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Wednesday 21st
posted by Morning Star in Features

KAREN WILLIAMS and JEAN JENKINS outline the problems of so-called ‘flexible’ employment contracts which only benefit the bosses

IN THE second decade of the 21st century, against a backdrop of austerity policies and attacks on public services, a new global elite flourishes while millions of workers exist from day to day in conditions of precarious employment and financial insecurity.

On the international stage it has become plain that paid work outside the home is no guarantee of the longer-term economic and social upgrading of the worker. 

In Britain, current research shows us that alongside the ills of unemployment, in-work poverty is now a significant feature of contemporary society. Yet, in theory, and according to sections of the popular media which demonise those forced onto welfare benefits, work is a pathway to social inclusion, to individual dignity, to a better income and a better life. 

It should be so, but the emancipatory capacity of work is no longer a given, particularly for those trapped in low-skilled, low-paid employment. 

In this context, it is not only the quality of the jobs themselves but also the way they are structured and organised that is at issue, as unpredictable patterns and hours of work compound the problems faced by the low-paid. 

Today, the Welsh economy is dominated by the service sector, with manufacturing employment in Wales now comprising just 11 per cent of all workforce jobs. The earnings of the Welsh worker are on average around 88 per cent of those enjoyed across Britain generally. 

While public and private-sector services provide a range of employment prospects, and there is consistent rhetoric about the need to generate higher skilled, more secure and better paid jobs in Wales, it remains generally the case that (even were the working population suitably trained) the number of opportunities for high skilled and high paid employment is limited. 

Service-sector employment in Wales (as elsewhere in Britain) is dominated by social care, retail and hospitality, where work and workers — very often female workers — are classed as low-skilled, are low-paid and, ultimately, a disposable resource.

Much of this sort of service-sector employment is offered in varying packages of part-time work. Employee-driven, regular and reliable part-time working is to be valued, but we know that, increasingly, this is not the sort of part-time package that workers are being offered in the labour market. 

Rather than being a means of flexible working driven by workers’ needs, part-time working arrangements are market-focused attempts to accommodate organisational needs for 24/7 cover at minimum cost. 

Thus it is that surveys and research by the Joseph Rowntree Foundation, IPPR, the Wales Institute for Social and Economic Research Data, the Bevan Foundation, the TUC, ONS, and various academics have consistently exposed the association between part-time working, underemployment and unsustainable wages. 

We know that a significant proportion of those corralled into part-time work are likely to be seeking longer working hours, and that they are unable to subsist without the assistance of in-work welfare benefits.

To add to the privations of low-paid part-time work, there are clear trends in the casualisation of work through employers’ use of “contracts with no guaranteed minimum hours,” to use the definition adopted by the Office for National Statistics (ONS) in a 2014 report. In popular parlance we have come to know such arrangements as zero-hours contracts, but this term fails to fully reflect the range of contractual forms, including bogus self-employment. 

Such contracts treat the worker as a dispensable commodity, easily picked up and put down. Changes to working patterns are occurring in real time, even mid-shift, particularly in the retail and hospitality sectors, underscoring the arbitrary nature of work in such environments. 

The scope for the assignment of work through managerial favouritism (or intimidation) is clear, with all the attendant implications for workplace stress, unfair discrimination and the nullification of both the principle and practice of equal opportunity. 

The ONS report noted that at least 1.4 million workers in Britain and Northern Ireland now work to contracts with no guaranteed minimum hours, a figure that — by the report’s own admission — probably significantly under-reports the exact figure.

A contract with no guaranteed minimum hours is one where mutuality of responsibility — by employer and employed — is negated. The unpredictability and precariousness of such forms of employment is linked with limited worker access to sustainable earnings, training and collective representation, and reduces any realistic prospects of social mobility through paid work. 

Such contractual arrangements also complicate the status of the employed person, distancing them from the possibility of accruing contractual privileges or statutory employment rights at some point in the future. 

By definition, this is a contractual device which isolates the individual worker and offloads all the risk of flexibility onto the shoulders of the very person who, already low paid, is least-equipped to accommodate fluctuations in hours and earnings. 

While under this model of employment the employer gains a “flexible” workforce with minimal obligation to care for their needs, the workers can expect only limited, if any, advancement through work, and at the most basic level are unable to forecast their earnings from week to week because they cannot rely on a whole day’s work — or even a whole working shift.

It is in this context that in 2015 the “working poor” in Wales and the rest of Britain are increasing in number. The associated implications for the state and public finances are serious, as welfare benefits are needed to supplement the incomes of workers through tax credits and benefits. 

The state, in effect, is subsidising low-paying employers who offer contractual terms which provide neither security of employment nor predictability of earnings for their workers, nor tax returns for the state. 

It is all the more shameful when such forms of employment contaminate public-sector provision through the privatisation and outsourcing of services like social care, all of which are coming under increasing pressure during this time of austerity and cutbacks.

It is to be hoped that the Welsh government’s decision, in June 2014, to adopt the two-tier workforce code, will begin to realise the “power of procurement,” to use the words of the recent Smith Institute report Making Work Better: An Agenda for Government. 

The report praised the code as an example for other regions of Britain to emulate in setting higher employment standards for public-service provision. This move by Wales’s policy makers is, we feel, significant in engaging with the problem of no guaranteed hours, and being imaginative and unafraid in challenging the business model that underpins it.

The zero-hours contract, in all its many forms, embodies the abandonment of any conception of the worker as a citizen with legitimate rights and aspirations, or individual needs beyond bare subsistence. 

It seems that in the brave new world of 21st century employment, the neoliberal rhetoric of market imperatives is leading us backwards to the days of the sliding scale, whereby miners’ wages were tied to the price of coal rather than a living wage. 

In our more recent preoccupation with what the disembodied market demands, we appear to have lost our commitment to what a worker should be able to expect. In 2015, Wales needs an industrial strategy which finds a route to better jobs, but this is clearly a longer-term endeavour. 

In the meantime, as strategies for growth and prosperity take form, public policy needs to reconstruct the image of the worker as a person with the right to organise collectively, to have a voice in the employment relationship, to see opportunities for social mobility and to be more than just another commodity in the marketplace. 

The rise of new forms of exploitative employment show that decent conditions are never guaranteed and that the increasing power of employers in the marketplace needs to be counterbalanced by vigorous state policy-making and trade union action to ensure that working people are recognised and treated as human beings with basic rights in the workplace as well as in the wider society.

Fair pay and dignity in employment relies on fair contractual terms for all workers. In building our future society and ideas of what work should be, we in Wales should not be afraid to champion this cause.

Karen Williams is an associate professor at the School of Management, Swansea University.

Jean Jenkins is a senior lecturer at Cardiff Business School, Cardiff University.