Bargaining power

London Essays – Issue 7: Work

Bargaining power

What use are unions in the digital era?

By Antonia Bance

It would have been a common sight throughout the dockland areas of east and south-east London: groups of men, carrying their own equipment, gathering for the call-on at 7.45am and 12.45pm, hoping to be chosen for a few hours’ work unloading cargo for the dock and shipping companies.

Only the lucky few would be selected. The rest would be sent home without work or wages. It was in the employers’ interest to have a large pool of men available for work, without having to pay them when there was no work. On the eve of World War Two, 100,000 dockers laboured in the Port of London, often living, with their families, in acute poverty.

Union organising and union-backed legislative change eventually brought some measure of security to the docks. The fight against casualisation and against the arbitrary power of the boss to hire and fire was won in much of the labour market. Limits on the working day, rules on safety, protection against layoffs, decent wages – all these were negotiated and enforced by strong unions in organised workplaces, becoming the foundation for legal changes that gave rights to all working people.

Now, the changing nature of work in the 21st century means that battles we thought were won have to be refought. Instead of the dockers assembling for call-on, today’s workers wait at home hoping their smartphone will bring news that they will work today. Not getting the hours they wanted means a scramble to find work and to pay bills and rent, just as the dockers and labourers scrambled before them. The arbitrary decisions that characterised workplaces of the past are back in a modern form. A waiter or bartender is unlikely to raise a concern about working conditions when, on a zero-hours contract, the boss doesn’t need to sack you: he can simply take away next week’s hours as punishment. A delivery driver finds that he or she has been “deactivated” without warning and can’t use the platform to find work anymore. An app pings in the pocket of a homecare worker with the address of the next client but without enough time to travel there and properly meet the client’s needs. A wrist-worn gadget decides the warehouse picker is taking too long and assigns a red flag, putting their employment at risk. All of these are faceless decisions that leave working people with no recourse to help or advice, and precious little dignity or control.

In London in 2017, nearly 650,000 people have insecure, precarious work, one in 10 of the capital’s workers. This includes workers in seasonal, casual, temporary or agency work, those on zero-hours contracts, and low-paid self-employed workers.

Over the past five years, the number of people in insecure work in London has shot up by more than 133,000 – over a third. This growth has been partly powered by gig economy companies like Uber and Deliveroo, and by the huge increase in the home-delivery workforce. But we have also seen a large increase in insecure work in traditional sectors like social care, restaurant and pub work, and education.

What all these shady, insecure forms of work have in common is that wages fluctuate without warning; workers miss out on key protections like sick pay; and people are at the mercy of bosses who can withdraw their hours or even take them off the job with no notice.

Some may protest that these forms of work are chosen by workers for flexibility and freedom, and that may be true for skilled workers, or for people on higher wages. But for those on low-to-median incomes, the fragmentation of employer relationships and the adoption of insecure contracts across whole sectors is not a choice but an imposition – one where, far from the onus being on the employer to plan the pattern of work so as to prevent downtime, the whole risk is borne by the worker.

Meanwhile, self-employment tax and National Insurance arrangements mean big savings for bosses if they push workers into bogus self-employment.

While the trend to casualisation has been clear for some years, it has recently shot up the political agenda, not least due to unions exposing the shady practices of unscrupulous employers. The government is concerned enough to have commissioned a review – led by the RSA’s Matthew Taylor – into the changing nature of work, which is due to report in summer 2017.

Unions hope the Taylor Review will propose concrete legal changes to strengthen the rights of workers in the casualised economy. Tougher rules to protect agency and temporary workers and guarantee a minimum number of hours are overdue.

Any serious attempt to crack down on precarious work has to have worker organisation in unions at its heart. Every society that has achieved some measure of income equality has done so with strong trade unions pushing for security and decent wages – and negotiating for them, company by company.

Proportion of workforce in insecure work (%)

The key is to increase collective bargaining coverage, not just individual union membership: that’s what gives unions the levers to improve conditions, the power that comes when workers join together and make employers come to the table and negotiate. It is rooted in the implicit and rarely used act of last resort: that workers could withdraw their labour, bringing the business of that workplace to a standstill.

For effective collective bargaining, unions need sufficient density of union membership within workplaces. Union membership is falling, and fast. Nine in 10 under-30s on low-to-median incomes work in the private sector – but only 6.3 per cent of them are in trade unions. 1 If current trends continue, then overall across all sectors, less than 20 per cent of employees will be in a union by 2030. 2

So the need to increase union membership is urgent, concentrating first on winning a critical mass in key companies and on building a union proposition that meets the needs of younger workers. The TUC is investing heavily in user research and in prototyping new models of collective organisation targeted at under-30s in the private sector. 3 Many union leaders see the urgency, and the outline of a new approach to organising is apparent in some of the best union campaigns of the last 18 months.

At Sports Direct, Unite’s organising, political pressure and media exposés have forced concessions from management; at Uber, GMB’s well-timed legal challenge has exposed the bogus nature of self-employment in the driving of rebranded minicabs. We are also seeing union-led sector frameworks for workers in the creative industries, which have set minimum standards and stopped undercutting, offering a modern form of collective power for genuinely self-employed workers outside the employer-employee relationship.

Some may argue – as Ryan Avent does elsewhere on these pages – that today’s union model is outdated for the challenges of the modern workplace. But rather than abandoning institutions which have nearly two centuries’ experience of organising working people – with all the assets and capabilities that brings – unions should reform themselves to meet the challenges of the modern workplace and the expectations of modern workers. To do otherwise would consign the union movement to managed decline and would abandon the modern-day counterparts of those dockers and labourers who organised themselves and fought for an end to casualisation.

A changed labour market should also lead to the freeing of unions from outdated restrictions. Unions should have the right to go into workplaces and talk to workers. Not only would that help build a platform from which to bargain over terms and conditions, it would also be a cost-free reform that would have an immediate effect on the behaviour of bosses, who would no longer be able to hide exploitation.

Collectivism also offers a way to improve conditions and pay in highly casualised sectors. Creating modern wages councils would bring collective oversight as a complement to union recruitment in hard-to-organise sectors such as retail, hospitality and social care. These sector-specific partnerships between employers, unions and government could set compulsory standards for pay, conditions, progression and training, helping to improve practices and stop responsible employers being undercut by unscrupulous operators.

A caution, though: when thinking about the challenges of bringing security to workers in the gig economy, the temptation is to turn first to digital. I am as keen as anyone to consider harnessing disruptive digital to serve worker interests. But the prevailing ethos in tech is individual and consumer-led, and, without an underpinning analysis of power, technology alone won’t meet the scale of the challenge to make every job a great job. When workers need to keep the money coming in, those at the sharp end of the labour market can’t use reviews to pick a better boss. Choice is an illusion without income security. That’s why, if you want to build a miracle app to help workers in this fast-changing labour market, you’ve got to think about power and how you get it for working people. And, in that, your partners should be the union movement.

Working people, acting together, have the power to stand up to exploitation. Collective power, organised as unions, is the way in which we won improvements to our working lives in the last industrial revolution and how we have improved working conditions ever since. When new forms of exploitation are multiplying, we need stronger unions more than ever. That’s how we will win security for precarious workers in the gig economy in London and nationwide.

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