In the first legal test of the government’s job retention scheme (JRS), Unite, representing hospitality workers, has secured clarification that the scheme can be used by companies in administration during the Covid-19 crisis.
Unite is now calling on restaurant chain Carluccio’s workers, made jobless in March when it went into administration to respond to the administrator’s offer or get in touch with their union so that they can access the scheme and establish some wage security.
The union took action because it was concerned that those workers who had not responded to an offer by the administrators faced the prospect of being made redundant over the Easter bank holiday weekend.
Insolvency laws mean that administrators normally have to dismiss workers within 14 days of their appointment to avoid liability for their employment and wages, but the court’s new direction means that the administrators can give more time for employees to respond.
This is the first litigation involving the JRS and provides the blueprint for administrators to make use of the scheme to protect jobs during the virus crisis.
Unite’s assistant general secretary for political and legal affairs, Howard Beckett, said, “In taking this action, Unite has secured these workers some wage security. We will not hesitate to go into court to ensure our members livelihoods are protected in these difficult times.
“The new job retention scheme was put together in record time and its interaction with other areas of law – in this case insolvency law – needed to be looked at by the High Court.
“This important decision ensures that no one is left behind in a hospitality sector reeling from the effects of the shutdown,” he added.
A definite win thanks to Unite action, but vigilance is still needed. A new report from the Institute of Employment Rights (IER) today, April 15, believes government reassurances that agency workers and those on zero-hours contracts will be covered by financial support schemes may be “misguided”.
It could be that millions of workers face destitution through a lack of support from the government’s coronavirus income protection plans, the report claims.
The IER believes ‘there remains a financial incentive for employers to cut rather than furlough casualised labour’, said report author Lord John Hendy QC.
This could mean millions of self-employed people, those holding down two jobs, or with caring responsibilities could also fall through the gaps.
Up to 9m workers may lose out on statutory sick pay, including those in the gig economy, agency workers or on zero hours contracts, and over seven million workers may not be eligible for the job retention scheme.
“The government’s job retention scheme and related self-employed income support scheme is a welcome safety net for millions in their time of need,” said Lord John Hendy QC.
“However, government reassurances that the millions of casual workers, as well as low-income self-employed people will be eligible for support may be misguided.
“The precariously employed or low-income people that were the most at risk for financial hardship before the coronavirus crisis are still the most at risk of ruin today,” he added.
The Covid-19 pandemic has exposed the crisis of low-paid, insecure work which has been allowed to grow in the past decade.
Many workers on zero-hours contracts don’t know if they will have enough money to pay the following month’s rent or food bills as a result of the huge growth in gig economy and other insecure jobs.
Unite’s South West regional chair, lorry driver Kev Terry, says many casual staff in the local rural and agricultural sector are migrant workers. But all workers in insecure work are finding times especially tough.
“Local employment is pretty scarce, and people understandably want secure, full-time work, but many of the jobs on offer are on insecure, zero-hours contracts.
“We deal with cases where people turn up for work but are told there is no work for them that day.”
Unite South West regional officer Janet Wall, agrees, saying people are now often glued to their mobile phones, waiting to receive a call or text telling them there is work available that day.
“It is a modern day version of a despicable form of employment which should have been consigned to history. It has merely returned in a different form.
“This region has many businesses which employ staff on zero-hours contracts, including hospitality, clubs and hotels.
“It suits the employer, but it doesn’t help people pay the bills or build their life. I have a full-time job, with a pension, sick pay and holidays – my son doesn’t know that kind of work exists anymore.”
It’s a sorry state of affairs. “We welcome and support the government’s aim to help those who have lost their income due to the coronavirus crisis, and will continue to offer our input to help prevent the people identified in this report from falling through the cracks,” said Andy McDonald, shadow secretary for employment rights and protections, commenting on the report.
“But,” he warned, “When this tragic period in our lives has come to an end, we must take stock. Through stronger labour laws and a re-examination of the way our economy functions, we can help those hit hardest by this pandemic survive the coming recession.
“After all, many of those workers branded ‘low-skilled’ – and low-paid to suit – are the people currently risking their lives to save others.”
It’s a battle cry entirely supported by Unite who has previously stated it will be “leading the way in the battle to reshape the economy and society once the war against the virus is won”.
Previously responding to chancellor Rishi Sunak’s announcement of incomes assistance for self-employed workers during the Covid-19 pandemic, Unite general secretary Len McCluskey said the government could bring economic security to millions of precarious workers by ending ‘bogus self-employment’ and declaring their employee status.
McCluskey called for a simple programme, straightforward and speedy to avert a collapse in the household incomes of millions.
With the publication of the IER report it is now even more urgent that the government heeds Unite’s words.
“By far the most effective way to give many of these workers the economic security that they need is to end the abusive status that is bogus self-employment,” McCluskey has previously said.
“Ministers can do that at the stroke of a pen, declaring these workers employees and so bringing them into the furlough scheme, where they can access up to 80 per cent of their incomes. The government could do this easily, by statutory instrument possibly, and I am sure would attract cross-party support for doing so.
“We also need the chancellor to do more to compel employers to access the jobs retention scheme. This scheme is a radical departure for this country, but it is in danger of not delivering on its promise because employers will not use it, opting instead to send workers home to live off poverty sick pay.”
He concluded, “Unite has said that it will pull every lever available to compel employers to use the scheme, including legal action if needs be. But government urgently needs to set out to business why using the scheme is the most effective and responsible way of playing their part to avert collective economic disaster.”
By UNITElive team