Written evidence from Community union (WOW 74)

Community is a trade union representing workers in the iron and steel, domestic appliance manufacturing, clothing, textiles, footwear, justice, road transport, betting and gaming and call centre sectors as well as self-employed workers, workers in voluntary organisations, workshops for visually impaired and disabled people, community-care providers and housing associations. Community also has members in Deliveroo, Uber, Hermes and Yodel.

The Future World of Work and the Rights of Workers

Representation of self-employed and freelance workers by trade unions isn’t new. In many sectors such as construction, broadcasting and journalism – self-employed trade union members have been at the centre of union activity and have shaped their respective industries.

Unions have been able to recruit and organise self-employed workers in these sectors mainly because of the collective bargaining arrangements and wider sectoral arrangements that exist. This has enabled unions to not only represent workers directly on issues that interest their members working in these sectors but to negotiate on pay and conditions.

However, the majority of self-employed and freelance workers have no exposure to trade unions at work. They also have very little engagement with people with similar working arrangements, concerns or aspirations and we face rapidly growing numbers working this way.

More than one in five workers, some 7.1 million people (according to the FT), now face precarious working conditions that mean they could lose their work suddenly. This has increased from 5.3 million in 2006, according to analysis of official figures by John Philpott. Half of self-employed workers earn low pay and take home less than the two-thirds of the median earnings, according to the Resolution Foundation. Two million self-employed people now earn below £8 an hour.

750,000 more people are on zero-hours contracts than in 2006 and 207,000 more people are working as temps since 2006.

Companies such as Uber, Hermes and Deliveroo rely on 4.7 million ‘self-employed’ workers.

Over 10,000 people called the Acas minimum wage helpline in the five months to September concerned they were not receiving the statutory minimum – a 73% increase on the same period last year, according to the Guardian.

The UK has a greater proportion of full-time employees in low pay than all but seven of the 22 developed nations in the OECD.

Worryingly, self-employed families are more likely to live in poverty, with a median income of £209 a week against £384 for employees, according to Ashwin Kumar, Chief Economist at the Joseph Rowntree Foundation.

There’s no doubt that in many cases self-employment or freelance working creates more opportunities, encourages transparency, flexibility and innovation and we should not look to inhibit innovation or take away from the benefits that consumers get as a result of this innovation. We should also not assume that all companies are exploitative. There is a balance to strike that encourages innovation, meets the needs of consumers and is fair to workers. In our view work must work for everyone and it must be fair.

However the precarious nature of this type of work demands that these workers have a voice – not just at workplace level but on issues that impact their lives and those of their families beyond work.

To achieve this, trade unions must rethink the way that we work as some companies participating in the ‘gig’ economy already have. Traditional trade union models and structures may not survive the changing world of work and even if they do, they may not be the most effective or even right way to keep achieving the best for workers. It is likely to be a mix of traditional and new ways of working and to establish the new way forward it is crucial that trade unions go back to the essence of why they were established: collective power.

Some trade unions are already doing it but government should look to support workers in new ways and cooperative models. There is clearly a role for trade unions to support and empower these workers to organise as is happening in companies such as Sports Direct and Pizza Express where unions are creating change out with the traditional models. Community worked with members in Simclar Intl Ltd to win Employment Tribunal Awards working with local MSPs and won awards totalling £1.1m for members despite not being the recognised trade union. Another example was the creation of the Safe Betting Alliance in partnership with the Association of British Bookmakers, Metropolitan Police, local authorities and the Institute of Conflict Management to design a set of minimum standards to keep betting staff safe. Official police records now show that betting shops have among the lowest levels of crime compared to other high street retail sectors.

However, just pointing out the problems or concerns around working independently isn’t enough – trade unions need to recognise that working this way – whilst not always a choice – isn’t solved by saying that everyone needs to be directly employed and involved in a rigid employment relationship with an employer.

Of course many of these workers want better conditions and more rights at work but our members tell us that they also want flexibility and a say on what flexibility looks like. The answer then, won’t always be to enforce ‘employee status’ on companies like Uber but to look at alternative policy solutions to the way that work is set up and operates in the UK.

The ‘gig’ economy has deconstructed everything that we understand about work and roles within it. We must deconstruct everything that we understand about work and the tax systems, legislation and everything society has created to support it.

Policy solutions

Encouraging collaboration and innovation

It can be a lonely experience working on your own at home or in a coffee shop. Community has been working with a Welsh based cooperative called IndyCube who have established over 30 co-working spaces in Wales over the last six years. IndyCube brings empty office and retail spaces to life by providing a working environment – desks, refreshments and meeting space all organised through their online payment platform where users can book desk-space as required – a day, a week, a month and longer. This approach brings benefits to all involved. As a cooperative, members have a say and any surplus goes back into proving a better service for users. The users not only can collaborate in a business environment they are also in a real, live working environment. Property owners receive an income and of course once empty offices and other spaces are buzzing with work. Our next stage is to develop a trade union and cooperative partnership which bring both space and trade union membership to the users. This partnership will aim to increase the number of spaces available to users right across the UK – expanding the self-employed and freelance network of users and organising them into a collective group with a voice on the issues that matter to them.

Government and local authorities can do more to support innovation like this – for example incentivising the use of redundant space by expanding business rate support to encourage co-working would move people from their bedrooms and kitchen tables into disused shops and offices.

Of course it’s not just the office environment that could benefit from this type of approach – co-making facilities with shared manufacturing equipment are also in demand and encouraging workers from their garages into shared factory space would bring all the same benefits that shared office space does and inject life into redundant industrial space across the UK.

Collaborative relationships with trade unions

The government should look to work collaboratively with the trade union movement rather than against it by enforcing legislation that puts trade unions on the back foot. Evidence shows that many of our most productive industries such as the automotive industry or the aerospace industry have high levels of union membership, high levels of employee engagement and high levels of productivity. To navigate this new ‘gig’ economy government and employers will need engaged employees that help make sense of how to make work fair for everyone.

As the private sector and the ‘gig’ economy grow the trade union movement must do what is necessary to reach out to these workers and government must not repeat the mistakes it has made with its industrial relations in the public sector. It has no responsibility as an employer and so there is no reason why it cannot act as a broker, a coordinator and even a driver of better conditions for working people.

Legislation regarding trade unions can and should be done in partnership with trade unions to achieve strong, representative, and modern trade unions with high levels of engagement, constructive working relationships and shared missions. This requires the entire trade union movement to modernise and develop its decision making structures through implementation of electronic balloting and support of government to do so.

A Ghent system to support the self-employed?

Rights at work are more defined for those in mainstream employment, and regularly act as a floor – with many decent employers going beyond the statutory minimum in areas such as maternity pay, paternity leave, adoption leave and holidays.

Given the expected rise in self-employment, it’s clear that the statutory minimum level of social protection is not sufficient both for the individuals and the economy – particularly for those with greater insecure working arrangements in the ‘gig’ economy.

In the US, the Freelancers Union has established itself by providing a range of work-related packages which support self-employed workers both in and out of work such as health, disability and life insurance.

Scandinavian countries – as part of their social contract – utilise the Ghent system. The Ghent system is an arrangement where the main responsibility for welfare payments is held by trade unions rather than a government agency. It is the predominant form of unemployment benefit in Denmark, Finland, Iceland and Sweden. Belgium has a hybrid or ‘quasi-Ghent’ system, in which the government also plays a significant role in distributing benefits. In all of these countries, unemployment funds held by unions or federations are regulated and/or partly subsidised by the respective national government.

By all international standards these are economies that perform well, are more equal and provide a better quality of life for their inhabitants.

A similar approach in the UK – a powerful combination of government support supplemented with benefits administered by trade unions would be a significant step towards supporting self-employed workers.

The original Ghent system focuses on out of work support but a reinvigorated system here in the UK could go much further with trade unions providing increased support and administering areas such as maternity leave, sick pay and paid time off for training.

Driving up standards across self-employment and freelancing

The perception that these new models of work are exploitative is gaining traction and there needs to be a mechanism to inject objectivity, fairness and transparency into this area of work. The high profile GMB case against Uber has shown a system being pushed to its limits.

To address this, the government should consider establishing a new commission on self-employment or examine the possibility of expanding the remit of UKCES to specifically address the issue of standards across the self-employed community.

A commission of this nature could act as a clearing house – ensuring that people are genuinely self-employed, designing and promoting a code of best practice across the platform economy and ensuring that workers are treated fairly and within the law.

December 2016