Britain - Labour's "workers' rights" - a free-for-all for the bosses!

Jul/Aug 2008

New legislation on the rights of agency workers has been announced for next year. This will be the latest - and last - addition to a series of legislative measures which, so it is claimed, will ensure "fair treatment" for all workers.

Presumably, it is with these so-called "new rights for workers" that Labour hopes to win back some of its core working class voters, who have been put off by its pro-business policies. Whether it will succeed, however, is another question. Because, for all the apparent benevolence of these "new rights", they are a double-edged sword - being primarily intended to suit the needs of the bosses, necessarily at workers' expense. The level of casualisation reached under Labour's 11-year tenure is there to illustrate this fact. And workers are unlikely to forget it!

An agreement skewed from the start

It has been a long time coming. The bosses' organisation, the CBI, fought tooth and nail against the very idea of equal treatment for agency temps. There was a storm of protest from British bosses at the suggestion that their sacrosanct right to exploit agency workers might be snatched away. The cry went up: "Jobs will be lost!". In the bosses' world, workers should be grateful for any job at all, however poorly paid and insecure!

At the end of May, however, a tripartite agreement between the government, the CBI and TUC, was announced at long last, on "how fairer treatment for agency workers in the UK should be promoted". The joint declaration issued on the occasion went into very few details, was ambiguous and left open a host of loopholes. It read: "after 12 weeks in a given job there will be an entitlement to equal treatment. Equal treatment will be defined to mean at least the basic working and employment conditions that would apply to the workers concerned if they had been recruited directly by that undertaking to occupy the same job. It will not cover occupational social security schemes." It went on to say: "The Government will consult the social partners regarding (..) mechanisms for resolving disputes regarding the definition of equal treatment and compliance with the new rules that avoid undue delays for workers and unnecessary administrative burdens for business".

The CBI had originally been arguing for a qualifying period of one year, which would have made the legislation completely meaningless, since the vast majority of agency workers, whose contracts are shorter than a year, would have missed out. The unions had been pushing for no qualifying period at all - which would have been the only way of ensuring that all workers were covered. But, in the end, the TUC justified endorsing the 12-week "compromise" by claiming that it would cover 70% of agency workers. This is already bad enough, but it is probably an overstatement, judging from figures quoted by the CBI - which for once, has no reason to lie about this. According to their figures, 58% of agency workers would be left out if there was a qualifying period of 12 weeks. And that is even before employers start tailoring workers' contracts to sidestep their new obligations!

Besides, as it is phrased, the agreement leaves obvious gaps. Which "occupational social security schemes" are to be excluded, for instance? For the CBI, company pension schemes would be excluded, plus company benefits such as locally-agreed (occupational) sick and maternity pay. The unions, however, seem to think the opposite. Nor is it spelt out whether "equal treatment" is to be taken to mean equal treatment with permanent workers doing the same job, or with directly-employed temporary workers doing the same job - which may make a big difference in some workplaces.

All three social "partners" are at pains to point out that they are aiming for "fairness" for agency workers without "removing the important flexibility that agency work can offer both employers and workers". As if employers and workers could have common interests! Of course it is ridiculous to pretend that workers benefit from casual, insecure jobs. As to the bosses, the only kind of "flexibility" they want is to be able to hire and fire at will, in order to reduce labour costs and keep workers on their toes for fear of losing their jobs. In other words, it is always the bosses who gain at the expense of the workers.

European fudge

The background to this tripartite agreement is a very long-standing bargaining exercise within the EU around the "Temporary Agency Workers Directive", which is not due to be concluded before 2012, although the British government has said it will try to get UK legislation onto the statute book by 2010.

As proposed back in 2002, this directive sought to ensure that "the basic working and employment conditions of temporary workers shall be, for the duration of their posting at a user undertaking, at least those that would apply if they had been recruited directly by that enterprise to occupy the same job". It also included clauses on the obligation to inform agency workers of permanent positions where they were working, to abolish fees charged by agencies to for finding workers a job, and to ensure that agency workers had access to collective facilities where they were working, such as canteens, transport and child care.

However, in case all this was just too hard for member states to square with their own capitalists, this version of the directive gave them some leeway: the provisions could be overridden when the workforce was covered by a local collective agreement or when agency workers were employed for less than six weeks. This last exemption amounted already to a 6-week qualifying period.

This directive shared the spirit of Brown's tripartite agreement by stating that "temporary work should meet undertakings' needs for flexibility and employees' need to reconcile their working and private lives and contribute to job creation and to participation and integration in the labour market". But it was more explicit in its stated aims than Brown's agreement dares to be, saying that "an improvement in the minimum protection for temporary workers (..) will enable any restrictions or prohibitions which may have been imposed on temporary work to be reviewed and, if necessary, lifted if they are no longer justified". In other words, the directive's real aim was to legitimise agency work and to extend it to areas where it is currently banned or restricted - as it is the case, for instance, in the French civil service or in the German and Spanish construction industries. Far from protecting agency workers, its main purpose was to increase their numbers!

But even with such a pro-business slant, this was too much for the CBI which, unlike bosses in most EU countries, is not used to being told what to do by law - since most employment regulations are governed by codes of conduct in Britain, rather than enforceable legislation. So the British government, among others, obediently carried on blocking the directive for the next six years.

This did not change after Labour pledged to legislate on agency workers' equal treatment, as part of the Warwick agreement signed with the TUC, in the run-up to the 2005 general election. Once the election past and gone, the pledge was forgotten. Thereafter, union leaders lobbied backbenchers over the issue. Some, because they wanted fewer hard-to-unionise agency workers, others, because their unions were trying to organise these workers. This resulted in two private members' bills on agency workers' rights, without Brown daring to peep a word for or against. The second one even got through to the committee stage, which meant the government would have had to fight it openly, thereby forcing Brown to show to hundreds of thousands of potential Labour voters among agency workers that he was against them having equal rights..

At that point, instead of leaving Brown to face this embarrassing situation, the TUC chose to help him out by caving and agreeing to a 12-week qualifying period, which paved the way for the tripartite agreement and the withdrawal of the private member's bill. The TUC's concession also allowed Brown to agree to an amended version of the EU directive, in which the clauses of the tripartite agreement will feature in some way, probably as a special protocol applicable to Britain.

All in all, it was a good deal for the Brown and his business masters, especially since in the same session, he also managed to retain Britain's opt-out from the Working Time Directive, albeit with a few more restrictions but nothing that can bother the bosses!

The addiction of British bosses to casualisation

The extensive use of agency workers is part of the general process of casualisation which started earlier here than in most rich countries, and British bosses are even more dependent on it than their counterparts on the Continent. There are fewer regulations on temporary work here than almost anywhere else in Europe - and more agency workers. An estimated one-third of all agency workers in Europe are working in the UK. The average daily number of agency workers as a proportion of total employment is 4.3% in the UK, compared with 2.1% in the US and the Netherlands, 1.3% in Ireland and 0.9% in Germany. Not surprisingly, the number of agencies has exploded - there are now around 17,000 operating in the UK, up from less than 10,000 in 2002.

Agency workers earn, on average, a third less than permanent workers. Even if this is adjusted for age, skills, etc, there is still a 10% gap between the wages of an agency worker and his permanent counterpart. And though agencies are coy about the fees they charge to businesses, the government takes the typical fee to be about one third of the wage received by the worker. Since employing agency workers involves no National Insurance or pension contributions, nor redundancy payments, it works out cheaper for the big companies, especially on short to medium-term contracts. No wonder the bosses were so strongly opposed to the introduction of the right to equal pay and conditions for agency workers!

No wonder, too, that agency temps are so commonly used throughout the economy, in both blue and white collar workplaces. This was not always the case, however. Until relatively recently, the traditions of the working class movement remained firmly rooted in the idea that workers doing the same job were all entitled to the same pay and conditions. This was considered, rightly, as a means to express and guarantee workers' unity and strength. In the car industry, for instance, agency workers would have been unthinkable not so long ago. The fact that, today, the car companies make significant use of agency workers, among other forms of casual labour, reflects the shift in the balance of social forces over the past two decades, against the working class. It is, in some ways, a measure of the ground lost by workers - ground that they will have to regain.

BMW drives a wedge through the workforce

The BMW factory, which assembles the Mini at Cowley, in Oxford, is used by the government as a showcase for its "flexible market", because of the extent to which BMW has come to rely on agencies, in the space of a few years.

Agency workers were first sneaked in by the company in 1999, at a time when they were bringing workers from the Longbridge factory to work on the lines in Cowley, in the run-up to its sell-off by BMW. However, some of these bussed-in workers were agency workers recruited in Birmingham by Manpower.

Having set this precedent, BMW also recruited agency workers in Oxford right up until they were ready to get the plant prepared for the new BMW-Mini. In 2001, when production of the Mini had built up, agency workers were recruited again - but this time, with the explicit agreement of the union in the plant, the T&G (now Unite).

Today at Cowley, 1,200 manual agency workers make up almost half of the 2,500 manual workforce, out of a total workforce of 3,900. In some areas, particularly the assembly line, 80% or more of the workers are agency temps. Given this high proportion, BMW can hardly pretend that the use of agency workers is merely to cover "fluctuations" in production. They are presently paid 17% less than permanent workers, are not entitled to sick pay and get less annual leave.

On one occasion in 2006, BMW used an agency called Atlanco-Rimec to recruit around 100 workers from Poland and Portugal, for six months. When they reached the airport, these recruits were told to sign a form agreeing that the cost of the flight would be taken from their pay. Then some of them found that £400 a month was deducted for accommodation, in this case a house shared with 13 other workers, and also sometimes with rats. They were cheated once more when the contracts were over, being charged for the cleaning of the houses, including £400 for cleaning non-existent carpets!

After using a number of different agencies, BMW at present uses only two, both of which have permanent offices and "consultants" on site - Manpower and the inappropriately-named Right4Staff - which are able to act as a buffer between BMW and the agency workers.

More importantly for BMW, the agencies also police the temporary workforce for them. Workers whom BMW wants to sack are "referred to the agency", as they euphemistically put it. It is agency "consultants" who harass workers for being off sick, to the extent, in one case, of tearing up a doctor's note. It is also their job to force workers to take their holidays when it suits the company, not when it suits them. Of course, the main sanction used against temporary workers is the loss of their jobs, which is one of the reasons for the high turnover of agency workers. But quite a few leave in disgust at their treatment.

Usually agency workers at BMW are taken on for 6 months, after which they can be "considered" for permanent recruitment. Since 2002, the number to be taken on permanently has been negotiated with the union as part of the pay deal. In 2004, for example, only 200 new permanent contracts were agreed over the following 2 years, at a time when there were 1,300 manual agency workers. The selection process, also agreed by the union, is designed to allow BMW to pick and choose who is made permanent. As a result there are agency workers who have been there for six or seven years who still do not have a permanent contract.

But even if a worker gets a permanent contract, the second-class treatment continues. They still have to serve a year's probation - even if they have been working on their job for several years already. And during this probation period, they have no right to company sick pay, thanks to a change introduced by BMW, with the backing of the union convenor.

As mentioned before, the plant's union leadership has endorsed BMW's use of agency workers all along, in exchange for being allowed to sign them up to the union. But It actually negotiates separately with the agencies over their pay and conditions, while not allowing them to vote on them - seemingly, because they do not recognise the possibility of strike action over any issue affecting agency temps. In their view, the temporary workers are good enough to pay dues to the union, but not to have any say.

The union's stated aim is to eliminate the pay gulf between temporary and permanent workers and hence, in the last pay deal, temps got 0.1% more than the permanent workforce - but at that rate, it would have taken them 170 years to catch up! The plant union also does not allow the agency workers to vote on other things which affect every worker in the factory, like shift patterns, nor do they let temps stand as shop stewards, though there is every reason for them to be able to do so.

Flexibility's ugly side

If this is the situation in one of the better organised sections of the working class, no wonder that there are even worse abuses elsewhere. A report on "vulnerable" workers just published by the TUC gives a picture of the kind of treatment which is "normal" for many agency temps in Brown's flexible labour market.

One example is of agency workers who were obliged to attend every morning at 5am to find out whether they were needed for a street-cleaning job. At first, they would typically get only 2 days work in any week. Once they had turned up regularly for a while, they would probably be selected every day - unless, that is, they took a holiday or were sick, in which case they would be back to the bottom of the pile. They were also forced to buy their own safety boots - the money was taken out of their wages at source. And the employer responsible for this was not a disreputable cowboy contractor, but the local council itself! In this case the local union eventually got the council to discontinue these practices and take the agency workers on permanently.

Another example concerns an agency worker who, after working in the same job for several months, failed to be paid for 2 weeks and to receive enhanced rate for a bank holiday he had worked. When he pursued this, the agency eventually told him he had never worked for them as they had no record of him, and in any case, he was no longer required! Such behaviour may not be too surprising coming from the "rogue" agencies, which the government keep contrasting with the "reputable" ones - except that, in this case, the agency happened to be one which the worker had been referred to by JobCentre Plus. In fact, there is evidence that agency work accounts for an increasing number of vacancies filled via Jobcentre Plus - in other words, people are being forced into insecure work in increasing numbers by the government itself!

Migrant workers make up a significant proportion of agency workers - nearly 1 in 7 agency workers have arrived in the UK in the last 4 years, compared with 1 in 50 of the permanent workforce. The scandal of the treatment of some migrant workers is well-known, yet it is allowed to continue.

It was only after the deaths of 23 Chinese cockle-pickers in Morecambe Bay that the government felt it had to be seen doing something. Out of this came the Gangmasters' Licensing Agency, to try to eliminate the worst abuses - but its operation is restricted to agriculture and food-processing. And even in this area, the TUC was still able to find an example from last summer, of a Hungarian worker who was paid £2.40 per hour for working in a food-processing factory, while being housed in an unfurnished house, with no fridge, with 14 others. There was no training and no sick pay. He and his fellow-workers were physically threatened when they tried to involve a union.

In the case of employment agencies, there is a Standards Inspectorate, which should theoretically pick up agencies operating outside the law - but it only has 12 inspectors to cover the whole country. The government says it intends to double their numbers - but this is hardly likely to make the crooks quake in their boots!

Casualisation comes in many forms

Of course, there are many kinds of precarious work and many ways of down-grading pay and conditions, agency work is just one of them. In Royal Mail, for example, casual workers are traditionally employed to cover the busy Christmas period. These days, however, using casual workers has become RM's "normal" method of recruiting, even if these workers are employed directly by Royal Mail on temporary fixed-term contracts. This means that in theory they have the same pay and some, at least, of the same rights, as permanent workers, unlike their agency counterparts.

More often than not, though, when their contracts come to an end, they are left guessing until the last minute whether or not they will still have a job the following week. And even if they are eventually made permanent, the other trick of Royal Mail management is to offer only part-time contracts, of 30 hours per week. "Part-time" workers will usually be asked to work more hours - the equivalent of a full-time week, or even longer. But in slack periods, Royal Mail has the option of cutting their hours back to 30.

As with a lot of Royal Mail's other flexibility measures, in practice, the postal union, the CWU, has gone along with this, even if the CWU has declared itself opposed to casualisation in principle. What is more, casual workers have often been told that they cannot join the union (though it will sometimes represent them), as though they were not part of the workforce. As a result, many of them stay out of the union after they are made permanent.

Sub-contracting is another major way in which pay and working conditions have been undermined. Over the past four decades, the practice of hiving off bits and pieces of an operation, to be run by a third party, has spread throughout all sections of the economy, until now it is the rule in any sizeable enterprise, whether in the private or the public sector. The aim of the game, of course, is to cut costs, and to do this primarily by cutting wage costs.

And it is not just blue-collar workers who are affected - local authorities, for instance, have not just contracted out rubbish collections and street-cleaning, but also housing benefits administration, call centres, even entire sub-divisions like education. To win and retain contracts, sub-contractors cut their costs to the bone, often by using casual workers or simply paying lower wages than the client employer does. They are often unscrupulous cowboys, out to make a quick buck on workers' backs - but this applies just as much to "respectable" multinational companies specialising in this line of business, such as Compass, Rentokil or Sodexho, to name just a few.

Privatisation of the public sector set the trend. After the dismembering of the railway, the various companies sub-contracted functions like cleaning and maintenance. This proved disastrous for Railtrack and when Network Rail took over, they were forced to bring the bulk of the maintenance contracts back in-house. But the degradation of the terms and conditions of the workers was not simply reversed. The process of bringing everyone back onto the same pay and conditions, which Network Rail has used as another cost-cutting exercise, has been so protracted that, five years on, the workforce is taking strike action to finally get this "harmonisation".

Train-cleaning on the East Coast line was subcontracted to ISS, a Danish multinational, which claims 440,000 employees worldwide. The existing cleaners were transferred to ISS on their existing pay. But cleaners subsequently recruited lost the right to free travel to work that their older colleague had. Since many workers chose to live in Peterborough, because they could not afford London prices, this sudden extra expense ate up most of their wages and they were forced to leave the job. Workers recruited subsequently were paid the minimum wage and were only entitled to statutory sick pay. But ISS has "harmonised" wages - by denying everyone a pay rise, except when the minimum wage was increased, so that the longer-serving workers are now down to minimum wage level tool!

New rights for all?

So, what is the state of play for casual workers today? In fact, agency workers are not the only ones missing out on equal treatment. The 2002 legislation which encapsulated so-called "new rights" for workers on fixed-term and part-time contracts, also included a number of traps for workers and loopholes for the bosses.

The most obvious ones are those for part-timers. On paper they are granted "equal rights" with permanent workers, except that these "equal rights" are all "pro-rata". This means, for instance, that these workers can only afford to catch "part-time bronchitis", since they only get pro-rata statutory sick pay, just as they can only be part-time mothers, since maternity pay is also pro-rata.

Another trap, hidden in the small print of both sets of legislation states that: "less favourable treatment of a (..) worker will be justified on objective grounds if it can be shown it is necessary and appropriate to achieve a legitimate business objective". In other words, it is enough, for instance, for an employer to state that his business plan requires that a temporary or part-time worker is on a lower rate than permanent workers doing the same job, for this to be legal! This is not just a loophole, but a licence for employers to dismiss any idea of equal treatment out of hand!

However, all casual workers, whether agency, directly employed temps or part-timers, should, in theory, benefit from the general employment legislation passed since 1997 - like the minimum wage, health and safety regulations, the various pieces of equality legislation, minimum paid holiday entitlement and the working time regulations.

Of course, the minimum wage was introduced at such a low level that it had very little impact on the very low paid (of whom agency workers make up a significant proportion), while providing companies with a benchmark for wage payments. So it helped to push average pay down among non-skilled workers. In addition, there are loopholes which allow large, posh restaurant chains, for instance, to pay their waiters less than two-thirds of the minimum wage, the difference being made up in tips.

Of course, even when rights do exist, on paper, making them stick is another matter. The record of enforcement of the existing rights is dismal - especially after it became possible for costs to be awarded against workers who lose their cases in industrial tribunals. Overall, thanks to Labour's determined pro-business policy, the array of so-called "new rights" for workers amount to very little.

Cutting the bosses' costs

This is not likely to change, either, judging by the approach spelt out in reports published by the government over the past few years. For instance, a 2006 report published by the then DTI, under the title of "Success at Work, protecting vulnerable workers, supporting good employers", boasted of Britains's wonderfully "diverse" and "flexible" labour market, in which there were so many "patterns" and "types" of work, "from part-time work of a few hours to agency work to opportunities to work overtime"! A few hours per week might be nice for an executive on a 4-digit hourly rate (common in big companies' boardrooms), but not for the average worker with bills to pay. Nor is it love of the job which prompts workers to seize the "opportunity" of killing themselves with overtime! The report stresses that "employees regularly choose to get a better or different job - a choice exercised by around 4 million people a year". Some "choice", when you have an employer's boot and the Jobcentre's threats as an "incentive"!

Nevertheless, because "too many people... were stuck on the margins of the labour market", two pilot schemes were set up to find ways to support "vulnerable" workers to claim their rights - for instance to challenge law-breaking by employers! But of course even if they know their rights, it is difficult for workers to challenge an employer if they can be sacked at the drop of a hat, as most casual workers are. This is precisely what makes them "vulnerable" and it does not need a pilot study to find this out!

Since then, a new report came out called, "Employment Law Simplification Review". As the title implies it outlines how to go about "cutting red tape" for the bosses so as to make access to tribunals even harder for workers, thereby making them even more vulnerable!

Uniting the ranks of the working class

The union machineries bear a significant responsibility for this state of affairs, first, by endorsing, partly or fully, the bosses' casualisation drive in order to protect their cosy "partnership" relationships; second, by giving credit to the government's propaganda which claims that what is good for profits is not only good for workers, but provides workers with the only way to improve their own lot; and, third, by subjecting any significant gains in workers' conditions to minute legislative concessions, thereby portraying Parliamentary lobbying as the only way forward.

In fact, in the worst cases, the union machineries have treated casual workers as lepers, who had to be kept away from normal union operation. And when the union machineries have done something about casualisation, it has often been more in order to promote their own bureaucratic interests than to defend workers' rights. So, they have put much less effort into fighting casualisation than into seeking negotiating rights with subcontractors and agencies. The TUC itself has led the way in this respect, by praising the employment legislation introduced under Labour, with the only reservation that it failed to "recognise a role for collective representation" - i.e. to offer the unions a seat at the table to represent casual workers, regardless of their real rights.

The TUC talks about the great lengths unions have gone to, in order to recruit agency workers, British and foreign - by organising English classes for foreign speakers, producing information, using recruiters from the foreign workers' own countries to liaise with them, etc.

If the aim of this activity was not merely to increase the number of recognition agreements signed by these unions with new employers, but to consolidate the links between all sections of workers, foreign and British, casual and permanent, it could have a value for the working class. However, this is not the case. Worse, union officials are heard all too frequently, claiming that no industrial action is possible because, among other bad reasons, agency workers or part-timers will "break the strike".

The reality is that, with over 25% of workers in employment being either part-timers or temps, not to mention on-site sub-contractors, casualisation is a fact of life. But this does not mean that it has to be an obstacle in rebuilding the unity and strength of the working class. After all, employment status and company uniforms are merely devices invented by the bosses in order to divide workers' ranks. But beyond their different status, skills, uniforms, etc.. workers are all faced with the same exploitation by the same capitalist class.

This reality certainly does, however, make the sectionalism of the trade-union machineries more irrelevant than ever. If the working class movement is to have a future, it has no use for organisations which not only condone, but actually entrench the divisions that the capitalists strive to create in its ranks. Today, it is more vital than ever that all workers should organise together, at shopfloor, workplace and industrial levels, as well as at the level of all localities, regardless of status, skill and employer. If there was ever a pre-condition for an effective fight back by the working class, especially in this period when the bosses and their politicians are preparing to make the working class foot the bill for their financial crisis, this is it!