Customers won’t give a damn. The government should clamp down on rogue employers or reduce the National Minimum Wage.

Oxfam has just released a report looking into these issues in several sectors and found similar practices in construction and social care. In construction, severe and systematic violations of health and safety procedures are common, with repeated instances of threats to sack workers if they raise concerns. In hospitality, workers are paid by the room, rather than the hour and are expected to clean more rooms than is feasible. In care, excessive hours of work are particularly prevalent; some are working nearly 100 hours per week. This is not just about one hotel, one city or one company. It is much more widespread.

You can read more in their blog: http://www.oxfam.org.uk/applications/blogs/ukpp/2009/07/turning_the_tide_krisnah_intro.html

Reduce the minimum wage? Yes, that’s a *brilliant* idea, clearly people are waxing far too fat on their employers’ enforced munificence. In fact, why not scrap it, as a market-distorting, enterprise-discouraging, blatantly socialist barrier to economic growth?

apologies PragueTory, I know you didn’t suggest going that far, but I couldn’t resist Agree entirely that governmental non-enforcement is key issue. They do love to pass laws, don’t they – but never want to have to fund the implementation.

Still, love a good bit of journalistic ‘digging’. There was a nice wee “gotcha” earlier today, exposing letting agencies discriminating against Polish workers…hopefully some (belated) “enforcement” will follow?

Abolishing the minimum wage might well do more good than harm under current circumstances. Many of the recent immigrants I know are on unofficial pay deals because of it. At least if you normalised all pay agreements, they could become more enforceable.

But Andy, if you’re not going to enforce the NMW legislation, it’s more damaging than not having the legislation in place at all.

Claude’s back-of-an-envelope calculation implies that Hotelcare benefits to the tune of £250k in reduced costs per week ; complying with the law would reduce their annual profit by £13m to a loss of £11.5m. How can alternative providers who play by the rules run their business at a profit? The natural consequence in a marketplace where legislation is not enforced is that only law-breaking companies will survive.

So far the silence of the Labour Party has been deafening.

All those people who want to remove Brown from office. All those MPs who want to ‘connect with voters’, who want ‘clear vision’, who want ‘leadership’ and all the other platitudes that precede a leadership challenge are unable to find a sympathetic ear in the media? Purnell was able to find any number of people to explain what was wrong with Brown’s Party, yet cannot manage to get to a mike at the moment. I wonder why that is? Where are the chosen few who are to carry the standard for the very people who the Labour Party exist to protect?

Why is it that the Labour Party can find time to squabble about how many middle class women should be in Parliament, but struggle to take on the agencies and exploiters who are driving working class women into poverty?

The Labour Party are floundering in the polls; yet think that electoral recovery lies in attracting a few women onto the cabinet. Yet under our very noses, blatant exploitation is occurring and none of the female MPs are willing to get up and drive this debate onto the top of the agenda.

We do not need to drag Cameron into a debate about ‘sexism’, we need to drag the owners of the most profitable companies in the Country, if not the World into a ‘debate’* about ‘sexism’. We also need to amend the minimum wage act and other employment laws to stop this type of exploitation. We could do a lot worse than outlaw employment agencies, but hey, why rock the boat?

*Of course, by ‘debate’ I mean courts and Select committees to defend their practices.

It does need enforcing, I wrote a show about immigration and the difference between paid wages to immigrants and the national minimum was horrible but if forces people to take on the dreaded lobby group of SMEs and that is fraught with danger.

Also, BBC has a great piece on discrimination on housing by rental companies refusing to let to Poles, Somalians and bizarrely Muslims. A good bit of expose journalism showing that the ‘No Blacks, Dogs or Irish’ is still in effect in the UK.

PragueTory:

“complying with the law would reduce their annual profit by £13m to a loss of £11.5m.”

Only if everything else within their business remained exactly the same, which you can’t assume. Still, if they did go under, it would answer your next question:

“How can alternative providers who play by the rules run their business at a profit?”
By having an unfair competitor who is breaking the law leave the market. Or by having their directors take smaller cuts of the company pie, or..etc.

Nick – “Many of the recent immigrants I know are on unofficial pay deals because of it.”
Assuming cause – how about they’re on these (illegal – have you reported the employers concerned to the relevant authorities? just wondering) pay deals because they’re in weak, (non-unionised, perhaps?) bargaining positions, and the employers are exploiting that?
Not saying that’s the reason, but all you’re offering is anecdotal.

“At least if you normalised all pay agreements, they could become more enforceable.”
Which is exactly what the minimum wage is meant to achieve, no? But I think we can at least agree it’s crap government enforcement (yet again).

As others have mentioned an unenforced NMW falls victim to the law of unintended consequences. The greater the wedge between the NMW and what the most desperate non-citizens are prepared to work for

a) the greater the incentive for companies to cheat the system
b) the harder it is for ethical companies to stay in business
c) the fewer the opportunities for British workers

Appalling stuff from the ‘Workers Party’ – which is by the way a rogue employer itself.

I like the idea of having some sort of externally validated certificate that hotels could display to tell customers they treat their staff decently – sort of like a fair trade label for the service industry. (not as a substitute for proper supervision and enforcement of employment legislation).

So is Hotelcare going to be slapped with a massive fine and its staff given some back-pay?

10. It’s already the law. This is simply a question of enforcement or abolition of the NMW.

‘I like the idea of having some sort of externally validated certificate that hotels could display to tell customers they treat their staff decently – sort of like a fair trade label for the service industry. (not as a substitute for proper supervision and enforcement of employment legislation).’

Fantastic idea. My own office displays certificates about customer service and I don’t see why that shouldn’t be the same for treatment of our own employees.

As long as they’re honoured, which I’m sure they will be.

#12
Like I mentioned in the OP, that’s worked before in other fields. Think of products that gained popularity for not being tested on animals, or think of all the improvements in the fast food industry related to a number of factors (i.e. 100% beef) . I for one, would never set foot in a hotel if I was aware they had a poor record in terms of how they treat employees. Imagine establishments who would put on their brochures “we pride ourselves on ethical treatment on our staff and we are committed to paying them the national mimimum wage”, or similar…

#1, #4
The people who think abolishing/reducing the minimum wage is the answer. So why don’t we apply the same warped logic to public transport? Lower tube fares and train fares, that way nobody would dodge them. Except that, if you get your brain to think about it longer than 3 seconds, you realise that dodgers always existed, even when the fare was half the price.

@ 10, 12

I cannot accept that we could tackle such exploitation with a de-facto voluntary agreement (and that is what it would be) via a certification programme.

We would not tackle any other form of exploitation in such a slapdash method. We would not expect employers to treat ethnic minority and or female applicants/employees fairly by a ‘code of conduct’; we use fairly strict and ENFORCED laws to ensure compatibility. Indeed, we have seen various employers, including the Government, taken to court and forced to pay out huge sums of money for transgressions.

If I said we should scrap the race discrimination act and replace it with a voluntary code of conduct run by charity with the right to ‘name and shame’ people who treat black employees unfairly on a whim, I would be laughed of the board, so why have a two tier system anywhere else in the labour market? We need strong, enforced laws to tackle exploitation, not codes of conduct.

Why are we willing to accept an underclass now, when we weren’t thirty years ago?

For reference here is piece on discrimination to economic migrants for housing:

http://danielhg.blogspot.com/2009/08/no-irish-no-blacks-no-dogs.html

Jimbo,
I can’t say for sure, but I don’t think #10 and #12 were arguing to scrap the NMW and have it replaced with a voluntary agreement.

I think we all agree the NMW should be seriously enforced and the government has a lot of lost ground to make up for.

What’s being said is that, on top of that, hotels and other businesses should be pushed to advertise external reviews of their employment practices. That way you’d get a customer-induced incentive, given that in many cases, money is the only language “the wealth creators” understand.

I think I’m right in saying the government increased the number of minimum wage enforcement officers from 100 to 150 in 2007, and again recently on the assumption that the recession would lead to more employers trying it on? (Can’t remember how many it is now). More would always be welcome, of course.

Claude @17

I accept that neither poster is advancing the idea of scrapping the minimum wage, but both are advocating that such loopholes and blatant flouting of the minimum wage and other employment laws you have highlighted can be tackled by a toothless and ultimately voluntary ‘code of conduct’ or ‘best practice’ agreement, no matter how stringent the validation procedure is.

I cannot accept that fundamental rights are to be awarded and monitored by such a haphazard fashion. What if ‘the customer’ couldn’t give a fig? Then what? People did not ask for a code of conduct to regulate the slave trade, ‘we’ wanted the exploitation ended.

What we need is statuary enforced legislation. We need to close gaping loopholes when we find them. Where there are legitimate disputes; they need tested in the courts.

The type of workers and people we are dealing with are those, by definition, who have the least rights and the least recourse to the courts. The only way we can defend these people is via Government agencies with real teeth to do damage to rogue employers.

That is what has driven the ‘wealth creators’ to change their attitudes concerning female and ethnic employees, the language they understand is the language of statuary instruments some hefty payouts. Do you think women and ethnic minorities would have been served better with a ‘code of practice’?

These agencies are allowed to stifle competition and have become ‘too powerful’, just like the unions, but New Labour are loathed to legislate against them.

both are advocating that such loopholes and blatant flouting of the minimum wage and other employment laws you have highlighted can be tackled by a toothless and ultimately voluntary ‘code of conduct’ or ‘best practice’ agreement

No, I think you’re misunderstanding them.

1) the minimum wage should be strictly enforced, with draconian sanctions for companies that fail to pay it.

2) there should *also* be a ‘we treat our service employees properly’ badge for hotels etc to carry.

Qualifying for #2 wouldn’t just mean obeying the letter of the law (which allows you to, e.g., sack anyone who’s been employed for 11 months and 30 days for no reason to ensure nobody gains full-time permanent rights), it means treating people fairly – in the same way that most companies who employ white-collar staff don’t just provide them with the legal minimum holiday, sick pay, maternity pay, etc.

If such a declaration was to acknowledge the fact that they comply with the law and the law requires them to act in such a manner, then I agree that is a good idea,

AS LONG AS IT IS BACKED BY LAW.

The issuing of such a certificate would be a prerequisite of trading the same way some companies require a fire certificate a HSE certificate, environmental certificate, or employee insurance etc.

If this certificate is merely a code of conduct, then it is meaningless, because without teeth, it is merely a frame on the wall for the worse employers. Good employers will sign up to such a code, because they will have largely written it, but the worse employers will ignore it, or simply not comply with it.

Voluntary schemes have their place, I accept that, but the fundamental rights need protection.

I wonder if the fairtrade organization could indulge in a bit of mission creep, and come up with some standards for the services industry, and start issuing badges … it would be quite a tough job to monitor thing, but not impossible (rather easier than monitoring employee conditions on a small African cocoa farm, for example).

As I think I said @10 this is not a substitute to legislation and enforcement (Jimbo, I think you’ve got hold of the wrong end of the stick), but an extra that might help pull things along in the right direction, add some extra incentives. Who knows, people might even be prepared to pay a bit more if they know the staff are getting paid a bit more too.

we need a catchy brand …. fairwage?

“Assuming cause – how about they’re on these (illegal – have you reported the employers concerned to the relevant authorities? just wondering) pay deals because they’re in weak, (non-unionised, perhaps?) bargaining positions, and the employers are exploiting that?
Not saying that’s the reason, but all you’re offering is anecdotal.”

All potentially true. But I wouldn’t report this to the “relevant authorities”, as that might well lead to the employees losing their jobs, and, in some cases, the businesses they are working for going under or at least reducing output. My acquaintances are aware of minimum wage laws and I am sure would pursue the legal route if they thought it was in their interests to do so. As it happens, they seem to prefer to keep an eye out for better paying jobs while not getting the government involved in their transactions. Which seems sensible enough.

It looks like Hotelcare have been at this for a while. Why have they been allowed to exploit workers in this way for so long? Article from 2005 -
http://www.caterersearch.com/Articles/2005/06/23/306049/selling-people-short.html

Oh dear, Stoat brings the vomit to this thread…

I feel I should clarify my position here. I do not believe that I have ‘the wrong end of the stick’ regarding the proposals on an employment audit scheme. As I said earlier, I believe that some kind of kind of scheme would be at best, superfluous.

The better employers would largely write it. I assume this would be industry funded, directly through subscription, therefore people like McDonald’s’ (I believe they are relatively good employers BTW) are unlikely to include things that would hamper it from operating. Rogue employers would ignore such a scheme, or simply manipulate its practices to comply on paper, i.e. not employ people on the minimum wage, instead employing agencies that exploit those workers exactly as the agency in question does.

The best such a scheme can do would by improve the lot of the lower end of the scale, perhaps those on 15 grand a year secure a few perks, but those on the bottom rungs of society, are basically on there own. No-one is in the slightest bit interested their welfare and no box ticker from ‘fair wages’ are going to put it right either. This underclass of people are going to continue to be exploited unless a Government with the stones to stand up to rogue employers and says ‘sorry, this is wrong’ and puts it right.

“In some cases, they are paid almost half of what they should be entitled to, and £120 off an already meagre weekly wage of £250, especially in London, can seriously make a difference.”

Indeed. I still find it amazing that people can survive on the NMW in London. What people must be sacrificing and doing to get by on half that is a disturbing thought.

L Blinky @ 28

I agree with you regarding Government reluctance to move in this matter. This has not just happened overnight without anyone being unable foresee or rectify these blatant injustices.

This has been ongoing right throughout Labour’s time in office. The most chartable assessment of this blind spot is perhaps Labour’s determination to seen to distance itself from those at the bottom of the economic pile has meant it has been blissfully unaware of this vicious exploitation and that no-one within the left of politics had alerted them to these people’s plight.

The rather obvious conclusion however, is that the Labour Party and its followers are all too aware of the desperate conditions that these people find themselves in and have abandoned these people to their fate in a kind of political triage.

Either way, it is a damming indictment of the type of ‘Champaign Socialism’ that I have come to despise.

The type of people who think of nothing of charging the tax payer for everything down to a bath plug, but think it fair that the poorest workers are expected to hire lockers, have deductions for PPE or ‘administration fee’ for the privilege of working in a hotel.

The type of people who would strap benefit claimants into lie detectors, but turn a blind eye to rogue employers.

I wonder what research available on the type of people who occupy the bottom rungs of our society. I can stick my neck out and suggest that they do not participate in politics, do not organise, do not know or able to enforce their rights. Just an underclass of people that the chattering classes wipe their feet on as they come out of restaurants, hotels, conference rooms etc.

Like the Fujianese who drowned in Morecambe Bay, Romanian chambermaids don’t have votes and are unlikely to make an unpleasant fuss at a Labour Party conference.