Brexit Britain will be a bonfire of workers rights – the Deliveroo and Sports Direct struggles are just the beginning

Our employment rights face the threat of being thrown overboard in order to refloat the UK’s sinking post-Brexit economy

Kirsty Major
Tuesday 16 August 2016 15:25
The Deliveroo pay dispute is a symptom of a wider power shift in favour of employers
The Deliveroo pay dispute is a symptom of a wider power shift in favour of employers

Since the financial crash in 2008, British businesses in have been accelerating in the race to the bottom for workers’ rights, seeking ever-cheaper labour costs through the use of zero-hours contracts and precarious self-employment arrangements. The nature of these contracts – no guarantee of hours worked or redundancy payments, no costs to employers if staff become sick or pregnant, no requirement to commit to a staff pension plan – meant that bosses could pass the risk of a drop in demand, or a rise in their costs, on to shoulders of workers rather than their own bottom line.

Yet this month’s victories for the workers at Deliveroo and Sports Direct have offered a small relief from the funeral march for the social safety net and living standards we’ve grown to expect.

Deliveroo pay protest

Drivers for the food delivery service Deliveroo have been protesting against a new scheme set to be introduced by the company under which drivers would be paid per delivery, rather than a set hourly rate plus a £1 delivery fee. In return the firm has offered that the new payment scheme will be voluntary, and that employees will be guaranteed at least £7.50 an hour, plus petrol expenses and a share of tips at peak times.

The Department for Business, Energy and Industrial Strategy confirmed that employees must be paid the National Living Wage of £7.20 an hour unless they had been certified by a court as self-employed. The workers spoke, and the state listened and it backed their case.

Meanwhile, the Derbyshire Sports Direct warehouse at the centre of the controversy over the company’s employment practices has secured an estimated back payment of £1m to recompense staff who were paid below the minimum wage. Time-consuming security checks at the end of shifts had led to staff effectively being paid less than they were entitled to, according to a Commons select committee into the companies working conditions.

So surely is this time for a celebration of the resurgent power of the workers’ collective voice? Not quite yet. The Deliveroo strike continues, as drivers in the capital demand the right to be paid the higher London Living Wage of £9.40 an hour, a reasonable request considering the capital's extortionate rents and living costs. And the Sports Direct saga rumbles on too, as papers are filed with the High Court over the exclusion of 188 workers from the company’s bonus scheme. Meanwhile, legal action has commenced between Uber and 19 of its drivers in their long-running dispute over the right to be recognised as staff, not contract workers.

The bad news is that things are only likely to get worse following the UK’s decision to leave the European Union. A report by the Resolution Foundation think tank concludes that, while a cut in inward migration is likely to deliver a small pay boost for some low-paid British workers, that benefit will be immediately undermined by the weakening of overall wage growth forecast by the Bank of England.

The report also found that a tighter post-Brexit immigration system would lead to a rise in temporary non-British workers, increasing the risk of migrants overstaying their visas and becoming vulnerable to the demand for underpaid and exploitative black market labour, which would have the effect of driving down wages for British workers in the long run. Nobody is winning in this game – apart from employers, whose labour costs just keep on shrinking.

In a post-Brexit Britain, a culture of cheap and flexible labour practices no longer subject to EU employment rights will be used as leverage in post-Brexit trade deals. This would mean that EU regulations such as TUPE (Transfer of Undertakings Regulations) – the law which is allowing some of the 188 Sports Direct workers to claim back their missed bonuses – would be trashed in order to increase the competitiveness of UK business.

It seems that there is little incentive on the side of the Government to halt this race to the bottom, as Theresa May fails to match words with actions. Despite the new Prime Minister’s rhetoric about fostering “responsible capitalism” and to stop the “growing gap between what these companies pay their workers and what they pay their bosses”, the Employment Agency Standards Inspectorate (EAS) –the body tasked with protecting vulnerable workers – has had half of its funding cut. Worse still, May’s new head of policy, George Freeman, previously developed plans to cut employment rights and wages in poorer areas.

All signs suggest that the growing insecurity of the labour market, which began back in 2008, will likely worsen after Article 50 is triggered. Workers’ rights to healthcare, a reliable pension and job security during their working years, values and benefits which we used to hold as sacrosanct, now are under threat of being thrown overboard in order to refloat the UK’s sinking economy. Keep an eye on the battles of Deliveroo, Sports Direct and Uber workers; they might be fighting for more than just their own futures.

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