Tag Archives: Leeds University Business School

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.

 

 

 

Corner Mothers: Argentine sex workers using street art

Image

Dr Kate Hardy, CERIC.

On a street corner a woman is pictured with a leg leaning against the wall, her body adorned in the classic signifiers of sex work – a short dress and impossibly high heels. With one arm raised above her head, the other stretches out laconically to the side. At first sight this is just another stereotypical image of street prostitution, highly sexualized images which rarely reflect its reality. On second sight, the hand that stretches out, stretches around the corner, where it meets the small hand of a young girl, in school uniform, accompanied by a younger boy, both with backpacks slung over their shoulders. Suddenly the image transforms to see that this is, in fact, a mother walking her children to school.

This is one image from the new campaign ‘Mamas de la Esquina’ (Corner Mothers) being led by AMMAR, the sex workers’ union of Argentina. The street art is being used to challenge images of sex workers and to emphasise the fact that 86% of sex workers are Mothers. It is part of a broader campaign for decriminalization in the country, in which AMMAR have already won the repeal of laws in two provinces. The argument goes that as women sell sex in order to support their families, just like any other worker, they therefore deserve protection and from the exploitation and police violence they face every day.

As informal workers, positioned outside the norms and institutions of traditional labour relations, AMMAR and other sex workers’ organisations often have to use innovative means to campaign for better working conditions in their industry. Where there are no employers and the workplace is the public space of the street, improving working conditions frequently relates to demanding protections from the state, namely from displacement and police brutality. Sex workers are routinely bribed by members of the police force and one branch secretary, Sandra Cabrera, was assassinated by a bullet to the neck, after publicly denouncing the role of the police in trafficking and indoor prostitution.

Despite such intense pressure from the police to stop, AMMAR have continued to organize since their inception in 1995. When they first came together, with little political knowledge, they simply asked not to be re-arrested within 24 hours of being released from a cell. Since then, they have established a primary school, a health clinic, won the repeal of laws repressing their work in two provinces and they now have a voice in government bodies, particularly in the arena of HIV prevention. Elena Reynaga, President of AMMAR, who was illiterate when she founded the organization, is now an influential member of the UN Rapporteur on HIV/AIDS.

One challenge that remains is changing public perceptions of the reasons that the sex industry exists and why women (as well as men and transgender people) choose to work in it. By emphasizing the socially reproductive work it supports, AMMAR hope that it will be recognized that in a context in which all but the independently wealthy must sell their labour for money, the reasons for participation in the sex industry are simply the same as that sold anywhere else. Challenging this stigma and educating people about the roots of labour in the sex industry is an important battle, not only to transform the material conditions of sex workers lives, but also for creating conditions in which women are more free to choose whether or not they enter the sex – or another – industry.

Kate Hardy wrote her doctoral thesis ‘Proletarian of the night: sex worker organizing in Argentina’ on AMMAR and has published work on the organization in a number of books and journals

Government rhetoric is likely to turn off business and undermine a flagship policy

Image

Dr Jo Ingold

Everyone knows someone who has experienced, or is currently experiencing, job insecurity, unemployment or underemployment. In the past, it was largely those at the lower end of the labour market with low, or no, skills or qualifications who were most likely to find themselves without work. But in the current recession, anyone can be unemployed – whatever their skill or qualification level, whatever job or industry they’re in.

The Government repeatedly claims that they want to help people into work. They argue that their combination of tax and benefits reforms and the expansion of welfare to work programmes are the best ways to do this. They also make little secret of the faith they place in enterprise and the private sector to get the economy moving and to tackle unemployment. As Iain Duncan Smith said in a speech in Madrid in July, 2011: “Government cannot do it all. As we work hard to break welfare dependency and get young people ready for the labour market, we need businesses to give them a chance”.

There can be no doubt that employers are fundamental to the success (or failure) of welfare to work initiatives, such as the Work Programme, introduced in 2011. The Work Programme is the cornerstone of the Coalition Government’s employment policy. Central to its design is a network of mainly private providers, contracted to deliver tailored assistance to get the long-term unemployed back into work.

As the CBI has highlighted, the Work Programme can offer a range of benefits to employers looking to hire, including tailored packages which reduce recruitment costs and on-going support. Recently, here at CERIC, I’ve been researching (1) whether and why employers do or do not recruit from the Work Programme, and (2) how providers can persuade employers to give more job opportunities to the long-term unemployed. In the past year I’ve surveyed employers and interviewed providers and other key stakeholders. This research has highlighted two important barriers to persuading employers to recruit unemployed people. These are employers’ negative perceptions about unemployed people, and their portrayal in the media.

The first barrier is relatively well-known: for example, in a survey by the Institute of Leadership and Management a quarter of employers said that they were less likely to recruit people who were long-term unemployed.

Also well-known are the views put forward by some of the media about people claiming benefit. However, the Government itself is also increasingly talking about shirkers, scroungers, welfare dependency and benefits as a ‘lifestyle choice’. Government ministers present erroneous statistics about unemployment, worklessness and benefit receipt. They also focus on specific, individual and unrepresentative cases. This not only presents an extremely misleading picture. It is potentially sabotaging the delivery of a key government policy, hindering both those searching for work and those at the coalface who are actively involved in assisting them. Kayleigh Garthwaite  highlighted this recently in relation to long-term sick and disabled people.

Those who took part in my research, as well as employer organisations such as the CBI have suggested that the Government should do more to promote the benefits of the Work Programme to employers. Painting those who are unemployed, lone parents or disabled as shirkers is unlikely to address employers’ concerns about hiring people who have been out of work for a long time. On the contrary, it is far more likely to lead to the cementing of any existing perceptions that employers may have: that people on benefit lack motivation, self-discipline or that they are never going to be the most promising candidates for jobs. At a time when finding any work is difficult enough – let alone sufficient, regular work that pays the bills – this seems perverse.

The Government says that they want to move people off benefit and into work. To this end, Ministers and MPs need to be ambassadors for unemployed people. A myriad of evidence over the years makes it clear that very few people actually want to live on benefit. Most people who are unemployed want to work. One thing that is unlikely to be effective in helping them into work is portraying unemployed people as somehow ‘deficient’, reinforcing stereotypes based on prejudice, rather than evidence. This is doing unemployed people – and businesses – a severe disservice. Through its rhetoric around benefit receipt and unemployment, the Government is not only kicking people when they’re down. They’re undermining their own policy and potentially wasting large amounts of public money in the process.

Dr Jo Ingold is a Post-doctoral Research Fellow at CERIC.

Unite’s community organizing initiative – what’s driving these developments?

Image

Dr Jane Holgate
Dr Jane Holgate is a Senior Lecturer at CERIC.

@CERIC_LUBS

In December 2011, Unite – the UK’s largest private sector trade union – announced it was introducing a new membership scheme to ‘to ensure those pushed to the margins of society can benefit from collective power’. Unite’s new ‘community membership’ category is aimed at students, people who are unemployed and others not in work – categories of people who normally do not have a relationship with unions. Unite claims that their community organising initiative will ‘organise the marginalised and revolutionise British trade unionism’. While this may be a little overstated, it is argued there that Unite’s move into community organising is an interesting and significant development in the way UK unions are starting to think about and engage with the idea of community organising.

Other unions have also recently taken steps in this direction but often taking different approaches – some of it project-based or ad hoc (for example in Unison, GMB and PCS), and others like Unite and the TSSA, where there has been a strategic decision taken by unions to invest considerable resource into community unionism. Nevertheless, it would seem from my observations of unions over the last few years there has been a significant – although as yet not that well-developed – turn towards community unionism. But what are the factors driving these community/union organising initiatives?

Firstly, the global economic crisis beginning in 2008 appears to be a major push factor. A national officer from the PCS union told me that ‘General Secretary after General Secretary wouldn’t have stood up [at TUC Congress in 2010] and talked about community organising in other environments if we’d still had a reasonably benign economic environment’. And, it is evident from most of the case studies I have looked at in the above unions, that where the campaigns have been allowed to spontaneously develop, that these have taken place around the impact of the cuts on communities. This is particularly the case in Unite, where the union is opening up its membership to ‘non-traditional’ members – with a clear objective of creating a ‘fundamental shift’ within the union to bring people together, in their own communities to organise.

To date, four months after Unite employed 6 community co-ordinators, nine Unite community branches have been established in Liverpool, Wirral, Salford, Manchester, Leeds, Sheffield, London (Camden and Islington), Glasgow and Edinburgh – all (except London) in traditional working-class communities with a tradition of high union density among workers.

What appears to be a the heart of Unite’s view of community organising is an attempt to tie together a trade union consciousness and a community consciousness – going back to the trade unionism of the nineteenth century where there was a convergence of trade unionism and popular politics – with people drawing on strong social networks in their communities. It is noteworthy that it is mainly in the trade union heartlands of the north of England and Scotland where the first Unite community branches have been established. Here trade unions remain embedded in local communities to a greater extent than in many other regions of the UK – albeit much weakened from earlier times.

The Unite community organising that has taken place in the cities mentioned above has drawn upon strong social networks that have been in place in these communities for decades (for example, ex-miners in Yorkshire, retired union members and ex-dockers in Liverpool and the Wirral), making it easier to establish relationships of trust much more easily than would be the case if starting from scratch as an outsider.

A second factor in driving the turn to community is also a recognition that, as manufacturing employment and Fordist mass-production declined, and welfare benefits have been cut or reduced, labour has been re-commodified so that workers are more tenuously attached to their jobs and their workplaces meaning a loss of occupational and class identities that previously bound (unionised) workers together.

As such, declining worker bargaining power ­– at the point of production – has led some unions to begin to think about how to widen their spheres of influence and to assess the value of community as well as industrial-based organising. Whether this turn to community organising will have an effect in revitalising unions in the UK remains to be seen as most of these initiatives are only yet in their infancy – but what is evident is that there is growing interest in this area.

Paying the price for commissioning in social care? The minimum wage and domiciliary care work in the UK

Image

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

@CERIC_LUBS

When The Low Pay Commission’s annual recommendations were released a fortnight ago, most attention focused on the 12p and 5p rises in the minimum wage for adults and 18-20 year olds. As in previous years, these recommendations have attracted headlines about the level of the minimum wage, and the effects of the NMW on employment. Yet, whilst there is broad consensus over the importance of setting a floor for wage levels, the focus on a minimum wage may detract attention away from the more fundamental problem of low paid jobs in the UK economy. Why are there so many low paid jobs in sectors such as hospitality, retail, social care and personal and protective services? There is a need for a clearer understanding of how a diverse range of factors, including employer strategies, government commissioning regimes, and sectoral norms combine to institutionalise low pay in particular sectors.

In this respect, it is worth focusing in on one of the LPCs supplementary recommendations in their 2013 report. The Commission has recommended that contracts issued by public bodies which commission the provision of social care should contain a clause requiring at least the NMW to be paid.  One in 12 jobs in social care were paid at or below the minimum wage by 2011 and there has been much interest from the LPC in whether the commissioning of social care by local authorities is a contributory factor.

Within social care pay in domiciliary care has attracted most attention, and it was this sector was the focus of my report with colleagues Ioulia Bessa, Sian Moore and Mark Stuart from the Centre for Employment Relations Innovation and Change (CERIC), for the LPC this year. Almost 700,000 workers are now employed in the UK providing care for people in their homes, with the number of jobs expanding rapidly as the population ages. As commissioning of public service delivery of domiciliary social care has increased, so the number of directly employed care workers has fallen sharply. A decade ago, most domiciliary care workers were employed by local authorities, whereas now they are much more likely to be employed through one of the 6000 registered home care providers in the UK. The vast majority of publicly funded home care is provided by these private and voluntary organisations through contracts commissioned by local authorities. A recent survey found that there was increasing pressure on providers in terms of what they can cost in contracts. Local authorities may effectively pay only for workers’ ‘contact time’ with a client, rather than including any provision for ‘travel time’ between visits, which can be considerable.

Our research was able to shed light on the realities of work and pay for those in front-line domiciliary care roles. First, we analysed a unique national dataset on employment in the domiciliary care sector, the National Minimum Dataset for Social Care, gathered by Skills for Care. This dataset contains information on pay levels for domiciliary care workers, although, critically, it does not allow us to identify directly whether travel-time is included in hourly pay. Nonetheless, even without adjusting for unpaid travel time, we found that between 2008 and 2012, 1 per cent of domiciliary care workers were paid below the minimum wage, a figure which rose to 2.5 per cent in 2012.   Our case studies of five local authorities all revealed that none currently specified payment of the NMW in its contracts or actively monitored compliance, although two had undertaken research on provider pay rates as part of budget scrutiny exercises and quality assurance. One local authority representative argued that it was not their responsibility to monitor compliance amongst its providers, noting: ‘That is their business, that’s not something that we would get involved in.  It is up to them how they deliver’.

We do make it clear in our report that these percentages should be seen as a lower-bound estimate of those paid under the minimum wage, as they do not take into account the significant amount of travel time that domiciliary care workers undertake within their working day. In our case studies, commissioning documentation sometimes explicitly stated that tenderers would not receive any separate payment from local authorities for workers’ travel costs and that they should cost travel time into their tender prices.  Yet providers typically set charge rates that did not incorporate travel time between visits. With tender contracts awarded on the basis of clear price and quality criteria, Commissioners were acutely aware of the potential impact of including travel time. As one noted:  ‘….we know the impact of not paying travelling time.  However, if it were to be included, it’s probably going to make the service unaffordable for us.  It’s a dilemma.  It doesn’t sit comfortably.… In terms of finance, I can’t give you a figure because we haven’t done that piece of work.  But yes, it would be significant, it would make a significant difference to the cost of the service at a time when we’re having to make huge cuts’.

The other factor that is crucial to understanding hourly pay for the domiciliary care worker is visit length. Most homecare visits being commissioned by local authorities are for periods of 30 minutes or less. For workers this may result in their work being arranged so that they have too many visits too close together or ‘call cramming’, resulting in their having to rush their work or leave a client early to get to their next visit on time.  Clearly, there are implications for compliance with the minimum wage, if extensive travel time is sandwiched between a series of short 15 minute visits, which are only paid for contact time. Some local authorities had begun to move away from commissioning 15 minute visits, and some paid enhanced rates for shorter visits. At one local authority in a semi-rural location, there had been a consultation of the cost implications of paying for travel time. This had revealed that additional allowances, including travel time, might add as much as £2 per hour to costs for providers, and the local authority was considering changes to its commissioning practices as a result.  It also highlights how much unpaid time is borne by the domiciliary care worker as a standard, typically non-negotiable part of their job, and suggests that the numbers paid under the minimum wage will be much higher when travel time is taken into account.

To begin to tackle these issues, Local authority contracts with care providers should explicitly state that external providers pay care workers an hourly rate for all working time, including the time required to travel between visits. There should also be transparency in procurement processes and contractors should be required to state what hourly rates comprise in terms of working time and specifically whether travel time is included, and whether there are enhanced rates for short visit lengths. Only then will it begin to address the realities of travel time, visit lengths and unpaid labour that currently characterise work in domiciliary care.