Britain - After five years of Blair's "flexible labour market" - towards a casualised working class

Jul/Aug 2002

For months now this government has been concentrating its fire power against immigrants. Carefully worded statements verging on racism have been made by ministers to impress on "British" workers the idea that Blair was out to defend their schools, health service and way of life against some "foreign threat."

As if an economy as rich as Britain's could not accommodate a few tens of thousands of immigrant workers (one for every 400 people in the active population!) pushed onto British shores by the ravages of poverty, dictatorship and war in the Third World! As if a country which can afford the parasitism of thousands of boardroom members who award themselves 7-digit pay packets for doing nothing, could not welcome immigrant workers whose only aim is to make a decent living by contributing to the common wealth with their labour!

Labour's offensive against immigrants is nothing but reactionary scapegoating. But, of course, this scapegoating has a purpose. A whole section of the British working class is faced with the on-going degradation of its conditions. And Blair is cynically trying to divert these workers' frustration away from the real culprits - the capitalist profiteers and their politicians in government.

Indeed this government has nothing else to offer working people and the jobless. And whenever Blair ventures to refer to their situation, it is always by using the language of the bosses.

So last May, for instance, we saw Blair joining hands with Italy's and Spain's right-wing leaders to champion his so-called "flexible labour market" - with the explicit aim of curtailing employment rights across Europe. Then, a few weeks later, Blair made another reference to the working class. But it was only to re-launch his government's offensive against the so-called "economically inactive" of working age - i.e. workers on incapacity benefits, the disabled and those with chronic conditions, lone parents (once again) and the long-term, older unemployed. Blair now wants to coerce them into yet another scheme, "Job Centre Plus" - an extended version of the existing New Deal for the unemployed, which entails the loss of benefits for those who do not co-operate and take the first odd job or training scheme on offer.

In Blair's world, the parasitism of the super-rich is welcome, encouraged and even subsidised at great cost from of public funds. But the sick, the disabled and the aged are not permitted to rest. Single parents are not meant to take care of their own kids either, but instead, go to work, despite the absence of affordable childcare. As far as Blair is concerned, public funds used to help out the poor and the weak are nothing but "waste"!

This is a sick society. And it is becoming sicker and sicker as the capitalists, encouraged by Blair's policies, turn the screw again and again on workers' conditions. Blair's "flexible labour market" is indeed coming into shape, and what it means is the casualisation of workers' labour.

Have we never had it so good?

This government has been sticking firmly to its assertion that unemployment in Britain is no longer a problem. It regularly points to the decline in the jobless totals every few months to prove it, while congratulating itself on its achievements. Never mind the fact that the manufacturing sector has cut 450,000 jobs in the last five years - mostly full-time permanent jobs on relatively decent wages!

What do ministers care if many of those whose jobs were cut were forced into early retirement or into much more insecure jobs, usually on significantly reduced pay? Only one thing matters for this government - that these "redundant" workers do not appear on the dole count!

And of course the numerous past re-definitions of what being unemployed means from the point of view of official statistics have done a great deal to bring the official count down. So today, Labour ministers boast a record low 1.5m people wanting, seeking and being available for, work (the so-called International Labour Organisation's measure, redefined by the ONS for its own needs). This is 0.5m below the official 1997 level, when Blair came into office. But even using their flawed accounting method, that still leaves 1.5m jobless, without taking into account the 2.5m "economically inactive" surviving on various kinds of benefit, who Blair is trying to coerce off the state budget. Is this anything to boast about in one of the world's richest economies?

Of course, the claimant count - that is those claiming Job Seekers' Allowance or National Insurance credits - has been going down even faster. It now stands at 953,000. Which is hardly a surprise, given the increasingly stringent rules imposed in order to get onto the claimants' register. But this only underlines the fact that a large number of unemployed are left by this government without any income whatsoever.

On the other hand, we are told, the number of employed workers has reached its highest level since records began in 1979 - at 28.4m or 74.5% of the working age population. Labour boasts of having increased this figure by 1.5m. But this count includes anyone who is doing paid work for one hour or more in a week, the self-employed and those on government sponsored training programmes, even if they are receiving no pay! In fact, by reading the small print in official publications, one can work out that this is not even actually the number of employed workers, but the number of "employee jobs." In other words it includes a large element of double- accounting, due to the fact that a significant number of part-timers have no option but to work in several jobs. So comparing today's figure with past figures, when the definition of being employed was different and the number of part-time jobs lower, is simply meaningless. But that is one of the many statistical deceptions which pops out of Blair's bag of tricks.

Never mind that, however. As part of the Jubilee celebrations, the government published statistics to show that "we" (is one to assume that this is the Royal "we"?) are now twice as well off as "we" were 50 years ago. It probably never occurred to the civil servant who produced this grand news, that it is not saying very much! But apparently, today we spend our incomes on holidays, leisure goods and DVDs. Whereas in 1952, we bought canned fruit and Tupperware... And the real spending power of the average household has doubled from £190 per week in 1953 to £409 per week in 2000-01! Except that, of course, very few working class households have that kind of purchasing power, if only because much of their "disposable incomes" today go towards paying off debt...

Likewise, with the latest earnings survey, which states that "average earnings per worker" are now £443 per week. One can only laugh. Because all it shows is the huge gap between the upper crust of higher earners and ordinary wage workers, most of whom have never been on that kind of money.

Of course, real life has nothing to do with such figures. Otherwise why would other statistics show, for instance, that as many as 30% of children in this country are living in poverty?

Real life is in fact the very low pay levels that extend right across the spectrum - even in large organisations. Postal workers (180,000 of them) are on £300 at best and the vast majority of railworkers (in catering, train preparation, cleaning and most platform staff) are on a basic wage around £200-220 per week gross. And what the fact that two thirds of the local government workforce - 277,000 - earn below £5 per hour! Then there are 400,000 call centre workers, who are on wages which can be as low as £150 per week gross, with a mid-point of £220. The highest paid call handlers in London get £290/week.

And real life also includes the 30% or so of the workforce in part-time jobs. And since 77% of these are women it is obvious that their reduced hours are unlikely to be a matter of choice, but necessity. Not least because childcare facilities are both lacking and beyond the means of most working families. And Blair has something to answer for that. His 1998 "National Childcare Strategy" which was supposed to provide nursery and child care places for one million more children by 2004, has so far only delivered 6% of the required nursery places!

But this is precisely the kind of reality that government statistics are designed to hide.

Temporary contracts, permanent insecurity

Under the pretext that the car market fluctuates (as if this was something new!), car manufacturers have been increasingly resorting to employing workers on short-term contracts. This used to be opposed by the unions. But in the "New Partnership" scheme of things, union leaders have been more than willing to underwrite anything that could boost companies' profits. So, for instance, at least one third of the workforce at BMW Oxford, producing the new luxury Mini, consists of agency temps.

But is there a "fluctuating market" in local government? How come at least 10% of all local government employees are on short-term contracts? Cost, of course. This way there is no need to bother with national agreements and wages do not have to rise with seniority.

Nor can the railway sharks invoke the pretext of a "fluctuating market" for employing the same workers all year round on cleaning or catering jobs via precarious subcontracting. Except again for the fact that they can get away with paying these workers no more than the minimum wage. And of course, on these sort of wages and given workers' precarious situation, it is easy to pressurise anyone into working 12-hour shifts and 60-hour weeks.

Besides, overtly illegal practices are common among cleaning and catering contractors. A supervisor who speaks the right language will be taken on to recruit immigrant workers who may or may not have the required clearance yet to work in this country. They will then not be paid unless they produce their "papers", which of course means that many will have to move on to the next, very likely similar, job, where they will be taken advantage of once more. And even if they have all the right papers, they are very often intimidated into accepting whatever conditions are forced on them.

But many "respectable" employment agencies, who hire workers on behalf of companies, are scarcely any better when it comes to keeping workers on precarious "contracts", exploitation and illegal practices. A recent case in point is that of 11 on-train cleaners employed by one of these agencies, in York, to clean train carriages for GNER, one of the most profitable operating companies, running fast trains with a posh First Class service from London to Edinburgh. These workers were paid the minimum wage and could only make ends meet by working long hours. They were hired with the promise of a "permanent" contract with GNER. Some of them stuck it out for three years or more in the hope of getting it. The permanent contract never came. Instead, at the end of May this year, all 11 workers discovered that they had effectively been sacked by GNER. Maybe the agency had been told in advance, but the workers themselves only got one day's notice. Of course, this was illegal and so was the fact that they were not given redundancy payments.

But this is precisely the "beauty" of subcontracting workers through agencies from the point of view of the bosses. When it comes to the minimal employment rights these workers are entitled to, the companies they actually work for are able to pass the buck on to the agency - something that the agency had been expecting all along. At that point the agency workers discover that they waived whatever rights they had in the small print of the contract signed with the agency. They may even find that they are not actually "employees", but categorised as "self-employed" - yes, and on the minimum wage! Or that they did not have a real contract, with the same consequence.

This is not the only way through which many workers are deprived of their rights. So called "non-standard working arrangements" that is, occasional work, zero hours contracts, home working, "borderline self- employment" (i.e. workers who are not in business on their own accord but self-employed in common law) all have the same effect.

But this may happen also to fixed term contract workers, despite the fact that they have "employee" status. Indeed they may be subject to waiver clauses and rules on continuity of employment which effectively exclude them from employment protection and other rights. For instance the TUC mentions in a recent document a common ruse that employers resort to. When an employee's contract comes to an end, they ask him or her to sign a document stating (in the case of agency workers): "As you are aware, your current contract is due to end on [date]. I am pleased to be able to offer you a further period of employment with [employer]. However, in order to offer this further employment, you must take a compulsory break of at least eight days which will be unpaid. This is for contractual reasons." This document was actually given to a cargo handler working at Heathrow Airport for more than two years on a succession of fixed term contracts of varying duration. During that time he received no paid holidays.

Anyway, casual workers may never have continuous employment for long enough to qualify for any rights or benefits since almost all of these "rights" have a minimum qualifying period.

Agencies for profit

Over the past years, the expansion of employment agencies has been spectacular and it is still going on. In an investigatory survey of employment agencies which was commissioned by the DTI and published in November last year, it is stated that "information about this sector is limited". Surprise, surprise! Since one of the main functions of this sector is to help employers to get round the law "legally", it cannot be expected to be transparent - not that the DTI has done anything about it after this "discovery" either, of course!

The DTI's estimate of the number of agency workers is 700,000. But this must be a significant underestimate given the fact that the agencies' own trade association, the Recruitment and Employment Confederation (REC), claims that 1,130,000 agency workers are employed in any given week. In any case, this is enough to show that employment agencies, at least the large ones, are into very big business.

There are around 9,900 employment agencies in the country, some with wide national networks, like Manpower and Reed, and others operating out of single offices. Only 30% of these agencies have been in existence for more than 10 years - and these older agencies are the ones which are more likely to include permanent job-finding services as well. An estimated 20% of temps become "permanent" this way, but because this usually requires the payment of a "transfer fee" to the agency by the employer, there is a certain reluctance make workers permanent - thus locking the majority into temporary working, even if they remain with the same employer for years.

Already in 1997/98, the sector had an estimated annual turnover of £18bn. By 2001, it was £23.5bn! Today it is probably more. Given that the usual fee charged each year by an agency is between £3,000-£4,200 for each worker it supplies to a company, and their costs are around £1,000 to £1,500 per recruit, this means that these agencies make a gross profit of £1,500-£3,200 on each worker placed! No wonder this is such a "dynamic growth sector", to quote the DTI!

Just about anyone can open an employment agency without providing guarantees of any kind nor accounts of the way temps are treated. There is hardly any regulation covering them except vague voluntary "codes of conduct" and 25-year old legislation which is not designed to cope with the present growth of agency work.

True, the DTI is reviewing legislation. However it does not intend to tighten regulations, but to simplify and reduce red tape so as to promote "labour market flexibility", of course!

At the same time the DTI is assessing the potential cost and impact of an EU directive, published in March this year, on working conditions for temporary agency workers. This directive is supposedly to help improve these workers' conditions. But in fact it is presented as being designed to "lay the foundations for further development of the temporary agency sector ... to better meet firms' needs for flexibility".

This directive is likely to take at least another two years to see the light of day in Britain, and like all the other EU directives - on part-time work, and working hours - Blair's ministers can be trusted to twist it as much as possible for the benefit of the bosses. But already, even before they do their homework, the directive offers an obvious loophole which can only reduce its impact to virtually nothing: it proposes a minimum of 6 weeks in the same posting for agency workers to be granted limited equal treatment on basic working conditions. It is not hard to imagine how employers will deal with that!

Apart from Blair's fundamental orientation to the City, there is another reason why his government will not do anything to reduce the advantages for employers to use agency workers. Because, in fact, it is the government itself which gives the lead in this respect. Indeed, though overall, more temps are working in the private sector, public sector workers are nearly twice as likely to be agency workers than their private sector counterparts. Thus, for instance, on any given day, there are 19,700 supply teachers working via agencies in England and Wales, and about 10% of the nursing workforce is agency nurses.

One of the biggest areas for agency temps at present is indeed the health sector, private too, but mostly public. Here, there are four "big players" among the agencies supplying staff. Nestor is the largest, with 92,000 nurses on its register (up from 70,000 in 1996) and controlling around 18% of the whole health and care worker labour market. Nestor and its subsidiaries (BNA, Carewatch, Grosvenor, and others) have been awarded a number of contracts with NHS Trust hospitals for both the "management of internal banks" of doctors and nurses and the provision of temporary nursing staff. These contracts last 2-3 years and will generate £8m profit in just the first year of operation!

Of course there have been reports in the media about the way in which agencies are exploiting the shortage of nurses and teachers and charging huge premiums to supply these staff, while paying the recruits very low wages. One case came to light in May last year, when five graduate Filipino nurses were "rescued" from a private nursing home in Bristol where they had been working as unskilled carers, for 15 months on £4 per hour, and threatened with deportation by their employer if they complained about it.

In terms of pay, the Labour Force Survey reckons that overall agency workers are paid 30% less than their permanent counterparts. The TUC estimates that 47% of all temps earn less than permanent workers (and only 3% earn more). Many agencies specialise in providing workers to the cleaning, hotel and catering industry where wages are notoriously low.

Of course, after the lack of employment security, earnings are the most important issue affecting workers in this sector. Excluding a small number of high tech freelance workers and professionals, many agency workers end up with hardly more than they would be entitled to if they were on benefits. But they have to work for that pittance.

Of course, without the "New Deal" and all its offshoots - which are not designed to "help the unemployed into work" as they claim, but to coerce them into shifting from poverty on the dole to poverty in lousy non-jobs - these modern slave merchants would find it very hard to find slaves willing to be sold. But thanks to Blair, a lot of workers, particularly among women and the youth, do not have any alternative. So now, thanks to Labour, the slave trade is really back in business.

The right to fall through loopholes

There is draft legislation before parliament which is meant to be enacted on 10 July this year entitled: "Fixed Term Employees (Prevention of Less Favourable Treatment ) Regulations 2002". This is meant to be the British implementation of a European Union directive allegedly designed to protect the rights of workers on short-term contracts. This follows similar legislation with respect to part-time employees - who are now meant to have the same terms and conditions as their full-time counterparts, that is provided they work enough hours, of course.

What is the situation for non-permanent workers at present?

As far as pension rights are concerned, the TUC estimates that 70% of all non-permanent workers (agency and others) do not get the same access to occupational pension schemes as their permanent counterparts - the majority being excluded altogether. Of course, thanks to the bosses' increasing tendency to close down final salary schemes and to reduce their own pension contributions, plus the introduction of Blair's stakeholders' pensions which do not require employers to contribute, all workers may soon find themselves in the same boat in this respect - i.e. having to fund their future pension entirely themselves. That is, if this process of allowing pensions to go down the drain is allowed to carry on, of course.

As far as statutory sick pay is concerned, in theory after 3 months working in a job all workers are entitled to it. But many agency workers are excluded, not surprisingly, since as many as 58% of all temping postings by agencies are for less than 3 months. The TUC's estimate is that 25% of all temporary workers do not get any paid sick leave.

Likewise for paid holidays. Although agency workers are covered by the Working Time Directive and entitled to 4 week's paid holiday a year, at least 14% do not get it according to the TUC.

In many cases the employers are not even breaking the law as it stands, however. Because in all of the new protective legislation which was eventually passed (delayed and under protest) by this government, a number of loopholes were inserted which allowed bosses to impose their own conditions. So employers can refuse paid holidays to any worker who has been working on a contract for 13 weeks or less.

The proposed new legislation is supposed to ensure that workers on fixed term contracts will get comparable treatment with their permanent workmates in terms of wages and conditions of service. This includes training, unfair dismissal and adds a right to be informed of a permanent vacancy and the opportunity to apply for it. But it excludes the 90-day consultation or notification of redundancy which applies today to all permanent workers, as long as fewer than 20 are targeted for dismissal. However, none of this proposed legislation will apply to apprentices on fixed term contracts nor to anyone in a government or European Social Fund training scheme. Above all, it does not cover agency workers, whether they have a fixed term contract or not.

This major loophole means that at least until further legislation covering agency workers is introduced, employers will have the option to resort to employment agencies instead.

But will they even need to? The experience of Blair's version of the Working-Time directive should tell us something in this respect. Suffice it to say that 47% of all companies (and 71% among the largest) have used the possibility offered by the Working-Time legislation to opt-out of the weekly 48-hour maximum for selected groups of workers. And the legislation's provision which allows companies to get workers to waive their right to the 48- hour maximum on an individual basis, has been so widely used that the European Commission itself has felt it necessary to take Blair to the European Court.

So it may well be that once the new legislation is enacted, it will once again include so many opt outs for employers that they will not even need to bother about it.

But even if there were no other loopholes, the government's present attempts to drastically restrict access of all workers to Employment Tribunals can only result in a field day for employers, by deterring workers from taking the risk of being turned away by the ET, and having to pay costs, on the grounds that their claim is "frivolous"!

Same job, same terms and conditions!

Over the past period, slowly but surely, what has been created by the bosses with the willing help of governments, is a two tier (or even more tiers, for that matter) workforce. So now it is accepted as quite "normal" for there to be workers doing exactly the same work in the same place, but for them to be receiving different wages and what is more, for them to be on completely different (much worse) terms and conditions.

The fragmentation of the workforce which has been on-going through outsourcing, subcontracting etc, is now taking place within the workforce itself, as bosses bring in "casuals" or temps to provide so-called "flexibility" and cut their labour costs. With the added benefit of having more and more employees who have little recourse against over-exploitation given the absence of employment rights for non-permanent workers.

It must be said that the unions have stood aside while this happened. Worse, they have often fingered casual workers as "enemies", like in some instances in the Post Office, instead of aiming to strengthen the industrial muscle of the workforce by uniting its ranks behind common demands. In many cases, casual workers are barred from membership and/or refused union assistance because they are not members. And this can only increase divisions among workers.

Today there may be "campaigns" on the part of the TUC, the GMB and UNISON, to raise these issues. But it is hard not to see this as an attempt to make up for losses in membership, as whole sections of the working class become transient workers, tied to agencies and temporary contracts and therefore much more difficult to unionise. And the thrust of all these campaigns is at the level of trying to tinker with current and impending legislation and little more.

Yet there is an old principle in the working class movement, which we can be sure many workers have not forgotten. All workers engaged in the same work should be paid the same rate for the job and have the same conditions - regardless of their age, their sex or the colour of their socks! It is this principle which needs to be revived if the bosses are to be prevented from using casual forms of employment to undermine even further workers' wages and conditions. And if they are to be stopped from stepping up exploitation for all workers and the eventual casualisation of all jobs. The answer is in the hands of the working class: to resort to another "old" principle of the working class movement - collective action by all workers organising together across grades, skills - and employment status.

1st July 2002