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ParcelForced Labour?

If you open your door to a delivery man, you could be looking at a slave.

Cleaners and delivery drivers in the gig economy are being subject to financial penalties for not showing up for work – that’s beyond docking the pay for work not done: it’s a fine on top. According to the Guardian, for Parcelforce, part of the privatised Royal Mail Group, it can be £250 per day on top of the loss of £200  for a day not worked. However other companies, including DPD, have been accused of similar practices.

The practice must create tremendous pressure to go to work, even if you are sick or you have an important appointment. According to the ILO, “Forced labour refers to situations in which persons are coerced to work through the use of violence or intimidation, or by more subtle means such as accumulated debt, retention of identity papers or threats of denunciation to immigration authorities.” Automatic fines of an amount greater than the daily wage would seem to qualify.

No doubt the practice is entirely legal, probably through contracting with the workers concerned on the basis that they take responsibility for providing a service. What they also take is all the risk. It is very far from a contract negotiated between equal parties.

Royal Mail Group’s most recent Modern Slavery Act statement, for some reason, makes no mention of the problem.

 

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How much is a human being worth?

Over recent months the government has declared that employees (including bosses) should be neither over-paid nor under-paid. That’s fine – but how do you judge what is too much or too little?

It turns out that at the top, the level of pay for CEOs currently bears no relationship to performance, as measured by return on capital invested. Yet pay at the top is typically set by a dedicated remuneration committee. The problem is that the members of the committee are part of the magic circle of top employees themselves – so of course they behave ethically and treat others just as they would like to be treated. The result is that top pay escalates without apparent limit.

For those companies that obey the law, at the bottom of the employee payscale there is the minimum or ‘living’ wage which will in practice define the pay of the lowest paid. (Actually there is a big space below that characterised by under-employment and zero hours contracts, but that is perhaps another story.) As far as employees go, there is a proposal for companies to publish the ratio of the pay of their highest paid individual to the average wage. Why the average? Because the average is higher than the lowest wage, which will usually be the minimum wage, and so yields a more comfortable ratio.

On the technical side, companies should simply be transparent about the ratio of the highest to the lowest paid. A number of organisations in the charitable sector already declare that. And companies should also publish the ratio of the rate of increase of the CEO to that of the rate of increase of the company’s return on capital – as well as their highest to lowest pay ratios.

But perhaps more importantly in relation to governance, not only should remuneration committees include employee members as has been suggested, but their remit should be extended to consider the pay of all employees. That would go some way to bring the full spectrum of employees face to face with the full spectrum of pay rates. Maybe that will increase the appetite for fairness.

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Is Plan A a stitch-up? Or just over-spun?

Labour Behind the Label has released a report that criticises the achievements of H&M and M&S in their clothing supply chains.

M&S in particular comes off in a bad light. Its 2010 Plan A commitment to deliver a living wage appears to have failed. What the report establishes is that workers in key parts of M&S’ supply chain are still living in poverty. But as the report acknowledges, M&S cleverly did not actually commit to delivering people from poverty – what they committed to was more like ‘enabling’ fair wage conditions to arise. And in 2015, when the commitment was supposed to have been completed, it just turns out that they haven’t arisen.

Of course M&S is not alone in this. It is a widespread failing of much CSR that public statements are carefully crafted to convey the impression of responsibility while actually, technically allowing the company to avoid blame if things don’t work out. That way the PR gain is maximised – at least in the short run.

In the long run people will simply not believe them.

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Can you audit your way out of slavery, or do you have to pay the price?

Channel 4’s report on conditions for fruit packers reveals regular, awful treatment of the workers supplying the supermarkets.

No doubt all the supermarkets’ suppliers are regularly audited to guard against just this sort of exploitation. So what has gone wrong? The immediate answer is that the ‘unannounced, random audits’ were not nearly random or unannounced enough. In these circumstances, the only audit that will work is the one that the company does not know is happening. Channel 4 is really providing just this sort of ‘mystery audit’ service for the supermarkets.

But all auditing is operating after the fact. To prevent exploitation happening in the first place, the causes have to be addressed. And the deeper cause here is the relentless downward pressure on prices that the supermarkets exert on their suppliers. Saying each year ‘next year we will pay you 5% less for the same product’ will lead to slavery. If the supermarkets really want lower costs, they should work with their suppliers to figure out how it can be done without exploiting anyone.

Or just pay what decent work costs.

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The price of a cup of tea

The BBC’s investigation of workers’ conditions on tea plantations in Assam makes depressing reading. The squalor and poverty behind one of the world’s favourite drinks is appalling.

It is striking that the response of Unilever, a company often held up as a beacon of responsibility and sustainability, is so weak. According to the BBC, Unilever knows there is more to do, but that ‘progress has been made’. Presumably that means that conditions were even worse in the past. And does Unilever measure the impact of its operations on tea workers at the bottom of the supply chain?

Also, the Rainforest Alliance that operates one of the more widely used certification processes admits that its audit process, which is based on annual inspections, is inadequate. Moreover many supply chain inspection processes are based on less than annual inspections. So the BBC investigation has the potential to undermine confidence in a number of  well-known certification processes.

The response to the Rana Plaza disaster was a legally binding commitment involving the unions. Is it time for something similar for the tea industry?

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Asda: discounting women?

It may not be quite two women for the price of one man, but Asda appears to have a problem with equal pay. The wider Walmart group, of which Asda is the UK arm has a long history of troubled labour relations – but you might expect a better outcome in the UK, since it is the only country in the world in which the company recognises unions.

On this issue of equal pay, the normal PR approach appears to be unraveling. Despite the prominent news coverage of the group action against the company, there is no press release on its website relating to the issue. Moreover the company response to the issue seems to be confined to this statement: “A firm of no-win, no-fee lawyers is hoping to challenge our award-winning reputation as an equal opportunities employer. We do not discriminate and are very proud of our record in this area which, if it comes to it, we will robustly defend.”

It is sad to see that what the company is concerned with is just its reputation, not its actual equal opportunities performance. The logic of this is that if it continues to perform well in good employer rankings, all is well, irrespective of any suffering on the ground.

There is a lesson in this for all those companies that are driven by reputation: if you focus on reputation, you will fall on your face; if you work on your performance, you may be graced with a better reputation.

 

 

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Amazon: a tale of zero-rights contracts

What makes a good retailer? Is it minimal packaging? Is it community donations? Or is it being able to use the toilet?

The answer, of course, must be all three. But while Amazon has worked on packaging and giving money away, it is working too hard on making it in the first place. According to a Channel 4 news item, Amazon warehouse workers are given ‘contracts’ barely worthy of the name with no job security and as a result can expect them to work under draconian conditions. This includes actively minimizing toilet breaks.

On the positive side, it does not yet appear that staff are expected to wear nappies to cope with the demands of the job. This has been an option actually suggested elsewhere, especially by some of the more zealous call centers.

Zero hours contracts are very widespread and typical for the cleaners in a great many offices. They transfer most of the risk of work onto the worker, but little of the reward.

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Time for in-sourcing?

The new accord between retailers and unions on worker safety clearly represents progress. Particularly because it involves unions directly. But it also raises big questions on how far there is to go.

Firstly, of course, how many retailers will actually sign up to it? That has been the media focus so far. But then, what about countries other than Bangladesh? What about Vietnam, Turkey – or even the UK?

And the focus of the accord is on textiles and garment manufacture. Beyond that there are health and safety concerns in many other sectors also.

And of course the big omission is pay. Given the assessment that doubling the wages of workers would add only 2p to the price of a T-shirt, isn’t it time that retailers took their responsibilities more seriously? Perhaps it is even time to consider in-sourcing?

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CSR jobsworth

Why is the CSR industry silent on Beecroft? The Beecroft Report recommends that companies should be able to sack workers as soon as they have hired them.

Is CSR above politics – or rather afraid of it? Your view of this will partly depend on whether you agree with the Institute of Directors that this will create more jobs. And whether you think that the shifting of all the risk onto employees is unjustifiable.

But where is the discussion of the company’s responsibility in this? The issue should provoke intense debate in CSR circles – not silence!

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Anti-suicide pledges are not the way forward

Foxconn seems to have a problem with its workforce. The whole working environment – including pay and the treatment of its workforce are too much for its workers: they are taking their own lives.

This is a global problem. Foxconn makes parts for Apple and Sony. There are other Chinese companies with similar problems. And the issue is by no means confined to China – France Telecom has suffered similar problems, with over 25 suicides over 18 months.

The solution cannot be to ask workers to sign pledges not to commit suicide. That will only increase the pressure on them. And it is demeaning. The solution must involve a wholesale review of working conditions, led by unions and accompanied by much greater transparency from the companies involved.