Category Archives: Brexit

Why so-called ‘Barista Visas’ won’t help UK Hospitality Workers

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Matthew Cole

Home Secretary Amber Rudd has recently introduced the idea of a so-called ‘barista visa’, undoubtedly to militate against the potentially disastrous effects of Brexit for UK businesses. The proposal was suggested by Lord Green, chairman of the right-wing think tank Migration Watch UK, who claimed it would, “kill two birds with one stone” by meeting employer needs while “maintaining links with the EU”. By links, he must have meant links to a highly exploitable workforce with no rights. The ‘barista visa’ would allow young European citizens to migrate to the UK and work in the hospitality industry for up to 2 years; however, it would deny them access to benefits, schooling, housing or any possibility of extending their stay. The proposed visa would be modelled on the Tier 5 (youth mobility scheme) visa, which currently allows 18-to-30-year-olds with at least £1,890 in savings from non-E.U. countries such as Australia, Canada, New Zealand, South Korea, and Taiwan to work in the U.K. for up to 24 months. Despite the government’s optimism, the ‘barista visa’ would not only fail to offer adequate solutions to Brexit, it would exacerbate issues in the industry for both employer and employees.

The hospitality industry (including hotels, bars, cafes and restaurants) makes a significant contribution to the UK economy. The industry added an estimated £57 billion to the economy in 2014, roughly 4% of GDP and it employs around 3 million people in the UK.  Since 2011, it has grown by 13%, more than double the employment growth of the economy overall. Yet in the context of this dramatic growth, working conditions remain poor. Average gross earnings for full-time workers in the hotel industry are the lowest in the UK and the industry has the highest incidence of low-paid workers. Added to this is its dubious status as one of the least unionised sector of the economy.

Today, the hospitality industry is experiencing increasing instability and pressure as a result of Brexit. Britain leaving the EU will no doubt have serious and lasting impacts on the UK labour market and workers rights. According to the ONS, E.U. nationals make up 7% (2.2 million) of Britain’s total labour market of 30.3 million. However, some industries will be more affected than others and the hospitality – with over 60,000 workers per annum working in this sector – is likely to be one of those feeling the impact of the referendum result. A report by KPMG indicates that hospitality is the largest business sector employer of EU nationals as a proportion of total workforce. Hotels and restaurants employ the highest percentage of EU migrants with certain roles such as waiters and waitresses (75.3% EU nationals), housekeeping staff and chefs representing a particularly high portion of migrants. Based on current projections, the absence of an annual inflow of new EU migrants into the hospitality industry each year would generate a significant recruitment gap, which would increase over time.

Despite it’s moniker the ‘barista visa’ scheme would fail from a business standpoint .The two-year limit alone is reason enough to anticipate this, since it forecloses incentives for training and retaining workers in an industry that is experiencing serious problems with skill shortages and turnover. According to People 1st, turnover in the hospitality industry is estimated at 20 per cent, while the KPMG survey of BHA members puts the estimate even higher, at 50.2 per cent. This costs the industry approximately £274 million annually. The Financial Times, reported that the ‘barista visa’ would also be open to other sectors that are heavily reliant on low-wage migrant labour, such as social care, agriculture, and construction. While the numbers of migrants for each industry will be restricted with an overall cap, there is no guarantee that there would be enough EU migrants who meet the proposed criteria and aim to work in hospitality. Last year, The Times reported that only 40,000 people applied on the existing Tier 5 youth mobility scheme for all industries. This is 20,000 less than the number of EU migrants who gained employment in the hospitality industry alone. Given the strict criteria of the ‘barista visa’ and the fact that the hospitality industry is expanding rapidly the number of EU migrants is likely to fall woefully short of the needs of employers. Combine this with low wages and the rising anti-migrant rhetoric of mainstream political parties and the situation looks dire indeed.

To attempt to lessen the impact of Brexit, BHA members have petitioned the government to retain EU workers and openness for tourism. They recognise how important migrant labour is for their businesses even if they have not necessarily recognised the rights and economic rights of migrants as a whole. The BHA’s focus on the business case for hospitality ignores the concerns of most of its labour force. Historically, they have opposed legislation designed to protect workers’ interests such as the minimum wage legislation in 1999 and tips legislation in 2009. They have also avoided addressing criticisms from trade unionists about issues in the industry. Last year, Unite regional officer Dave Turnbull offered a different explanation of why the industry cannot recruit and retain the type of workers it needs. He cited a fundamentally “flawed, low cost and exploitative business model” in an industry where “low pay, insecure working, exploitation and institutionalised bullying are rife”[1]. The ‘barista visa’ will only exacerbate these problems. It would further entrench divisions in the labour market and further undermine the collective rights of workers. The scheme denies migrants a social safety net and offers no chance to progress in a career or build a life in the U.K. long-term.

The ‘barista visa’ also fails from a worker’s perspective. Labour Force data shows EU nationals are already concentrated in low-paid and lower-level occupations, especially in the hospitality industry. As of 2016, less than 1% of EU nationals in the hospitality industry were employed in the ‘higher managerial and professional’ occupation grouping. The current state of UK labour law weaves issues of migrant rights into the employment relationship, leaving open the potential for employers to terminate their contract which could effectively leave them exposed to deportation. The ‘barista visa’ ultimately will keep EU migrants in a legally subordinate position to nationals, exacerbating the ‘migrant division of labour’[2] and further undermining all working conditions. The further precarisation of migrant labourers in the hospitality industry will at best allow business owners to continue exploitative practices and at worst, further divide workers.

[1] Unite, 2016. Unite in direct plea to London mayor to tackle exploitative work practices in London’s hotel industry. Press Release. http://www.unitetheunion.org/news/unite-in-direct-plea-to-london-mayor-to-tackle-exploitative-work-practices-in-londons-hotel-industry/

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Brexit and worker’s rights: should workers and trade unions be concerned?

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Dr Liz Oliver

Brexit creates uncertainty for important employment rights. Very many of the employment rights that have come to be expected as part of an employment relationship in the UK derive from EU law. Should the UK no longer be obliged to maintain these as part of its obligations under whatever relationship it has to the EU, then their future becomes much less certain. Could, on the other hand, Brexit create an opportunity for employment rights? An opportunity to re-think the way that employment law and other forms of regulation (such as collective bargaining) work together in a way that suits the economy in UK and responds to the national and global challenges that workers face? The answer to that question very much depends on the opportunity for an open and informed democratic debate. Whilst the Government is making assurances about protecting the workers’ rights, the mechanism by which it is doing this – ‘a Great Repeal Bill’ – potentially contains a back door through which such provisions could be readily amended or repealed without the full scrutiny of Parliament. Unfortunately therefore both workers and trade unions are right to be concerned.

What is at stake?

The impact of EU law on employment in the UK reaches far and wide, encompassing equality legislation; pregnancy; maternity and parental leave; paid holiday; employee rights in the context of insolvency; collective consultation in the context of redundancy to name but a few areas. Others have mapped this in great detail.

The impact of Brexit on this body of workers’ rights depends on two main contingencies;

  • the nature of the future relationship with the EU and
  • the political climate with regard to employment regulation at national level

It seems unlikely that the UK’s future relationship with the EU will entail obligations in the area of employment and other social law but much remains to be seen. As details of the Prime Minister’s negotiating strategy emerge in particular the intention to leave the single market and customs union and not to contemplate existing models such as ‘the Norway option’ which would entail continued membership of the European Economic Area. It becomes clearer that the overriding goal is for the UK’s future relationship with the EU to entail minimal to non-existent obligations. Nevertheless much remains to be seen. The Prime Minister’s speech and the subsequent white paper set out her unilateral intentions ahead of the negotiation with the other Member States of the EU. As such, it is aspirational and projects an intention for Theresa May to have her cake and eat it too. Any concessions around key objectives such as the “greatest possible access” to the single market and “tariff-free trade with Europe and cross-border trade there to be as frictionless as possible” will come with considerable strings attached.

In terms of the political climate with regard to employment regulation, the picture here is mixed. The current Government has not taken the overtly deregulatory stance of the Coalition Government or previous Conservative Government and the Prime Minister and her government have made assurances about protecting workers rights. Nevertheless concrete legal steps to ensure that current standards are maintained are lacking. Of particular significance is the distribution of power between the Executive (Government) and Parliament in decision making in the area of employment law. This important matter will shape extent to which matters of employment law will be opened up to democratic debate.

To what extent will worker’s rights be protected and maintained through the Brexit process and beyond?

The EU law that is relevant to employment takes different forms and takes effect at national level in different ways. Whilst some employment law derived from the EU can be found in Acts of Parliament (primary law) other provisions have been transposed using secondary legislation based on the European Communities Act 1972 and others still take effect automatically because they are directly applicable (The European Communities Act 1972 allows such provisions to have effect without further enactment).

Brexit poses two types of issues 1) technical issues about the form and function of different provisions and 2) issues of substance about what role employment law should take within the UK.  As the discussion below will show. The two issues interrelate.

Following the referendum result some called for a repeal of the European Communities Act 1972 (in order to ‘undo’ EU law), but it was clear that that position would be unworkable. The Prime Minister has instead announced a bridging mechanism in the form of a ‘Great Repeal Bill’ which will repeal the European Communities Act 1972 and transpose existing EU law into national law. The Government’s white paper on the UK’s exit from the EU contains assurances about worker’s rights:

“The Great Repeal Bill will maintain the protections and standards that benefit workers. Moreover, this Government has committed not only to safeguard the rights of workers set out in European legislation, but to enhance them”

On the one hand this looks like a sensible idea. It maintains legal certainly and potentially opens up a space to review what provisions to keep and whether or how to change or remove them. But an important question is who gets to make these decisions. Will it be Parliament or will it be the Government?

Constitutional lawyers have identified the proposed use of enabling provisions within Great Repeal Bill as a stumbling block to achieving enhanced Parliamentary sovereignty. The Department for Exiting the European Union’s announcement states “The Repeal Bill will include powers for ministers to make some changes by secondary legislation, giving the Government the flexibility to take account of the negotiations with the EU as they proceed.” Such enabling provisions may give ministers the power to amend or repeal former EU law based on the Great Repeal Act using ‘light touch’ secondary legislation. Of particular concern are so called ‘Henry VIII’ clauses which would allow for the repeal of primary law without further Parliamentary scrutiny, these could open up employment law that is already enacted by Acts of Parliament to amendment or repeal. It raises concerns that the ‘back door’ is left open for the Government to make significant changes to employment law without full debate or scrutiny. The scope and exercise of such powers will delineate the potential for Parliamentary (democratic) debate about what employment standards are expected by workers and employers within the UK.

The size and shape of the ‘back door’ is yet to be seen but talking about assurances that the Government has given on worker’s rights one legal expert notes

“There’s a definite “fox in charge of the henhouse” vibe here – quite literally so, if we remind ourselves of cabinet minister Liam Fox’s attitude to EU employment regulation”.

Workers and trade unions are right to be concerned and to seek legal mechanisms to guarantee employment rights.

Attempts to assure worker’s rights

Labour MP Melanie Onn introduced a private members Bill ‘The Workers’ Rights (Maintenance of EU Standards) Bill’ as an attempt to ensure that the current legal regime remains in place, however this was ‘talked out’ of Parliament on Friday (13th January).

Several amendments to the ‘Article 50 Bill’ (European Union (Notification of Withdrawal) Bill 2016-17) seeking to protect employment law were tabled. These took different forms, some sought to ensure  that the Prime Minister have regard to the public interest in existing social rights and others sought to ensure that current provisions are maintained and that Parliament has full scrutiny of any proposed changes to primary and secondary law. None of these amendments have held.

My view

Whilst some have argued that the removal of key employment protections that derive from EU law would be ‘politically unthinkable’ others argue that it would be ‘naïve’ to assume that any of the rights derived from EU law would be immune from repeal. It is my view is that a government with a deregulatory agenda can make important changes to employment law that are far reaching yet subtle, even where whole-sale deregulation would be politically unworkable (see previous blog post). The use of Henry VIII clauses within the proposed ‘Great Repeal Act’ could facilitate far-reaching changes without commensurate democratic debate. Employment law is complicated stuff, nothing short of a full and open democratic debate can support its appropriate reform. The Brexit domain is a million miles from this.