Insecure work

Date
August 8, 2020
Issues
image

Why decent work needs to be at the heart of the UK’s recovery from coronavirus

Executive summary

Some 3.6 million people, one worker in nine, were in insecure work ahead of the coronavirus outbreak, leaving them exposed to massive drops in income or unsafe working conditions when the pandemic hit.

Such work is not evenly distributed, being concentrated in occupations like caring and leisure.

Those in insecure work often don’t know what hours they will work (causing chaos with arrangements like childcare) or whether they will be able to pay their next bills.

Their work can suddenly dry up when the business sees demand dip.

Insecure work is also bad for the economy, with clear evidence that decent work leads to better economic outcomes.

The forthcoming Employment Bill provides a vital opportunity to put in place measures to ensure that decent work becomes widespread and that practices like zero hours contracts are left in the past.

Introduction

The TUC is the voice of Britain at work. We represent more than 5.5 million working people in 48 unions across the economy. We campaign for more and better jobs and a better working life for everyone, and we support trade unions to grow and thrive.

Some 3.6 million people, one worker in nine, were in insecure work ahead of the coronavirus outbreak, leaving them exposed to massive drops in income or unsafe working conditions when the pandemic hit.

The TUC wants the government to use its forthcoming Employment Bill to ensure that the return to normality that so many crave does not mean a return to insecure work.

Secure, good quality jobs - including for those key workers who continued to work outside the home during lockdown - are essential to a sustainable economic recovery.

New analysis by the TUC shows that those in occupations such as caring and leisure were particularly likely to be in insecure work including working on zero-hours contracts, in agency, casual and seasonal work or among low-paid self-employed who earn less the minimum wage.

Pay rates are significantly lower for many insecure workers, with the typical worker on a zero-hours contract on an hourly rate a third lower than the average employee.

Our analysis shows that while insecure work was evident across the United Kingdom, it was particularly prevalent in Wales and South West England.

Future analysis by the TUC will show the disproportionate amount of insecure work being done by Black and minority ethnic workers compared to white workers.

Now, as attention now turns to recovery from the pandemic, the UK faces an important choice.

Do we pursue a lop-sided free-for-all where employers can bid down pay and conditions and drop workers at will? Or do we ensure that all workers have security, dignity and a voice in the workplace as a solid basis for a sustainable economic recovery?

The pandemic reset in many people’s minds what worthwhile work looks like.

Roles that had long been overlooked and underpaid - shopworkers, delivery drivers, home carers, nurses and school staff - were recognised as crucial to the functioning of a country in lockdown.

But even as claps for carers echoed across the country, many workers, including key workers, faced the rough side of an employment market that values flexibility for employers over good quality jobs:

  • Low-paid care workers on insecure contracts were forced to go to work without the protective kit they felt they needed.
  • Many zero hours contract workers in hotels, pubs and cafes saw work – and pay - dry up overnight.
  • Pregnant workers were left worried for their health and unsure of their rights and how to enforce them.
  • We also saw unethical “fire and rehire” practices at companies like British Airways as opportunistic bosses sought to undermine establish pay and conditions.
  • A coronavirus outbreak in Leicester was blamed on the garment industry, revealing the limited ability of many insecure workers to enforcement their employment rights and safeguard their health and safety.

Improving job quality is not something that can wait until the economy has picked up again.

The economic recovery from the 2008 financial crisis was characterised by poor productivity and low wage growth.

The coronavirus revealed then fragility of those jobs as many disappeared overnight.

Greater security for workers would mean a stronger recovery. The evidence is that decent work is good for the economy.

To begin to deliver this, we need:

  • The effective abolition of zero hours contracts by giving workers the right to a contract that reflects their regular hours, at least four weeks’ notice of shifts and compensation for cancelled shifts
  • penalties for employers who mislead people about their employment status and protections for the genuinely self-employed
  • workers to have the right to challenge their parent employer over minimum wage, sick pay and holiday pay abuses
  • genuine two-way flexibility by giving workers a default right to work flexibly from the first day in the job, and all jobs to be advertised as flexible

This would remove some of the worst elements of insecure work.

But to ensure workers can enforce their rights and provide sustained progress for workers, the positive role that unions have played during the coronavirus pandemic must be embedded by ensuring they continue to play a significant role in the workplace and wider economic life.

Who is in insecure work?

Insecure work is widespread.

TUC analysis of official figures shows that there are currently 3.6 million people in insecure work, some one in nine workers.

When estimating the number of people in insecure work the TUC includes:

  • those on zero-hours contracts who risk missing out on access to key rights and protections at work, lack income security and face lower rates of pay
  • agency, casual and seasonal workers (but not those on fixed – term contracts) who risk missing out on key workplace rights and protections and face lower rates of pay
  • the low-paid self-employed who miss out on key rights and protections that come with being
  • an employee and cannot afford to provide a safety net for when they are unable to work.

Insecure work is not new, although its prevalence increased following the 2008 financial crisis as the Coalition government and its successors focused on the number of jobs rather than their quality.

The total number in ‘insecure work’ includes (1) agency, casual, seasonal and other workers, but not those on fixed – term contracts, (2) workers whose primary job is a zero-hours contract, (3) self-employed workers who are paid less than the minimum wage.

Occupation

Insecure work isn’t just found among the food delivery riders and taxi-drivers of the new app-based platform economy, who are prominent in discussion of the topic.

Though it is rife in these roles, many of those in insecure work are in the sorts of key workers – carers, delivery drives, shopworkers – whose worth to society was brought sharply to attention during the pandemic.

For example, nearly one in six (15.6 per cent) of those in caring, leisure and other service roles were in insecure work, according to our analysis of official figures.

Nearly one in five (18.4 per cent) of those in elementary roles, such as security guards, taxi drivers and shop assistants, and a similar number of those in skilled trades (18 5 per cent) are in insecure work as are 17.2 per cent of process, plant and machine operatives.

This compares to 6 per cent of those in professional roles and 6.4 per cent of those in administrative or secretarial jobs.

Gender

The patterns of insecurity vary significantly according to gender.

Women are more likely to be in forms of insecure work where they are employees - with 7.1 per cent of women in this type of insecure work compared to 6 per cent of men.

However, men are significantly more likely to be in low-paid self-employment, earning less than the minimum wage for their age group. One man in 15 is in low-paid self-employment (6.6 per cent), as against one in 23 women (4.3 per cent).

This means that, overall, 11.4 per cent of men are in insecure work, compared to 10.4 per cent of women.

Untitled

Numberproportion
Male
total insecure employees
833,176
January 1, 976 5:17 AM (GMT+1)
total low paid self-employed
1,140,000
January 1, 670 12:00 AM (GMT+1)
total insecure work number
1,973,176

Regions and nations

A significant number of workers are in insecure work in every region of England and in Wales and Scotland.

It is particularly prevalent in the South West of England (13 per cent) and in Wales (13.1 per cent).

The north west of England and the West Midlands fare better, but still nearly one worker in ten is in some form of insecure work.

Untitled

Insecurity and low pay

Insecurity and low pay go hand-in-hand.

TUC analysis shows that all categories of insecure worker is paid significantly less than employees in general.

So not only are many insecure workers vulnerable to the sudden withdrawal of work, but they also have less capacity to withstand shocks to their income because their wages do not allow them to build a savings buffer.

Our analysis shows the median gross hourly pay for those in casual work amounted to £8.03 an hour in 2019, for seasonal work £8.10 and for zero hours workers £8.17. Those working for an employment agency typically received £9.69. But this is well behind the £12.25 average for all employees.

Untitled

Median Gross Hourly Pay rate2019 average (£)
All employee
12.25
ZHC
8.17
Working for an employment agency
9.69
Casual Work
8.03
Seasonal Work
8.1

Source: Labour Force Survey

Wage rates for self-employed workers vary hugely. But crucially, half the self-employed earn less than the national minimum wage is stronger.

Why does insecure work matter?

Insecure work pushes an unfair amount of risk onto the individual worker.

When there is sudden downturn in demand, such as when the hospitality sector (a sector with high levels of insecure work) was shut down during lockdown, workers find their work dries up overnight.

Those who have to work fear raising concerns, such as worries about health and safety, in case it means they miss out on future work

Even in relatively good times, workers often don’t know when they will be working and for how long and how much they will be paid.

Often those in insecure work miss out on key workplace rights such as:

  • the right to return to the same job after maternity, adoption, paternity or shared parental leave
  • the right to request flexible working
  • the right to protection from unfair dismissal or statutory redundancy pay
  • and many insecure workers miss out on key social security rights such as statutory sick pay, full maternity pay and paternity pay.

As it stands, employers can offer work at a moment’s notice, with the risk of losing other shifts forcing workers into agreeing to work at the last minute. They can also send workers home seconds before a shift has started, or even part-way through.

The practice of employers providing short notice for shifts, or cancelling at short notice, is prevalent.

TUC polling shows that over half (51 per cent) of zero-hours workers have had shifts cancelled at less than a day’s notice – and nearly three-quarters (73 per cent) had been offered work in the same time frame.[1]

Among workers with no fixed hours more broadly, more than a third have had hours cancelled with less than 24 hours’ warning.[2]

This makes it impossible for affected workers to plan their finances or manage responsibilities such as childcare.

Progression is also a problem as employers fail to invest in those they feel they have little obligation to. Non-standard employment often means that you receive little training and development, according to the OECD.[3]

Sometimes insecurity can have major health and safety effects. Unsafe conditions in Leicester garment factories were blamed on a rise in coronavirus cases in the city. The scandal highlighted the ability of big firms to avoid responsibility for the behaviour of sub-contractors.[4]

Workers want security

Spurious claims are sometimes made about the value of “flexibility” to workers on zero-hours or short-hours contracts.

The reality is that rather than pick and choose their hours, many workers feel compelled to work whenever asked. If shifts are turned down, there’s an implicit threat that they could lose future work.

So flexibility exists for the employer, but not the worker. Instead, the worker is left to struggle with uncertain hours, irregular income, a lack of basic rights and a general sense of insecurity at work.

When the TUC asked workers on zero-hours contracts to select all the reasons why they are in this type of employment, 43 per cent said it was the only type of work available.

Two-thirds (66 per cent) of zero-hours contract workers would rather have a contract with guaranteed hours.

Just one in four (25 per cent) say they prefer being on a zero-hours contract.[5]

Decent work and a strong economy

The policy response to the last financial crisis was to prioritise job creation over job quality.

This has meant further undermining of trade union rights,[1] weak individual rights[2] and underresourced state enforcement[3].

The result was unexpectedly high levels of employment but at the expense of insecurity and, for many, underemployment.

But these low-paid roles are the ones to have been hit hardest by the economic impact of the pandemic.[4]

This is potentially damaging for the workers involved who lose income. But it can also be bad for companies who lose experienced and skilled staff.

In the coming months, there will be loud voices arguing that the answer to our economic challenges is, once more, for government to get out of the way and for existing rights to be watered down.

But with widespread unemployment now a real risk[5], we know where that can lead.

This is the approach that left communities and individuals scarred by long-term joblessness in the 1980s.

Or in jobs that provide low pay, few prospects and insecurity where workers’ hours or even their role can disappear overnight.

Decent jobs mean good wages but they are also about security, skills development and achieving a balance between working and private life.

The OECD argues that countries with policies and institutions that promote job quality, job quantity and greater inclusiveness perform better than countries where the focus of policy is predominantly on enhancing (or preserving) market flexibility.[6]

An opportunity for change

During the pandemic many of those in low-paid and insecure work, such as carers, shopworkers and delivery drivers were seen to continue doing potentially hazardous work.

There was widespread public recognition of the contribution and sacrifice of these workers (“clap for carers”) and the sense that injustices around pay and employment status need to be rectified.[7]

There was also a link between prevalence of insecure working and the spread of Covid-19.[8]

There are strong indications that those in the lowest-paid roles were hit hardest by the economic impact of the pandemic, either by being put on furlough, having their hours cut or losing their role entirely.[9] Women have been disproportionately affected.[10]

While there is considerable appetite for ‘a return to normal’ in regard to family, home and community, there is a realisation that a focus on resolving Covid-19 and restarting the economy will rely on significant changes to the way we do things.

The Employment Bill announced in the Queens Speech in late 2019 recognised that some of the problems relating to insecure work need to be resolved.[11]

It promised changes to employment rights enforcement, greater protections for pregnant workers and floated the idea of a right to request flexible working.

But the proposals outlined are likely to be inadequate to the task.

For example, a right to request a more predictable contract fails to take account of lop-sided power within the workplace that places little obligation on the employer to respond positively.[12]

Likewise, a right to unpaid leave for caring responsibilities is of little use to many workers who will be unable to afford to take the time off.

As a priority, we need to raise minimum standards, such as:

  • the effective abolition of zero hours contracts by giving workers the right to a contract that reflects their regular hours, at least four weeks’ notice of shifts and compensation for cancelled shifts[13]
  • penalties for employers who mislead people about their employment status
  • genuine two-way flexibility with a default right to work flexibly from the first day in the job, and all jobs to be advertised as flexible
  • allow workers to bring a claim for unpaid wages, holiday pay and sick pay against any contractor in the supply chain above them.

But a more comprehensive approach is needed if we want to seriously improve the conditions faced by some of the country’s most insecure workers. This would include:

  • All workers including agency workers, zero hours contract workers and casual workers, to be entitled to the same floor of rights currently enjoyed by employees.
  • A statutory presumption that all individuals will qualify for employment rights unless the employer can demonstrate they are genuinely self-employed.
  • Penalties for employers who mislead staff about their employment status.
  • Employment tribunals to have the power to make wider recommendations.
  • Corporate reporting requirements on employment models.
  • Continuity of service to continue even if an individual does not work during any given week, to assist with qualification for key rights.
  • Regulation of online platforms as employment businesses and agencies.
  • Employers to have a duty to prevent sexual harassment in the workplace.
  • Mandatory ethnicity and disability pay gap reporting.
  • A ban on pay secrecy.
  • Ensuring the government meets its commitments to introduce family-friendly measures set out in the box below on “Expected contents of the Employment Bill”
  • A day one right to work flexibly and all jobs to be advertised as flexible
  • Improved maternity and paternity rights (including for self-employed people)
  • Right to request a temporary change to working patterns.
  • Ten days’ paid time off a year to look after sick dependents.
  • Companies to report on results of flexible working requests

These are measures that could fit into the forthcoming Employment Bill. However, social security reform is also required, such as ensuring low-paid workers receive Statutory Sick Pay and higher Maternity Allowance payments.

Expected contents of the Employment Bill

  • The creation of a single enforcement body
  • All tips to go to workers, legislation backed up with statutory code of practice
  • Protections from redundancy for women returning from maternity leave and pregnant women
  • A right to paid leave for neonatal care- for parents of premature/unwell babies
  • A week’s leave for people with caring responsibilities that are unpaid
  • A ‘right to request’ a more predictable contract
  • Requirements on notice for shifts and payments for cancelled shifts.
  • A day one right to request flexible working – pending consultation

Strengthen trade unions

The crisis showed how workers, where they have a strong collective voice, can work with employers and governments to negotiate the gravest of situations.

Take for example the new system of safe working negotiated by Unite at aerospace giant Rolls-Royce in Derby with its 12,000-strong workforce.[1]

Or at sector-level, look at the work that Usdaw did with the British Retail Consortium on putting in place safe working practices for non-food retail stores.[2]

And on the national stage the TUC and its affiliated unions negotiated huge wage support packages that have kept millions of families out of poverty where their workplaces closed or health or caring responsibilities meant they were unable to work.[3]

The extension of individual rights, such as the right to a contract that reflects your regular hours, would be important steps forward in bringing security to previously insecure roles.

But we need more than just to raise minimum standards. And that requires an extension of workers’ collective rights.

During the pandemic trade unions and their members played a key and constructive role at workplace, sectoral and national level.

Trade unions have faced a legislative onslaught over many years, each new set of requirements making it harder for workers to organise.[4]

Yet there are no other organisations with the democratic mandate and the expertise in workplace issues to act in workers’ interests.

Organisations such as the IMF and the OECD also recognise the role of collective bargaining in reducing inequality and supporting economic growth.[5]

This isn’t news in Wales and Scotland where some notable steps have already been taken to increase unions’ role.

Wales

The Welsh Government has a track record of shielding unions and workers in the principality from some of the worst union-bashing aspects of UK government policy.

For example, it blocked some of the more extreme elements of the Trade Union Act.[6]

There have also been longstanding social partnership arrangements, including a Workforce Partnership Council for the public sector that has helped drive down use of zero hours contracts.[7]

A Fair Work Commission embedded employee voice and collective representation as a characteristic of fair work.[8]

This led to a Social Partnership, which although a victim of current circumstances is expected to resurface after the next Assembly elections.[9]

Scotland

In Scotland, a Fair Work Convention[10] published a Fair Work Framework that unions have used to push up employment standards, particularly in the public sector.[11]

And earlier this year the government published a Fair Work Action Plan which contained a commitment to promote collective bargaining.

And its Fair Work First standards will make government funding reliant on better working practices including “genuine workforce engagement”.

In recent years there has been progress towards greater collective bargaining and union presence in some sectors.

Union pressure led to a deal with employers and the government that workers in the care sector should be paid the real living wage, a stipulation that seemingly has near universal adherence.[12]

And the mechanisms that emerged from that grouping effectively created a standards organisation, including the three main unions in the sector.

This has the potential to develop into a sectoral bargaining body.

Westminster

We need the recent openness to unions in Whitehall to persist.

In the short-term that means ditching anti-union measures such extending the powers of the Certification Officer that regulates unions[13] and muddled proposals to restrict transport workers’ right to strike.[14]

The coronavirus crisis has shown the importance of establishing standards across sectors, particularly those that are weakly unionised, such as parts of the care sector.

Underpinning it all, as the TUC has previously set out, we need a new set of rights allowing trade unions to organise including:

  • Greater union access to workplaces.
  • New rights to collective bargaining.
  • Broadening the scope of collective bargaining rights to include all pay and conditions.[15]

Conclusion

As the country seeks to rebuild following the coronavirus pandemic we have a crucial opportunity to reshape our labour market.

Instead of reliance on insecure work that is bad for workers and for the economy, a sustainable recovery should be based on decent work.

As a start we need robust individual rights to rid us of zero hours contracts, stop employers misleading workers about their employment status and give workers the opportunity for true flexibility.

But longer-term government needs to recognise the positive role that unions play in the workplace and beyond.

[1] TUC (2017). “Two-thirds of zero-hours workers want jobs with guaranteed hours, TUC polling reveals”, TUC www.tuc.org.uk/news/two-thirds-zero-hours-workers-want-jobs-guaranteed-…

[2] The polling was carried out for the TUC by GQR. It was a nationally representative online survey of UK adult (16+) population who are in full-time or part-time employment. The fieldwork was carried out between 2-6 July 2017 and the total sample was 2,700 people.

[5] TUC (2017) “Great jobs with guaranteed hours,” TUC www.tuc.org.uk/research-analysis/reports/great-jobs-guaranteed-hours

[1] TUC (2017). Trade Union Act 2016: a TUC guide for union reps, TUC www.tuc.org.uk/research-analysis/reports/trade-union-act-2016-tuc-guide-union-reps

[3] Creagh, M (2019). “10 takeaways from the Labour Market Enforcement Strategy 2019/2020”, TUC www.tuc.org.uk/blogs/10-takeaways-labour-market-enforcement-strategy-20192020

[4] Brewer, M, Gardiner, L (2020). Return to Sender, Resolution Foundation, www.resolutionfoundation.org/publications/return-to-spender

[5] BBC (2020). “Closing furlough 'could lead to 10% unemployment’”, BBC www.bbc.co.uk/news/business-53564388

[7] For example, Kessler, I et al (2020), Fair care work: A post Covid-19 agenda for integrated employment

[8] Booth, R (2020) “Agency staff were spreading Covid-19 between care homes, PHE found in April,” The Guardian, www.theguardian.com/world/2020/may/18/agency-staff-were-spreading-covid-19-between-care-homes-phe-found-in-april

[9] Brewer, M, Gardiner, L (2020). Return to Sender, Resolution Foundation, www.resolutionfoundation.org/publications/return-to-spender

[10] Andrew, A. et al (202) “How are mothers and fathers balancing work and family under lockdown”, IFS, www.ifs.org.uk/publications/14860

[11] Prime Minister’s Office (2019). Queen’s Speech background briefing notes, Prime Minister’s Office www.gov.uk/government/publications/queens-speech-december-2019-background-briefing-notes

[13] Sharp, T (2019). “Cancelled shift compensation won't end the injustice of life on a zero-hours contract” TUC, www.tuc.org.uk/blogs/cancelled-shift-compensation-wont-end-injustice-life-zero-hours-contract

[1] Unite (2020) “Rolls-Royce coronavirus package puts safety centre stage, says Unite”, Unite www.unitetheunion.org/news-events/news/2020/april/rolls-royce-coronavirus-package-puts-health-safety-centre-stage-says-unite/

[2] Usdaw (2020) “Usdaw and BRC working together on how the retail sector can be safely brought out of lockdown”, Usdaw www.usdaw.org.uk/About-Us/News/2020/May/Usdaw-and-BRC-working-together-on-how-the-retail-s

[3] Sharp, T (2020). “Coronavirus job scheme gives bosses range of options” TUC www.tuc.org.uk/blogs/coronavirus-job-scheme-gives-bosses-range-options

[4] TUC (2017)

[5] OECD (2018)

[6] Trade Union (Wales) Act 2017

[9] Allen, J (2020) “Next steps for Social Partnership in Wales” TUC www.tuc.org.uk/blogs/next-steps-social-partnership-wales

[12] Chapman, L. (2020) “A real living wage for care workers”, Mirror www.livingwage.org.uk/news/real-living-wage-care-workers

[13] Arthur, R (2016), “Certification Officer”, Thompson Solicitors, www.thompsonstradeunion.law/news/lelr/bi-annual-lelr-autumn-2016-138/certification-officer

[14] Lezard, T (2020), “Unions gear up to fight transport strike restrictions”, Union News www.union-news.co.uk/unions-gear-up-to-fight-public-transport-strike-restrictions/

[15] TUC (2019), A stronger voice for workers, TUC /www.tuc.org.uk/research-analysis/reports/stronger-voice-workers