Tag Archives: Centre for Employment Relations Innovation and Change

Steel in Crisis: Restructuring for People

ChrisMacpicture
Chris McLachlan, Leeds University Business School.

The construction of an industrial strategy for UK steel is essential. Within the debate over this requirement and as part of its development, it is important to have an understanding of what happens at plant level when restructuring and redundancy occur. A plant that is of key focus in the current steel crisis is Tata Steel’s long products site in Scunthorpe. The plant has undergone successive restructuring processes in recent years, with ‘Project Ark’ in 2011, ‘Path to Profit’ in 2013, and now the decision to sell the long products division.

Some 2,600 job losses have been announced over this 4 year period, which leaves the Scunthorpe site with approximately 3,000 employees. Since the divestment decision the security of the entire site has been under threat. The recent announcement of the potential sale of the long products division to UK based investment firm Greybull Capital provides hope for the Scunthorpe site, but for its employees a worrying period of uncertainty remains. This contraction of the UK steel industry workforce has, of course, been in train since the 1980s. Amidst the prevailing industrial context, the recent bout of restructuring is having profoundly negative effects on not only the lives and careers of individuals but also the communities affected by the restructuring. Banners at recent Save Our Steel events in Scunthorpe and Sheffield simply stating ‘HELP OUR TOWN’ (image below) are testament to the extensive impact of the current steel crisis. How might firms maintain their social responsibility to workers and communities in the face of these job cuts? Indeed, do organisations have a social responsibility for their employees?

Tata Steel Demo

At Scunthorpe, a notable step in attempting to develop a socially responsible approach to restructuring was the Project Ark process in 2011. This process was framed around a broader commercial strategy that reduced the volume of steel produced at the site, and further justified through a focus on producing higher quality, higher value added steel products along with a plan of investment in skills and training that sought to create a more flexible workforce. The consequence of this, however, was the announcement of 1200 job losses due the mothballing of the bloom and billet mill. The Project Ark strategy was a critical moment between Tata and the affiliated trade unions, as the job losses were essentially agreed by both parties to on the promise of future investment in skills and the broader commercial plan that promised to ensure the survival of the plant. Evidently, these promises were not upheld by Tata. At Save Our Steel rallies, senior union officials and MPs continue to bemoan the Project Ark process, with the subsequent Path to Profit process (500 job losses announced) perceived as a residual restructuring from the failures of Project Ark. Meanwhile, the HR team were rewarded for their efforts in managing the job losses, receiving an internal CEO award for their efforts in conducting a socially responsible restructuring process. Therefore, it is clear that Tata appreciate the need – the requirement, even – to ensure their restructuring practices are conducted in this way, with the process also being used as benchmark across the rest of their UK operations.

Tata claims a social responsibility to ameliorate the impact of these job losses for affected individuals and the local community. This commitment is laid out in its most recent Annual Report (2014-15). The socially responsible restructuring processes at Tata Steel UK have typically been characterised and managed through the avoidance of ‘hard’ (compulsory) redundancies – through redeployment practices such as cross-matching affected individuals in vacant positions internally – a close working relationship with the trade unions, and the provision of basic employability support in CV writing and interview training for those made redundant. As long as people who wish to leave do so voluntarily, this allows those wishing to remain to take up alternative employment within the organisation. The joint management-union goal of plant survival, has always been the key rationale underlying these processes. Amidst the prevailing industrial context the threat of restructuring within Tata seems more imminent than ever. The announcement of more job losses (18.1.16) at Tata UK’s Port Talbot site is clear evidence of this. In this context, the sustainability of this socially responsible approach to restructuring is subject to increasing amounts of pressure. The coming negotiations between Tata and its trades unions will prove historically significant not only for the fate of the Scunthorpe site but for the UK steel production more broadly. The feet of steel workers are being held firmly to the blast furnace fire.

Up to £6m has been pledged by UK Steel Enterprise (a CSR-based subsidiary of Tata that supports steel areas affected by restructuring) and the government to aid regeneration and job creation in Scunthorpe, along with another £3m aimed at funding retraining for affected individuals. Supportive measures like this, however important and in real terms quite limited, become devalued when CEO of Tata Steel Europe Karl Koehler claims that the long products division has no future beyond the end of the financial year. Moves like this further disillusion the workforce, creating a reluctance to engage with the range of support measures on offer. Additionally, recent changes in organisational structure in order to prepare the plant for being a ‘standalone’ business, then the subsequent decision to sell the division off, has put further pressure on the Scunthorpe plant to control costs and hence pressure on jobs. Given that previous restructuring processes have been necessarily framed around the survival of the plant, the imminent threats that these events pose bring into question any notion of a socially responsible approach. What is crucial in the negotiations around restructuring, job losses and sell off, is for Tata to continue to engage with trade unions in order to ameliorate, and where possible limit, the amount of job losses so as to ensure the process is conducted in a socially responsible fashion.

Chris McLachlan is a PhD student at Leeds University Business School and a member of the Centre for Employment Relations, Innovation and Change.

 

 

 

How can local authorities deliver better skills and employment support?

Jo Ingold 2
Dr Jo Ingold, Leeds University Business School

On the hottest day ever recorded in the UK, a diverse range of local authority Chief Executives from across the UK gathered in Harrogate for a Roundtable event ‘Can local government help deliver the welfare agenda?’ which ran alongside the Local Government Association Conference. In a short space of time we covered a range of issues. In this blog, I summarise the main issues that were debated, focusing on skills, the challenges of provision of employment support services, and the nature of effective evaluation.

Unsurprisingly skills came up as a key problem, including skills mismatches within local areas, both in relation to moving the unemployed into work and also with regard to employee retention and progression. One example given was of money being made available for skills training in particular geographical areas without incorporating intelligence about the jobs which are likely to be available in local and regional labour markets in future. Such skills mismatch problems are symptomatic of a broader fragmented landscape of skills and employment at the Whitehall level. The agendas of the Department for Work and Pensions (DWP) and the Department for Business, Innovation and Skills appear radically different in this area. The DWP seems more focused on the quickest way into work (in line with ongoing welfare reforms), rather than long-term skills development. In the context of potential (and partial, rather than total) devolution this fragmentation of the provision of social security and skills and employment support is likely to become even more messy, with accompanying accountability issues. Local Enterprise Partnerships (and their equivalents in Wales and Scotland) have a key role to play here but to date it’s not clear how far they are fulfilling this.

Also apparent from the discussion at the Roundtable was that amongst the local authority areas represented – from the urban to the rural and coastal – most were involved in delivering a range of employment support initiatives for a diverse range of groups outside the labour market, particularly those with multiple barriers to work. In some areas such projects were in response to perceived gaps in central government-commissioned Work Programme provision and in other areas they ran alongside the Work Programme. However, very little mention was made of partnerships with Work Programme providers. This raises two critical points.

Firstly, it seems sensible (and more cost-effective) not to duplicate existing – and, importantly, effective – provision. This will become even more crucial in the context of potential devolution settlements. Both local authorities and providers contracted to DWP to delivery employment services (alongside LEPs and their equivalents in Wales and Scotland) need to think more creatively about how to work together more effectively in the next Work Programme contract (from 2017). This is crucial for the provision of more effective employment support for the unemployed and also to provide a more coherent service for employers.

Secondly, with much good work going on, a key question is how to capture what is happening and to rigorously and robustly evaluate it. A few of the projects mentioned around the table were being evaluated but in the context of ongoing and severe local authority budget cuts, there is a need to think more creatively about how local authorities, organisations delivering employment and skills support and universities can work together to evaluate what works for whom and in what contexts (circumstances, labour markets). The black box approach of the Work Programme (freeing employment services up from government prescription) is a promising idea in principle. However, four years on from the introduction of the Work Programme it is still unclear as to whether and how evidence about what works is being harnessed and, importantly, disseminated across all interested organisations. As Julia Salado-Rasmussen argues in her recent CERIC blog, establishing causal links between active labour market interventions and outcomes can be difficult. The potential of more localised (and personalised) provision provides an opportunity for fine-grained and meaningful evaluation that can be better translated into future policy. However, one of the shortcomings of the competitive Work Programme model (and the broader commissioning of employment services) is that programme data can often be protected as ‘commercial in confidence’. It is crucial that such evidence is shared and used for wider benefit in order to inform future interventions to assist the unemployed into work.

Dr Jo Ingold is a Lecturer in Human Resource Management and Public Policy at Leeds University Business School, UK and is currently researching employer engagement in welfare to work programmes: http://business.leeds.ac.uk/research-and-innovation/research-projects/how-do-inter-organisational-relations-affect-employer-engagement-uk-and-denmark/

Co-investment in Workplace Learning: a union-led initiative.

Bert Clough CERIC
Bert Clough
– Visiting Professor, CERIC

There was scant reference to adult skills in the Conservative Party’s manifesto which indicates its low priority in the new Government’s agenda. Warning signs were already emerging during the last year of the Coalition Government. In his letter to the Skills Funding Agency, the former BIS Secretary of State, Vince Cable, outlined that £770m of adult skills funding in 2015-16 will be set aside for apprenticeships. This however means that the bulk of the overall cut to the Adult Skills Budget will fall on non-apprenticeship provision. The Skills Funding Agency has estimated that this could amount to cuts of up to 24% for non-apprenticeship learning over just one year.

The University and College Union (UCU) has warned that these cuts would hit vulnerable learners hardest, with millions of people who missed out on qualifications at school or those who need to retrain missing out if the cuts go ahead in 2015/16. The Secretary of State has stated that colleges and learning providers will thus need to consider how to lever in additional funding directly from employers and individuals.

The UK Commission for Employment and Skills has stated that pressures on public and private finances mean that traditional models of investment in skills are unsustainable. Private investment in training has been steadily declining and in England, part-time learning has fallen significantly. With the public purse likely to be even more constrained in the future, employers and employees will need to invest more time and resources in their development and in new ways of working. Conditions are required to support greater employer and personal investment in skills (Growth Through People, UKCES, 2014).

These conditions will not just magically appear. There needs to be a framework to support and deliver co-investment. Trade unions have been increasingly involved in promoting and helping to deliver co-investment in work –based employee development and lifelong learning. It involves establishing structures to pool funding and “in-kind” contributions such as facilities and time off to study by employer, union, provider and employee. The pioneer project was the Ford EDAP scheme established as a result of a collective agreement in 1987 which opened up a significant demand for lifelong learning. It has been remarkably sustainable, mainly due to it being underpinned by robust collective bargaining and run by the company’s unions.

The last Labour government provided some kick-start funding to the TUC’s learning and skills arm – Unionlearn- for developing union-led co-investment models known as “collective learning funds”. They were piloted in 23 sites across the North West and the East Midlands 2008-10 and managed by the TUC Unionlearn regions. The evaluation by CERIC revealed very positive outcomes not just quantitatively in terms of the learning opportunities taken up and workplace learning centres established, but in increasing union visibility and credibility over learning and initiating partnership working between unions and management through joint union/management learning committees https://www.unionlearn.org.uk/publications/research-paper-13-co-investing-workforce-development

A key issue for the unions has been to avoid displacement to ensure that any expansion of learning activity through CLFs does not bring about a reduction in learning investment by the employer or the state. CLFs need to fund additional learning activity that would not have been previously funded.

A follow-up project Call to Learn was established in the South West region. The project was on a smaller scale and covered five workplaces. These comprised of three manufacturing companies, a DWP workplace and a maternity hospital. The pilots had to be evaluated relatively early in the pilots’ life and any findings were therefore suggestive and unable to fully quantify learning outcomes. Nevertheless, it provides useful information on how the pilots were set up and reveals some innovatory approaches https://www.unionlearn.org.uk/publications/call-learn-tuc-unionlearn-south-west-collective-action-lifelong-learning

Like the previous two regional projects there was a common framework to the pilots such as a learning needs analysis, learning agreement, equality and diversity process, joint learning committee and a collective learning fund constitution.

There was a strong commitment to promote equality and diversity which was a specific requirement of the project and each pilot had robust procedures in place to meet that object. This included matching equality surveys with learning  surveys and with the learning committee taking any necessary action to target under-represented groups in the workforce.

Challenges included lack of ULR and management time to run the funds and no paid study time for the learner.

Successfully negotiating paid time off to study is often problematic due to effects on productivity but one workplace had managed to get round this. The union had negotiated an innovative arrangement whereby the workers studied free ESOL courses outside work time at a learning centre in a location where most of them resided. The company then paid them overtime for two hours of study after or before their normal shift working.

An important factor in the robustness of the three manufacturing pilots was the support of two project officers funded through a GMB Union Learning Fund regional project. There was also significant regional PCS support in the DWP pilot.

With minimal employer support for the learning activity in the maternity hospital pilot the union learning reps (ULRs) were running activities on an ad hoc basis but in a very innovative way. Activities even included funding a community choir ( linking learning with well-being) with some of the courses making small profits and ensuring that the CLF would break even on funding activities overall.

In some of the workplaces, it was the union that decided on and directly brokered provision with the college or private provider. In other cases the union had persuaded management to change the provider to better meet the needs of the learners. In two workplaces it was the ULRs who were actually running IT clubs.

There were positive messages from both unions and management in all the pilots that the arrangements should continue after the Call to Learn project ended.

In view of the rapidly diminishing public funding for workforce development there is an urgent need for models of co-investment to be mainstreamed in VET policy with the government actively promoting them in both unionised and non-unionised workplaces.

Teachers and the Summer 2013 uprising in Turkey

Burcak_Ozoglu
Burcak OZOGLU- CERIC

The grand[i] uprising in the Summer 2013 in Turkey raises important questions for social scientists and prevailing conceptual frameworks for understanding social movements and resistance. This blog examines the dynamics of the uprising in terms of class struggle via the case of school teachers.

The spark that ignited the uprising, at the end of May 2013, was an environmentalist issue, protesting the destruction of one of İstanbul’s few green public park areas (Gezi Park at Taksim square). However, the action on the streets quickly transformed into an anti-AKP[ii] /anti-government movement. The brutal intervention of the police force, at the instigation of president Erdoğan, provoked demonstrators, as the sphere of resistance shifted from Taksim Square to the whole country.

Hundreds of young teachers also took to the streets, participated in public forums and marched at the rallies in the Summer 2013. Although their primary revolt was about their basic social rights as a citizen and against the government’s brutality via the police, they also had their own agenda. Whenever teachers were chanting “Everywhere is Taksim!” they meant their schools and classrooms as well as the streets of their neighbourhoods. Boyun eğme (Do not surrender!) was a call for them not only to fight back to the authoritarianism of the AKP government over their everyday lives at home, but also against the deteriorating labour processes and employment issues at work. In otherwords, the young teachers were rebelling against the brutal police, the oppressive government and their coercive “employer”.

Three key points of argumentation should be noted:

1)  The provocative role of the AKP government, led by Erdoğan, was a key factor triggering the 2013 Turkish uprising. For more than a decade, Erdoğan and his governments meticulously followed an aggressive path of neoliberalism as well as an obscurant and oppressive strategy. The AKP government has sought to restructure processes across public employment in general, including increasing reforms of the education sector.

The reforms have covered recruitment and appointment systems at the primary and secondary levels in the public education sector in Turkey and have led to an obvious deterioration in the employment relations of teachers:

  • Teaching as an occupation and professional has been trivialised.
  • A precarious and iniquitous employment model has been formed.
  • Considering the yearly teaching time and the time spent at work, teachers in Turkey are working considerably more but teaching less than the OECD average.[iii]
  • Teachers are being paid less than the OECD average.[iv]
  • By the newly introduced applications of performance management and business like appraisal methods, teachers have been experiencing loss of autonomy and control over their labour processes and high level of deskilling.

2)  The uprising in Turkey might have been triggered by environmentalist concerns of the urban middle classes but was in no way an apolitical gathering of the It should be noted that there is a particular history of unrest in the country. Tensions have been gradually rising for more than a decade.

Before the uprising of 2013, August had become the month for teachers’ demonstrations. The candidates, who have their university degrees but have not yet been appointed as a teacher, met every year on the streets of the main cities of the country. By March 2012, there had been 30 suicides as a consequence of not being appointed as a teacher.

On the other hand, the obscurant policies of AKP had been turned into direct pressure in the schools over the teachers. The backward changes in the curricula besides the new laws regulating Islamic religious schools and courses created an intense unrest within the teachers as well as the parents.

3)  The last issue relates to the presence (or absence) of the so-called traditional forms of employee organizations. Although the overwhelming working class character of June 2013 is now accepted, neither the unions, other representative association or any of the opposition parties played a key role in the actions. Teachers, for example, would name their neighbours, relatives or friends before their unions as comrades of June 2013.

I have to note that, current industrial relations` regulations in Turkey do not provide industrial action rights for public unions. In the education sector unionisation is more than 65 percent (1 007 865 employees of which 651 234 are union members), but with no rights for collective agreement and strike action.

Despite these constraints, I would still argue that unions largely neglected their members` struggle politically during June 2013 uprising.

Revealing these points, the teachers’ actions can be considered as an illustrative case for discussing the anti-capitalist characteristics and the class struggle dimensions of the uprising in Turkey and the movement beyond.


[i] Beginning from the end of May for more than three months, millions of people in most of the big cities of Turkey were active in one way or another in the protests. AKP government executed an improportionate force to the appeal of the people in response. Summer 2013 has been over, closing the first round with 6 deaths, couple more still struggling in coma, tens of young people who left their eyes and many others with serious injuries. Yet the tension has never decreased, on the contrary new agenda has been raising constantly since last summer. People who have been killed by the police forces has reached to 10 people.

[ii] AKP Adalet ve Kalkınma Partisi (Justice and Development Party), the political party currently holding the government of Turkey with a 49.9% vote power from the general election in 2011. The overall vote percentage of AKP has only decreased by 4.3 points (45.6%) in the `post-Gezi` local elections at March 30th 2014.

[iii] OECD 2009 Education at Glance Report

http://www.oecd.org/document/24/0,3746,en_2649_39263238_43586328_1_1_1_1,00.html#4

[iv] ibid

Fast food workers strike in the US, but who will unionise the UK’s chippies?

Jane Holgate WEB
By Jane Holgate, CERIC, University of Leeds

Low-waged workers in small workplaces are, statistically, the least likely to go on strike. They are unlikely to be unionised, are under close supervision from the boss and are easily replaceable. Traditionally, unions have paid little attention to these workers. Organising in small workplaces with high staff turnover provides little return for lots of effort.

Yet in the US, thousands of fast food workers from outlets such as McDonald’s, Domino’s and KFC have walked out of their workplaces taking their colleagues with them in a series of day-long strikes that began in 2012. The most recent of these involved coordinated action in 150 cities across the US last month.

But nothing of a similar scale has happened in the UK, and it doesn’t look like it will happen any time soon. The reasons for this go to the heart of the differences between unions on either side of the Atlantic.

Poverty wages

It is easy to see why campaigners in the US have targeted fast food. The industry’s workers are the lowest paid in the country, according to government data. Their median salary is just $11,000 per year. They also suffer a high degree of “wage theft”, where employers dock their pay or force them to work unpaid hours.

Workers are demanding the right to join a union and are pushing the Obama government to increase the minimum wage nationwide. Currently, the federal minimum wage stands at $7.25 but individual states and cities have the power to set their own rates above this figure. Since the strikes began minimum wages increases have been secured in seven states and two cities. SeaTac, near Seattle, in Washington State was the first city to win an increase to $15, followed by the city of Seattle itself.

Complex labour laws mean unions face difficulties getting recognised by employers and the unions often experience expensive legal challenges from employers. The unions and unionised workers also face intimidation and bullying from multi-million dollar union-busting companies. To avoid this, unions have adopted a new tactical approach to organising in this sector.

New tactics

Campaigners have targeted the state and federal legislatures to increase the minimum wage. As many fast food restaurants are franchises, the owners have little room for manoeuvre when it comes to wages, as the price of supplies and food is set and regulated centrally by companies like McDonald’s and Wendy’s. Low profit margins mean the owner of an individual McDonald’s franchise has little scope to increase wages.

The unions also chose to organise fast food workers in the community as opposed to in the workplace. They set up Fast Food Forward – a community coalition – where they have funded organisers to work with local groups and workers centres. Faith leaders in local churches and community activists have shown their support for the strikers. In one example, from late last year in New York, “Clergy and city council members walked a Wendy’s worker back in after her manager told her she was fired. The high-powered delegation convinced the manager to ‘unfire’ her”.

Workers are also legally protected from dismissal (largely), as it is unlawful to fire workers for attempting to organise a union.

Could these tactics work in the UK?

One reason this form of organising hasn’t spread to the UK is that local councils don’t have the power to set minimum wages. A minimum wage campaign could be directed at the national government, but unions in the UK have tended to use their political links with the Labour Party to press for demands for worker-friendly legislation and are unlikely to think it worthwhile to demand progressive labour laws from the current coalition government.

Unions in the UK also tend to be too focused on servicing their current members rather than on expanding into new, non-unionised workplaces. While some unions have adopted the language of organising, where this does take place, it tends to be where unions already have membership. For a typical UK union, a trip round the local high street’s fast food places would be a leap into the unknown.

It’s a leap the unions might be willing to take, if it weren’t for another problem: they simply don’t have the resources of their US counterparts. The UK trade union sector has seen merger after merger (a consequence of a failure to invest in organising) as unions need to consolidate in order to cut costs and survive.

In the US, unions are able to draw strength from being part of a wider tradition of community-based organising, including a number of national networks of faith-based and community coalitions. Geographically based community organising – while starting to take place in Unite, the largest private-sector union – is not a feature of UK trade unionism. But even Unite’s community membership is aimed at organising those not in work to campaign for social justice rather than workers in the workplace.

For unions in the UK looking enviously at the success their counterparts have had across the Atlantic, there are lessons to be learned. British trade unions could recast themselves as broader social justice organisations where their role is to create benefits for all workers rather than just their members. Forming genuine common-cause coalitions with progressive community organisations campaigning for social justice, instead of just requesting assistance when unions need support for an industrial dispute or campaign, could prove valuable in reaching into communities where unions do not have a base.

Further, the campaign for a living wage began in London in 2001 when London Citizens – a community coalition explicitly based on US organising tactics – began working with unions to secure wage increases for hospital workers in East London. Since then, this small organisation has managed to persuade dozens of employers to pay a living wage of £8.80 in London (£7.65 outside of London) per hour – £2.49 (£1.34) more than the national minimum. More than 100 local authorities have now committed to paying the living wage.

At the same time they have managed to shift the political discourse around low wages to that of a “living”, rather than a “minimum” wage, such that the Labour Party has committed to its introduction, should it be returned to government.

Unions need to get smarter and more flexible in the way they organise in order to adapt to the constantly changing labour markets and laws that make organising workers difficult. It can be done, but it requires a fundamental shake-up of the way unions currently operate and the adoption of more innovative and tactical approaches to organising.

Jane Holgate does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published on The Conversation.

Facts and issues on the Soma mine blast in Turkey

Dr. Burcak OZOGLU – CERIC

enerji-bakani-yildiz-soma-da-da-rakam-vermedi-6025878_7881_o
Government versus Miners.

The incident:

On the afternoon of May 13th 2014, news agencies reported a blast in the mine in Soma, a small town in Western Turkey. First reports said that a power unit blew up 1.2 miles underground (subsequently, experts revealed there may have been other causes for the release of high amounts of carbon monoxide).

The accident left hundreds of workers trapped underground for hours and days, with 301 reported to have been suffocated to death after four days of rescue operation.

The incident proved itself to be a disaster rather than an accident. It was a major disaster not just because of the high number of casualties but also because of the tragic events after the blast. It was a tragedy not only for the locals but the people of Turkey.

Officials were very slow to provide technical information about the incident and have never announced the exact number and names of the workers who were supposed to be in the mine at that the time. So the rescuers did not actually know who they were searching for.

The minister of energy and national sources, as a representative of the government, was leading the operation and he himself has never provided sufficient information.

The executives of Soma Holding Inc, the company that was operating the mine visited the scene accompanied by government officials, although many accused them as directly responsible because of their negligence.

The death toll generated a tremendous groundswell of action and unrest both locally and all around the country. The ongoing unrest in the country after June 2013 was transferred with all of its anger to the Soma incident. People focused attention on the AKP government`s privatization policies and the profit making obsession of the private sector. Prime Minister Erdoğan continued to be the focus of the protests. He was booed and his car was kicked by the people of Soma when he visited the town after the accident. Erdoğan`s so-called condolence speech, in which he cited 19th century England and proposed these types of accidents as the destiny of miners, provoked more protests.

The mine was closed after five days of rescue operation. The investigation is still continuing just like the protests and actions all over the country.[i]

The Employer:

The main employer of the Soma mines on paper was the Turkish State itself. Audit Department reports revealed the business model of the mine and it clearly showed that Soma Holding Inc. was actually the sub-contracting company of Türkiye Kömür İşletmeleri Kurumu (TKİ), the state owned establishment for coal mining of Turkey.

This fact had two significant points in terms of the Soma incident: Firstly, it was revealed that the AKP government, via being the representative of the main employer of TKI, was obviously amongst those directly responsible for the disaster.

Secondly, the business model for Soma Holding Inc., being sub contracted for the main job, was in breach of current law on mining operations. The implementations of privatization via transferring operations in the mines are restricted to the transfer of supporting operations, whereas in Soma mine the main operation of mining was contracted to Soma Holding Inc.

Apparently, the Soma mine was not exclusive in regards to the relations between the AKP government and Soma Holding Inc. Just after the Soma disaster, newspapers revealed that over 70 billion TRY (£20 billion pounds) of funding had been issued for the Holding in seven years (all covered by AKP governments between 2005-2014).

Another rather striking issue about the employer(s) of Soma was their unperturbed determinations about the mining business. In an interview in September 2012, Alp Gürkan, CEO of Soma Holding, boasted how they cut the costs of coal production from 130-140 US dollars to less than 24USD at Soma mines. He also explained their main motive as profitability in the mining business and how working with TKİ provided this opportunity to them.[ii]

Sub-contracting as an employment model:

Privatization has been one of the main strategic goals of the AKP since their early governments in 2004 and has shaped their political and economic strategies for more than a decade. The figures show how privatisation has been one of the main `businesses` for AKP.

1985-72
Source: TR Privatization Administration
http://www.oib.gov.tr/program/uygulamalar/1985-2004_years_table.htm

The case of Soma mines were one of the various implementations of privatisation of the public services. The public services of coal production in the Western basin have been sub-contracted to some specific capitalist groups, since 2005. This met the procedural requirements all lawfully on paper. TKİ had transferred the operational rights not the property of the mines.[iii]

Soma Holding Inc. became the sub-contractor in 2005 and has admistered the mine since then. Soma was not however exceptional. The ministry of labour has revealed that there are 12, 606 workers in the mining industry employed under sub-contracted employers.[iv]

However, for the mining industry in particular, this method comes with some small problems for employers. As mentioned above, the law currently prohibits the main operation of the mining industry to be transferred to a sub-contractor. That is mining, as the main operation, cannot be transferred to a sub-contracted employer, which in this case is Soma Holding Inc.

What happened at Soma was firstly a twisted label for the operation of excavation as a service operation, not as main operation. Secondly in terms of employment of the workers a method of sub-contracting the sub-contracted was used. The workers at the mine were responsible to some kind of vendors, called dayıbaşı, although they were the employers of the “main” sub-contractor (Soma Holding) on paper, they had been working in 30-40 people groups under vendors (dayıbaşı) in the mining jobs.

This inconvenient system of employment explains all the ambiguities about the numbers and names of the workers in the mine at the time of the incident.

The disaster tragically disclosed the problems of the employment model in the privatised mines. In response, the government has not sought to review or stop such procedures. On the contrary, it has sought to accelerate regulation that allows for such models.

A decree law, which was in progress for some months, was brought before parliament just days after the Soma disaster. The law covers regulations and changes in related laws that will make the exceptional employment case in Soma mines a point of principle in sub-contracting implementations. The lessons from the Soma mine have been obviated in the pursuit of employment models that further the profit motives of employers.


[i] See for details: http://www.theguardian.com/world/2014/may/14/turkey-mine-blast-relatives-soma-energy-minister : http://www.bbc.co.uk/news/world-europe-27406195http://www.bbc.co.uk/news/world-europe-27455367

[ii] See: in Turkish http://www.hurriyet.com.tr/yazarlar/21586913.asp

[iii] See: http://www.oib.gov.tr/baskanlik/privatization_procedure.htm

[iv] See: in Turkish http://www.csgb.gov.tr/csgbPortal/csgb.portal?page=haber&id=basin491


Burcak_Ozoglu
Burcak Ozoglu is an Instructor at Middle East Technical University (METU), Northern Cyprus Campus, and is a visitor at CERIC during 2014.

The growing problem of zero hours contracts in the UK

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Chris Forde
Chris Forde is Professor of Employment Studies at CERIC.

@CERIC_LUBS

In May, Vince Cable announced a review of zero hours contracts, amidst concerns that such contracts may be ‘abusing workers at the margins of the labour market’. Under zero hours contracts, workers agree to be available as and when required, but they have no guaranteed hours or times of work.  In healthcare, hospitality, and education, such ‘on-call’ workers are increasingly commonplace, cleaning hotel rooms, waiting in restaurants, or providing care to people at home. A number of reports have highlighted the precarious nature of many zero hours contracts, characterised by low pay, few employment rights, and little opportunity for progression.

Getting a handle on the numbers engaged in zero hours contracts has proved difficult. A Resolution Foundation report, using Labour Force Survey data, puts the number of workers on zero hours contracts at 200,000, although the authors recognise that this is likely to be an underestimate.  This would certainly seem to be backed up by figures cited last week by Norman Lamb, the Care and Support Minister who stated in Parliament that in social care alone, 300,000 workers – one fifth of the workforce – were employed on zero hours contracts. Why have they have become so commonplace in some sectors, and what are the experiences of those workers at the sharp end of these contracts?

In our recent research at the Centre for Employment Relations Innovation and Change (CERIC) at the University of Leeds, Ioulia Bessa, Sian Moore, Mark Stuart and I have been able to look at the realities of zero hours contracting in the domiciliary care sector. Our study for the Low Pay Commission examined contracts, hours of work and pay for workers who provide care for clients in their own homes. We have looked at pay levels in this sector in a previous blog, but what about the prevalence of zero hours?  One of the most striking findings from our analysis of a national dataset on work and employment in social care was that zero hours contracts have become the norm for domiciliary care workers over the last few years. Between 2009 and 2012, 56% of domiciliary care workers were employed on zero hours contracts. As figure 1 below shows, in the private sector, it is rare to see a care worker on a standard employment contract: in 2012, a staggering 4 in 5 domiciliary care workers was on a zero-hours contract. Our analysis suggests that there were approximately 100,000 domiciliary care workers in total on zero hours contracts in 2012.¹

Figure 1: Proportions of Domiciliary Care Workers on zero-hours contracts, 2009-2012, National Minimum Data Set for Social Care.

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Source: Bessa, Forde, Moore and Stuart (2013) Report for Low Pay Commission

Our case studies showed that it was changes in the commissioning process and well-documented falls in ‘block contracts’ (where providers are given guaranteed numbers of hours of care under local authority contracts) that had driven the rise in zero hours contracting. As a manager from one large national home care provider put it:

‘It would be difficult to not sustain a zero hours contract because  you don’t have any guaranteed or block hour contracts from the local authority, because they’re all commissioned and framework (agreements), there’s no guarantee of business, it’s difficult to guarantee a workforce business or work’ .

Advocates of zero hours contracts point to the flexibility of such arrangements, and the benefits to both employer and worker of adaptable work schedules. To be sure, we found some evidence of workers who valued flexibility over how many hours they worked (in particular those with second jobs, students or those with other commitments). However, the problem is that zero hours contracts remove any element of continuity for workers in the hours they worked from one week to the next. One respondent who had worked as a care worker described how his ‘heart sank every Sunday night’ when he received a work schedule for the coming week from his employer, typically setting out less hours for the worker than they were expecting. Whilst these hours were often topped up by the employer with additional hours during the week, it made planning very difficult. Our case studies also highlighted how working variable hours each week also had implications for the receipt of Statutory Sick Pay, and benefits such as Working Family tax Credits.

Some have called for these contracts to be outlawed, whilst others suggest tighter regulation, and better enforcement of those rights that zero hours contract workers do have. As one commentator has noted, those on zero hour contracts do have a modest advantage over those on casual contracts, in that an employer does have an obligation to provide work to employees on fixed-term contracts over casual workers, if work is available.  The problem is that under zero hours contracts, the risks associated with work not being available are predominantly borne by the worker, .

If we are arguing that commissioning practices in social care are one of the causes of the rise in zero hours in the sector, are there better solutions? Our case studies highlighted how the practice of contracting for hours of care from suppliers (with no specified pay rates or employment conditions that suppliers must adhere to) was a barrier to improving contract arrangements of the care workforce. ‘Fair fee models’, where authorities could give a specified rate for hourly pay and for overheads (with the capacity for increases), or ‘open book’ approaches, where the local authority would pay what a service costs and then allow a certain percentage profit might lead to a reduction in the reliance by employers on zero hours arrangements to maintain margins. However, the dominance of the current commissioning model in social care would seem to suggest that such radical changes are unlikely to happen any time soon.

¹ Our analysis of zero hours in the NMDS-SC dataset in 2012 was primarily concerned with wages and hours worked, and we focused on the 42,908 zero hours contract workers who provided information on their contracted hours and additional hours. We excluded from the analysis of those workers who indicated that their contracted hours were zero, but who provided no information on actual hours worked in a given week. These involved the exclusion of 60% of cases from the dataset. Including these workers in the count of zero hours contracts would give the higher count of 100,000 reported above.