UK Poverty Post

Flexibility forgets FRED

In an article littered with quotes from Chief Execs and Chairmen, the Financial Times analysed Britain’s flexible market with many expressing fear that the need for tighter regulation in the banking industry might be confused with a need for regulation in employment. Of course, there was no voice for the Forgotten. No place for FRED.

The CBI cited four indicators of what constitutes flexible work (easy hire-easy fire, wage-level adjustment, varied skill-set, mobility) and we should not underestimate the importance of a flexible labour market to employers, employees and the economy. At Oxfam, we’ve worked with people in sectors in which flexible employment thrives, such as hotels, catering and care.

However, there are many employers who take the notion of flexible work much further. To FRED, flexible work means being forced to take her holidays during shut down and having work withdrawn at very short notice. Flexible work is zero-hour contracts, where you don’t get paid unless there is work available. In some cases, when factories go through temporary shut-downs, workers may be forced to go without pay but are unable to claim benefits as they are officially employed. As the recession bites and savings need to be made, there is no doubt that many more employers will increasingly turn to such cost-cutting methods.

The Government’s response, the Employment Act 2008, does little to actually clamp down on unscrupulous employers. We can commend the Government’s £1 million investment in raising agency workers’ awareness of their rights, and their campaign to encourage the reporting of workplace abuses. But when there are 24 inspectors at the Employment Agency Standards Inspectorate, and this represents a doubling of inspectors in the past year, it’s little wonder that the worst employers feel they can get away with exploiting people who are desperate to work.

As James Reed, the Chairman of Reed recruitment company noted in the FT, permanent vacancies at Reed are down 50 per cent on last year, while the market for temporary jobs has dipped only 9 per cent. The significance of this is important. It suggests that people will increasingly be forced to take temporary work, and with this comes the uncertainty mentioned above. Again, not all agencies will seek to cheat people like FRED, but the UK has the largest and most fragmented agency sectors in Europe, making it much harder to police for rights infringements. For example, in France, Adecco and Manpower constitute almost 60 per cent of the agency market. Here, in the UK they barely make up ten per cent, despite being on most high streets in the country. Indeed, we have over 13,000 companies making up over 80 per cent of the market.

It is the lack of enforcement of such a vast and fragmented sector of the economy which the Government must address if it is to help people like FRED through the recession. Enforcement of existing regulations needn’t cost the employer. More proactive enforcement is not a burden on the economy but a necessity to prevent the exploitation of those who are rarely heard in the public media.