The focus of this week has been the Prime Minister’s meetings in Belfast and Brussels, but for the business community uncertainty continues to prevail. The week started with Nissan confirming that they would build the new X-Trail model in Japan rather than Washington, with almost 1,000 new jobs on Tyne & Wear axed. In an indication of the wider malaise affecting our economy, the Bank of England downgraded the annual growth target to 1.2%, blaming “weakening global growth and the intensification of Brexit uncertainties” while confirming business investment has unsurprisingly also fallen. We also saw the outsourcing company Interserve step back from the brink. The company’s suppliers are owed £799m and there is a pensions deficit of £48m, yet £37m was paid in dividends to shareholders of the loss-making firm last year.
When I ran a company, we observed the maxim that we “do things right, as well as do the right thing”. Despite the values companies lay claim to in their annual reports, the work of corporate responsibility teams and a corporate governance code that is supposed to govern the behaviour of UK listed companies, too many firms put wealth extraction before their responsibility to employees and pensioners. It’s why John McDonnell’s radical proposals for greater worker representation on company boards and employees being handed a financial stake in companies is overdue.
Nowhere is the disconnect between shareholder interests and employee interests more apparent than in the gig economy. Cars must be on standby; food must be delivered piping hot; parcels arrive in the agreed window. Yet for Uber, Deliveroo and DPD to meet these expectations, the risk is shouldered by employees – not the employer. Often this means exploiting people through zero-hours contracts, keeping them waiting until needed, tracking their movements and penalising them for failing to meet the expectations of consumers.
In the week that Jeremy Corbyn reaffirmed Labour’s commitment to a real living wage, which would make a £2,600 annual difference to the low paid, it is a sad indictment that the 1.5 million people working in the gig economy will not benefit. If you’re paid per job rather than per hour, the minimum wage doesn’t apply – and you’re probably earning less than the legal minimum as a result.
Clearly this government isn’t in a hurry to make a difference either. It took the Prime Minister sixteen months to agree to adopt findings in the Matthew Taylor Review. That’s sixteen months in which agency workers have continued to be paid less than permanent staff; sixteen months in which those on zero-hours contracts couldn’t request guaranteed hours; and a sixteen-month delay to introducing urgently needed legislation to bring tax and employment laws for employees and the self-employed into alignment. For another sixteen months, the government has once again failed to act on behalf of people whose lives are defined by insecurity, exploitative bosses, and a lack of protection.
As the global economy changes, the labour market is changing too. Our trade unions must rise to the challenge, especially because employment rights and protections are absent for those working in the gig economy. Occasionally, though, we see an example of a business that really does put people first, thinks about what it needs to do to retain talent and invests in its workforce. This week we saw the GMB strike a deal with Hermes couriers. Drivers taking “self-employed plus” status will receive holiday pay, negotiated pay rates and union representation. Whilst successive Tory governments have made it harder for unions to recruit, organise, negotiate, represent and campaign, the partnership between GMB and Hermes is exactly the kind of modern-day thinking needed to protect employees. It took a CEO and a general secretary with vision to negotiate this collective bargaining agreement, offering a win-win-win: for workers, for Hermes and for the GMB. It’s a deal to be applauded, and it’s got to be the first of a pioneering new approach.
Gig economy companies know they are on notice, and that as a movement we will not just stand in solidarity with workers but fight for them. When Labour develops its manifesto for the next election, we must legislate so companies in the gig economy pay their staff a real minimum wage, offer sick and holiday pay and guarantee minimum hours. They can either be dragged there, or they can take a responsible approach and realise it makes sound commercial sense to work co-operatively and collaboratively with their workforce. I hope many will follow the leadership of Hermes and the GMB.