Unpaid Britain Project Towards a typology of non-payment

Towards a typology of non-payment summary 

A paper proposing a typology of non-payment of wages has been prepared for discussion at a workshop on 9th May.  This typology (following revision as a result of the workshop) will be used to help us pick case studies for the next stage of our research.

The full paper outlines categories which have been produced by other authors (including state regulators), and discusses factors considered to have potential relevance to for the construction of the typology. It also includes a brief summary of the Unpaid Britain project, followed by a discussion of the existing data on non-payment.

Click for full paper

The proposed typology of non-payment

Taking into account the various discussions and caveats that are outlined in the above working paper, we find there are four key dimensions to unpaid wages:

Consent; Intent; Means & Magnitude

Means (the way the wages have not been paid) and Magnitude (the size of the sum involved relative to normal earnings) are clearly important. They might determine whether restitution by the worker is pursued, the route by which this occurs, whether there is a role for regulators, and the impact of non-payment. But they are descriptive and determined by the circumstances and intent of the employer, and the degree to which workers’ consent may be given.

typology of non-payment

Non-payment might occur when imposed by circumstances (absence of funds, or catastrophic failure of payment system for example), or as a result of error (data recording mistake), or misinterpretation (misinterpretation of minimum wage regulations etc.)

These are distinct from circumstances where there has either been a decision not to pay, or one (even by default) not to rectify systemic problems which result in non-payment. Interviews suggested strongly that plausible deniability was common, but difficult to detect in official and administrative statistics, because it is feasible to rectify any loss in individual cases without disrupting the model or incurring penalties. This differs from the construction industry “knocking” (complete failure to pay outstanding wages) or deliberate insolvency associated with phoenix companies, in that those are detectable, and (in theory at least) subject to penalties and thus less sustainable as a business model. This could also apply to extreme examples such as forced labour or criminal extortion. These are evident non-payments.

Consent is not a relevant consideration when non-payment is imposed by circumstances, or where there is an error or misunderstanding, but is of significance for purposeful non-payment. The proposed typology separates informed consent, which includes some unlawful, but voluntary contracts and agreed delays to payment, from without consent which would include all other categories (such as not receiving entitlements of which the worker was unaware, as well as the more blatant unauthorised deductions of which they were fully aware).

Unpaid Britain Project Towards a typology of non-payment

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Unpaid Britain Typology Workshop

Have you ever had wages withheld or unpaid? Or helped someone who has? As a result of late cancellations, the Unpaid Britain project has two spare places going at our workshop on 9th May, and we would like to fill them with people with direct experience of unpaid wages.

The workshop is intended to help us with our research into this phenomenon. Our next phase will be the selection of case studies to look in detail at the causes, experiences and remedies for unpaid wages. However we feel that this cannot be done effectively without developing a typology of non-payment, to help us choose case studies that illustrate each type. We have developed a draft typology but the time has come for it to be scrutinised, and tested to ensure its robustness.  The Typology workshop will consist of 30 experts from a variety of backgrounds ranging from trade union, employment lawyers, academics, citizens advice, conciliation organisations, think tanks, charitable trusts, monitoring organisations and employers, all of whom have an interest in the subject of non-payment.

Held at Middlesex University’s Hendon Campus, the workshop will start at 12:30 with a light lunch reception, continue until 4.30 and end with a drink and a discussion. There will be short contributions from Anna Kyprianou Dean and Pro-vice chancellor of the Middlesex University Business School, Michael Reed, Principal Legal Officer (Employment) at the Free Representation Unit, Oxford University lecturer Jenny Chan (expert in Labour Rights in China), and project leader Nick Clark. However most of the afternoon will consist of discussions in working groups, as they scrutinise, critique and think of cases that fit or do not fit in to the Typology.

We would love to fill the two places now vacant. If you or any one you know has experience or expertise in the field of non-payment and is interested in attending on the 9th of May please contact us by emailing: e.herman@mdx.ac.uk.

The creeping notion of working for free

Yesterday’s Guardian carried the story of a recruitment agency advertising for warehouse staff who would have to complete a three-day unpaid “induction” (yes, I know it went online on Sunday, but I am old school and still read a print version). The agency (GB Recruitment) was recruiting for a logistics company (Wincanton) who in turn was running the warehouse for DIY retailers B&Q.  Quite apart from being a vivid illustration of the chains of labour supply now at work in the economy, it highlights what according to Unpaid Britain’s initial (if largely, at this stage, anecdotal) findings suggest has become a common practice, seen by many young workers in particular as normal practice.

This seems to be combining two factors. One is the gradual creep of the notion that some workers – as a working category I am calling them new entrants (or re-entrants) to the labour market[1] – have labour power that is worth little or nothing. The other is the ingenuity of employers in labour intensive sectors in finding ways of trimming labour costs so that they fall below the National Minimum Wage.

Unpaid training had already been identified as a problem area in the care sector, by HMRC . They found unpaid training to be the most common type of unpaid working time contributing to non-compliance with the National Minimum Wage. However, they seemed to suggest some circumstances in which this might be lawful:

We found instances where prospective workers attend pre-employment induction events to assess their suitability for employment or as part of the job application process. In the circumstance where this activity is not undertaken as part of their terms of employment or not for any form of remuneration paid to or benefit received by those attending, the time spent is not working time for NMW purposes” (p. 5).

In conducting research on internships in an earlier job, I was struck by the many ways in which the work of the young had been down-valued to the extent that even some of them accepted that their labour power had no market value, beginning with work experience at school, job placements at college or university, advice to “volunteer” to improve c.v.s and culminating with full-blown unpaid internships.  Wage-free labour has become embedded in some sectors of the labour market, such as the cultural industries where unpaid internships still abound, and entertainment trade unions such as Equity and the Musicians Union are being forced to campaign for young people to be paid at all.

Interviews conducted during the early stages of the Unpaid Britain project revealed an initial unpaid training (also known as induction, or trial shifts) has almost become a rite of passage for young workers. Staff from one advice organisation told me that they were aware of one employer who seemed to have a constantly replenished supply of young workers working “training weeks” for which they would never be paid, nor would they progress on to paid contracts, thus guaranteeing the company an almost free workforce. Of course abuse on that scale can hardly be a long term strategy, but the more limited unpaid induction, trial shifts and unpaid training can be found with relatively little research.

So for example last autumn one health and social care recruiter was advertising care worker posts in London for which there was an unpaid induction (of unspecified length), while another agency  was recruiting parcel sorters in the Midlands who would also be required to “complete an unpaid induction during unsociable hours”. But agencies do not appear to be alone in playing fast and loose with the notion of a wage/work bargain. A hairdressing apprenticeship scheme in North London, which claims to be sponsored (among others) by a London borough, the Skills Funding Agency, City & Guilds and the EU Social Fund, advertised vacancies for apprentices who might be “subject to a 6 week to a 6 month unpaid trial period”. This perhaps reflects the 2014 NMW (Amendment) Regulations which introduced new rules for traineeships for young people aged 16-24, excluding them from NMW rights – again suggesting that such workers have little value.

But then JobCentre Plus has for decades been organising work trials of up to 6 weeks, for which the worker receives no wage from the employer – only benefits (plus travel expenses) from the state. It is said to be “voluntary”, but it is work, and it is unpaid. Unfortunately, “…the TUC has accepted Work Trials. We are sympathetic to the plight of long-term unemployed people, unemployment is a threat to all workers and the people who need to be helped are our friends, neighbours and relatives.” (TUC 2008)

B&Q and Wincanton both told the Guardian that unpaid induction contradicted their policies, and that the advertisements had been withdrawn, but the idea of them did not appear out of thin air.  Economist Joan Robinson’s statement that “The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all”[2] is often used to justify all manner of abuses. But it is based on the notion that while the system denies (for those who have only their labour to sell) the means of sustenance to those who do not work, for those who do, work is the route out of poverty. But this notion is turned on its head if, in order to have the chance to be exploited, one must provide labour power for free. This is the lesson which is apparently being passed on to young workers, and is no doubt music to the ears of the abusive employer.

[1] This would include young workers (including working students), recent migrants, ex-offenders, those returning to work from long-term illness, and the long-term jobless, for example.

[2] Robinson, J. (1962) Economic Philosophy p.45