By Oliver Crunden
Mathew Taylor, named as new Interim Director of Labour Market Enforcement, is due to put forward his new approach to tackling employment rights abuses – but will it bring much-needed change or deliver more of the same? With the number of workers illegally underpaid set to double to just under a million by 2024, a significant change is the only credible option.
Those of us watching this space have seen some important developments in recent months, starting with the appointment of Mathew Taylor – previously chief policy advisor to Tony Blair – as Interim Director of Labour Market Enforcement in August 2019. Since then, the government has taken steps in the right direction. They have committed to developing a single body responsible for enforcing rights in the workplace and, as part of a new naming and shaming exercise, to publishing lists of employers who have not paid out Employment Tribunal fees to workers they have wronged.
This all seems fine, but there have also been signs that change on the ground is not quite keeping pace with official rhetoric. Shocking, I know. Here we take a look at Taylor’s approach and how likely it is to achieve real change, and take the opportunity to aim some rotten word-tomatoes at employers who’ve been named and shamed – just like the good old days.
A familiar head for a new body
Who is Mathew Taylor and why do I care? As a well-known name in the small, mostly London-based policy bubble, you are forgiven for not knowing and still asking ‘why do I care?’. His appointment would seem, in theory, a step forward for employment rights. He has been vocal about the need to create a single body for enforcing employment rights, a move that comes recommended by the International Labour Organisation, and he enjoys notoriety for a stated commitment to improve the quality of work in Britain.
Yet his significant shortcomings in relation to this commitment are well known, and his ‘Good Work Plan’ is set to bake-in the status quo rather than shake up the world of work. Taylor is a self-professed and committed ‘gradualist’ – seeking small incremental changes while leaving the core mechanics of the beast untouched – and his appointment will be the latest test of where this approach leads us. I can’t predict the future, but it feels like we’re firmly on track and headed steadily towards More-Of-The-Samesville, an increasingly real dystopian world, available for hire today (with a no returns policy)!
With an extremely narrow array of tools available, Taylor and his new body face a tall task identifying and weeding out unscrupulous employers from capitalism’s garden. As anyone who has visited B&Q recently can attest, tools don’t come cheap – and while Taylor’s new body comes dressed up in a fancy new coat, its pockets are certainly no deeper than before.
The latest spending review announced a welcome 4% increase (after inflation) for enforcement activities, yet this still seriously underestimates the scale of the task. The amount the UK invests in making sure the legal rights of workers are met falls well short of other countries and leaves workers vulnerable to exploitation. UK firms can expect a visit from the inspectorate once every 500 years. Their Canadian counterparts are far chummier with their municipal inspectors by comparison, laying out the welcome mat once every ten years.
In his first speech in post, Taylor seemed all too aware of these shortcomings. The picture he painted of his capacity to effect change was not one of naïve optimism, or any other form of optimism for that matter – ‘pragmatism’ and ‘making do with what we have’ were the take-home messages. This self-awareness came together in a sharp point with his response to a question from the audience, in which he stated that “there is no conceivable future in which the resource for enforcement will be able to match the nature and scale of the problem”. (Choo-choo! Next stop….)
Mathew, Goliath and the trusty tomato
The scale of the challenge will only increase over the next four years. The Conservative’s plans to increase the minimum wage to £10.50 by 2024 will certainly put more money into low paid workers’ pockets, but it will also increase the number of workers paid at the minimum wage and therefore vulnerable to illegal underpayment. The Low Pay Commission estimates that around one in five minimum wage workers were illegally underpaid in 2019. Assuming the same proportion of tomorrow’s workers are, that stacks up to just under 1 million employees short-changed by 2024.
Without the resources required to deploy any kind of serious and proactive approach to identifying and clamping down on cowboy-employers, Taylor has dusted off an old tool at the back of the shed: shame. One of the oldest forms of social control will be used to deter would-be cheaters, today taking the form of a published list of guilty employers instead of the pillory and rotten tomatoes of the 16th century. But how effective is the trusty tomato as a deterrent when pitched at million-pound multinational conglomerates?
The first list is yet to be published, although the scheme was announced way back in December 2018, but looking at previous attempts from the Government to shame organisations into changing their ways does not fill you with confidence. The Department for Business, Energy and Industrial Strategy (BEIS) has (attempted to) run a similar scheme in the past, publishing names of employers found to have illegally underpaid workers.
Wagamama still at it
Wagamama topped the most recent list, published in May 2018. From 2014 to 2016, they were found to have stolen £133,212.42 from 2,630 people. If Wagamama were hit with the largest fine that BEIS can levy, they would have been slapped with a £266,424.84 penalty – just 0.07% of Wagamama’s revenue for financial year 2018/19. I’m no behavioural scientist or hospitality tycoon, but I’m pretty sure that a financial penalty amounting to less than 0.1% of annual turnover is not an effective disincentive.
Business Minister Andrew Griffiths seemed to disagree, stating that the naming round “serves as a sharp reminder to employers to get their house in order”. That was back in 2018, and recent events indicate that Wagamama may need another reminder, and with a much sharper barb.
Flash forward to valentine’s day 2020 and the Independent Workers Union of Great Britain (IWGB) have organised a boycott of Wagamama in protest of their poor treatment of workers. Two years after they were named and shamed, IWGB have accused Wagamama of effectively underpaying the minimum wage by forcing long and unpaid wait times on Deliveroo riders. Seems like more of the same to me.
Which brings us back to our familiar head and his new body. With half the number of inspectors recommended by the International Labour Organisation, the defining feature of the British enforcement landscape is the fact that workers themselves are made responsible for both understanding and enforcing their rights at work. They are also responsible for reporting violations of those rights to the authorities, with a low chance of any positive outcome. Only one in two workers who win their Employment Tribunal case receive the financial awards they are due. For those who pursue further justice to force employers to pay out what they are owed, around a third of awards still remained unpaid. Other nations understandably opt for enforcement systems that are more of the kick-down-the-front-door variety.
It’s not all bad. The new enforcement body should make it easier for workers to report violations, and new shaming lists that name employers who haven’t paid out their Employment Tribunal awards are miles better than nothing. But we need more than a new enforcement body – we need boots on the ground kicking doors down. And there would be no need for new lists to shame employers who haven’t paid tribunal fees if someone had the power and will to force employers to pay the fees they owe in the first place.
This is not rocket science, it’s a matter of priorities. Invest in enforcement and rights will be upheld; don’t and watch them become nothing more than another set of empty promises. In the absence of a cash injection, Taylor’s appointment – with his reputation for being the ‘Good Work’ guy – merely wraps up the same broken system in new packaging and obscures the real issue in the process: chronic underfunding stemming from an ideology that prioritises business over people.