline the six areas for action the government must take.

     1. An end to the hostile environment

The TUC calls on the government to:

• scrap the Immigration and Social Security Coordination bill and any plans to introduce a more restrictive visa system
• repeal the Immigration Act (2014) and Immigration Act (2016) to end requirements for document checks in health, housing, drivers’ licenses and banking as well as pre-emptive document checks in the workplace
• separate immigration status and employment rights so all workers can claim rights at work
• unilaterally guarantee the right to remain for EU citizens in the UK. This must include rights at work and the right to continue to claim social security entitlements.

    2. Ban zero-hours contracts and increase workers’ rights

The TUC calls on the government to:

• extend existing rights to all those in work – there should be the legal presumption that everyone qualifies for the full set of employee rights, placing the onus on the employer to prove that this is not the case
• ban the use of zero-hours contracts, and ensure all workers receive premium pay for any non-contract hours and compensation when shifts are cancelled at short notice
• ban bogus self-employment
• provide workers with a right to positive flexible working from day one of a job, with employers required to advertise all jobs on that basis
• provide workers with protection from unfair dismissal
• promote awareness of employment rights and the importance of joining a trade union – the TUC has produced guidance in 21 languages online.23 This should be highlighted during the official application process for ”settled status” run by the Home Office.

• 21WEF link
• 22Meardi, Guglielmo (2017) What Does Migration Control Mean? The link between migration and labour market regulations in Norway, Switzerland and Canada, available at: https://warwick.ac.uk/fac/soc/wbs/research/irru/wpir/wpir_109.pdf
• 23TUC (2018) Working in the UK Guide, available at: tuc.org.uk/workingintheuk

3. Restore collective bargaining and increase workers’ rights

The TUC calls on the government to:

• establish joint industrial councils across all sectors of the economy which bring together unions and employers. These would negotiate sectoral collective agreements on pay and terms and conditions for the sector
• provide the right for trade unions to access workplaces
• ensure compulsory representation of workers on company boards
• ensure all workers have the right to be accompanied by a union representative
• ensure all workers have the right to paid time off for union duties for all workers
• establish ‘joint and several liability’ rules so all subcontractors along supply chains can be held accountable for treatment of workers.

Collective agreements prevent undercutting

Unite and GMB’s agreement on Ferrybridge Multifuel 2

Unite and GMB agreed with the two Polish companies involved in constructing the Ferrybridge Multifuel 2 power station in West Yorkshire that they would follow the National Agreement for the Construction and Engineering Industry (NACEI). Part of this agreement says that ‘posted’ and other workers recruited from abroad must be paid and treated on the same terms and conditions as local workers. This meant that when the companies brought Polish workers on ‘posted’ contracts to work on the site, they were treated equally with other workers. This has fostered solidarity between workers on the Ferrybridge site, supported by Unite and GMB recruiting Polish workers into both unions. These workers are supported by union officials based on site.

4. Skill up the whole workforce

The TUC calls on the government to:

• increase investment in both workforce and out of work training to the EU average within the next five years
• introduce a new life-long learning account, providing the opportunity for people to learn throughout their working lives
• give trade unions a proper voice in the reformed apprenticeship system
• establish revitalised sectoral skills councils with representation from unions and business that would look at how to drive up pay, conditions, skills and productivity across an industry
• restore training bursaries for nurses, midwives and allied health professionals
• invest in the training and skills of workers and young people by boosting funding for our college system and doing more to enable workers to access learning opportunities – this should include an expanded National Retraining Scheme, a lifelong learning entitlement, and ring-fenced funding for a fair pay deal for college staff
• provide an entitlement to time to learn, especially for workers with low skills or in increasingly vulnerable occupations.

5. A Brexit deal that delivers for workers

The TUC calls on the government to guarantee:

• a Brexit deal that provides legal assurances that workers in the UK continue to be covered by the same rights as workers in the EU
• a Brexit deal that ensures ongoing tariff and barrier-free trade
• no hard border between Northern Ireland and the Republic of Ireland and to uphold the Good Friday agreement.

6. Fund quality public services

The TUC calls on the government to:

• end austerity
• provide new investment so our schools, hospitals and councils can deliver the services we need
• fully fund real pay increases for public service workers
• bring back key industries into public hands, including rail, the post office and water.