Guest Blogpost from Richard Lynch: Employment rights roundup

National Minimum Wage rates are to be increased for adult workers and apprentices from 1 October 2012 but current rates are to remain frozen for young workers. The adult rate will be increased by a miserly 11p to £6.19 an hour and the apprentice rate will be increased by an even more miserly 5p to £2.65 an hour. Rates for young workers will remain unchanged, at £4.98 an hour for 18-20 year olds and £3.68 an hour for 16-17 year olds. This means that all workers on the minimum wage will suffer a pay cut in real terms and it is disappointing that the Low Pay Commission (which has union as well as business representation) should have unanimously recommended the new rates. Still, realising that they will never be required to work for such a pittance, must have made the decision easier for Committee members.

State benefit rate changes from 6 April 2012 include: Jobseekers Allowance – up £2.80 a week to £56.25 for under-25s and up £3.50 a week to £71 for over-25s; Statutory Maternity and Paternity Pay – up £6.72 a week to £135.45; Statutory Sick Pay – Up £4.25 a week to £85.85. However Child Tax Credit, which had been available to parents earning up to £41,000 a year, will now be restricted to parents earning up to £26,000 (one child), £32,000 (two children) and £38,000 (three children). Working Tax Credit is also being restricted and couples with children will now have to work 24, rather than 16 hours a week to qualify.

Unfair dismissal protection could be weakened for up to 2.7 million employees following the decision to double (to two years) the qualifying period for making unfair dismissal claims to Employment Tribunals, from 6 April 2012. Even though workers in employment at that date will still be able to make claims after one year’s service, there will be a disproportionate effect on some groups, according to the TUC. These will include women working part time, employees from black and minority ethnic communities and young workers, whose length of service tends to be shorter than for the majority of employees. The coalition argues that watering down unfair dismissal protection will help boost recruitment but the TUC, rightly in our view, believes it will encourage a ‘hire and fire’ culture which will lead to increasing numbers being shown the door.  However, it shouldn’t be forgotten that short-service workers who are dismissed will sometimes be able to make ET claims on issues such as discrimination. A union member I have been representing was recently dismissed after complaining that the manager was being racist towards her. Unable to claim unfair dismissal because of short service, the member made a claim of race discrimination and victimisation (suffering a detriment as a result of complaining about discrimination). That resulted in a decent out of court settlement, despite the fact that an unfair dismissal claim could not be made.

Moving to part time work after maternity is not a legal right in the UK, although there is a right to request it and employers are supposed to give serious consideration to such requests. It is therefore encouraging to note that HSBC has announced that it will now guarantee a part-time role at current title and salary grade, if requested, to all staff returning from maternity or paternity leave. This is believed to be the first time that such a large company has offered this guarantee and it is hoped that it will increase pressure on others to do likewise. HSBC also offers 14 weeks’ maternity leave on full pay (as opposed to the statutory six weeks at 90% of pay) and up to 12 days leave for fertility treatment a year.

Parental leave rights should have been improved from 8 March 2012 but the coalition has postponed the improvement. The current rule is that employees with at least a year’s service can take up to 13 weeks’ unpaid leave (in one week units)  for each child, provided the child is under age 5, under 18 if disabled or within five years of placement if adopted. There had been EU agreement that this would rise to 18 weeks but this will not now happen until 2013.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

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Guest Blogpost from Richard Lynch: Paying the price for recession and stagnation

It is now four years since the worst global recession for over 70 years began to impact on UK jobs – and working people are still paying a high price for it and for the stagnation which has followed it. During those four years:

  • Unemployment increased by over a million, from 1.61 million to 2.67 million, and is still increasing.
  • 2.68 million people, 10% of those employed at the start of the recession, were made redundant.
  • Underemployment doubled, with the number of people in part-time jobs because they couldn’t find full-time employment rising from 670,000 to a record 1.34 million.
  • Unemployed people made 14 million claims and repeat claims for Jobseeker’s Allowance and received JSA payments which were worth a mere 10% of average full-time earnings.

But it was not just the unemployed and underemployed who lost out, as a recent report from the Chartered Institute of Personnel and Development showed:

  • Two thirds of those who returned to employment after being made redundant found that their pay, on average, was 28% lower than before, and lower still for those who couldn’t find work on the same hours as before.
  • Those who managed to keep their jobs suffered as well because the recession and unemployment resulted in lower pay increases or none at all, and left the average worker £3,000 a year worse off than if pay had increased at pre-recession levels.
  • The cost to employers of making 2.68 million people redundant varied from sector to sector but is estimated to have cost a total of £28.6 billion.
  • And the cost to the economy, in terms of lost output, is estimated to have been at least £87 billion (6% of GDP) and possibly as high as £135 billion (10% of GDP).

All of this shows that it is not just the unemployed who have been paying a high price for the recession in jobs but people in work, many employers and the economy as well. And unless action is taken to get the economy growing again, something which did not feature in the recent budget, we will continue to pay a high price for probably years to come.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost: Richard Lynch on Inflation

There was a further fall in inflation in February, the latest month for which figures are available, but prices are still rising faster than wages and than in competitor economies.

The figures for the year to end February 2012 (with end January figures in brackets) are as follows:

Retail Prices Index (RPI)                                                                –                              3.7% (3.9%)

RPI excluding mortgage interest (RPIX)  –                              3.8% (4.0%)

Consumer Prices Index (CPI)                                      –                              3.4% (3.6%)

The main downward pressure on the RPI came from price rises in motoring expenditure and fuel and light, while the main downward pressure on the CPI came from domestic electricity and gas, recreation, transport and electrical goods.

Nonetheless there were still upward pressures on both the main indices. For the RPI these included: alcohol and tobacco (6.1%), beef (11.6%), lamb (13.2%), pork (9.1%), butter (10.3%), coffee and beverages (13.7%), electricity (10.1%), gas (17.5%) and vehicle tax and insurance (10.9%). Upward pressure on the CPI included increased costs of fuels and lubricants (5.3%), education (5.1%), jewellery, clocks and watches (8.6%) and transport insurance (11.6%).

UK inflation, as measured by the CPI, is now only the seventh highest in the EU but is above the EU average of 3% and the Eurozone average of 2.7%. It is equal to the inflation rate in Italy but is higher than in France and Germany (2.5%), Spain (1.9%), Greece (1.7%) and Sweden (1%). The UK rate is also higher than that in China (3.2%), the US (2.9%), Switzerland (-1.2%) and Japan (0.5%).

Predictions are that inflation will fall further over coming months but these are likely to be affected by the current record high prices for oil, anticipated higher prices for food, and the increase in the price of postage stamps (by 14p to 60p for first class and by 14p to 50p for second class).

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: “Mixed picture on pay”

The latest statistics show a mixed picture on pay, with figures from the pay research organisations reporting a continued improvement on last year but Office for National Statistics figures apparently going in the opposite direction.

The pay research organisations’ median settlement figures for the three months to end February 2012 (with end January figures in brackets) show the following:

Income Data Services (IDS)                                          –              3.0% (3.0%)

Labour Research Department (LRD)                        –              3.0% (3.0%)

XpertHR (formerly IRS)                                                  –              2.6% (3.0%)

Office for National Statistics figures had been expected (by this writer, at least) to follow the pattern above but their latest figures, for the three months to end January 2012, were down on the previous month’s figures, as outlined below:

Average total pay (including bonuses)                    –              1.4% (1.9%)

Average regular pay (excluding bonuses)             –              1.7% (1.9%)

According to the ONS figures, average total pay in January was £461 a week (£23,972 a year) and average regular pay was £438 a week (£22,776 a year). According to LRD, average full-time pay is £606.70 a week (£31,548.40 a year).

Both IDS and LRD believe that 3% is likely to become established as the going rate for private sector settlements in 2012. This view is backed up by Towers Watson Data Services, which expect companies in the UK and Europe to raise pay by an average of 3% this year. XpertHR, however, is more pessimistic and expects 2012 settlements to fall to around 2%, with the introduction of pension auto-enrolment in big companies in October likely to depress pay increases.

Of course the figures above relate mainly to the private sector and pay increases in the public sector are still more of an aspiration than an expectation. With most pay freezes in that sector now in their third year, it was something of a surprise for the Office for National Statistics to announce recently that the gap between hourly rates in the public and private sectors was widening, with rates in the former now 8.2% higher than those in the latter. One possible explanation for this is that low-paid jobs (cleaning, catering, waste disposal, caretaking etc) have been increasingly outsourced by the public sector, leaving a larger proportion of higher-grade roles in the public sector than before. The increased proportion of private sector employees having to do part-time work, due to lack of full time roles, is another possible explanation.

And of course there is a lot of almost criminally low pay in retail, hairdressing, security and other parts of the private sector. This will not be helped by this month’s decision to freeze the National Minimum Wage for young workers and to increase it by only 11p an hour for workers aged 21 and above.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Another bad year for jobs?

Unemployment
Unemployment (Photo credit: born1945)

2011 was a bad year for unemployment and underemployment and, if the latest Labour Market Statistics are any guide, 2012 looks like being at least as bad. These statistics, which mainly cover the three months to end January 2012, show that:

Unemployment was 2.67 million, up 28,000 over the quarter and 148,000 over the past year. The unemployment rate was 8.4% of the economically active population, up 0.1% on the quarter and at a level which was last exceeded in October 1995 (when John Major was Prime Minister).

Unemployment amongst JSA claimants was 1.61 million in February, up 7,200 on the previous month and 162,000 on the previous year. This left the claimant rate at 5%, unchanged from January but up 0.5% on the previous year.

Youth unemployment was 1.04 million, up 16,000 over the three months to end January and equivalent to 22.5% of economically active 16-24 year olds. However, separate figures showed that the unemployment rate for black youth has been rising at almost twice that for white youth and that unemployment amongst young black men has risen from 28.8% to 55.9% in the past three years.

Underemployment also increased with the number of people working part-time because they couldn’t find full-time jobs up 110,000 to 1.3 million, the highest figure since comparable records began in 1992.

On the slightly less negative side, there was a fall in long-term unemployment – by 12,000 in the number of those unemployed for over a year and by 25,000 in those unemployed for over two years. However this still left 855,000 in the former category and 405,000 in the latter. There was also a fall in the economically inactive rate for 16-64 year olds not working but not included in the unemployment figures. Numbers in this group fell by 27,000 to 9.3 million, giving an inactivity rate of 23.1%. However, the fall was largely due to the effects of a government campaign which contributed to cutting the number of people in the long-term sick category by 67,000 to 2.09 million. In addition to this, the number of job vacancies increased by 15,000 to 473,000 but this still left an average of 5.6 unemployed people chasing every vacancy.

Unfortunately these crumbs of good news appear unlikely to presage a downturn in unemployment, as the economy is still flat-lining, consumer spending and business investment are at historically low levels, companies are still going bust and the recent budget did little to change the situation. The public sector, which cut 270,000 jobs last year, is also continuing to make cutbacks and recent Office for Budget Responsibility projections indicate that a total of 700,000 jobs will have gone by 2015 and 880,000 by 2017. There is also likely to be a post-Olympics jobs cull in certain sectors, including in Balfour Beatty where an estimated 1,500 jobs are believed to be at risk.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: “A windfall for the rich and we’re paying for it!”

The March budget was delivered at a time when the economy is stagnating, output is still below 2008 levels, public and private investment is falling and unemployment and poverty levels are rising. Yet the coalition picked this time to give a windfall to the richest people in the country by announcing a tax cut of from 50p to 45p in the pound for earnings over £150,000 a year. And the people who will have to pay for it include pensioners and some of the poorest families in the country.

The windfall is worth an estimated £3 billion to the 300,000 highest earners in the UK – an average tax cut of around £10,000 a year or over £40,000 a year to the 14,000 members of the group who earn over a million pounds a year. Amongst the people who will benefit from it are Barclays’ Bob Diamond (whose 2011 package was worth £25 million), Reckitt Benckiser’s Bart Brecht (£12.1 million), Shell’s Peter Voser (£10 million plus), Barclays Rich Ricci (£10 million), FT-owner Pearsons’ Marjorie Scardino (£9.6 million), HSBC’s Stuart Gulliver (£7.1 million) and GlaxoSmithKline’s Andrew Witty (£6.7 million). The Chief Executives of FTSE 100 companies (average £4.2 million) will also benefit handsomely, as will many members of the coalition cabinet, including David Cameron who is expected to be in line for a £3,000 saving.

Companies will also benefit from the budget as a result of the decision to cut corporation tax from 26% to 24% but this is unlikely to interest companies like Amazon, which had UK sales of over £7 billion in the last three years and apparently paid no UK corporation tax at all!

But it is working people and those who can least afford it who will be expected to pay for this windfall to the super rich. They will include 4.4 million over 65s who will be £83 a year worse off on average because of Osborne’s ‘granny tax’ and people who become pensioners from next April, many of whom will be £285 a year worse off because more of their pension will be taxed. People getting tax credits will be penalised as well, due to the main element of working tax credit being frozen and eligibility criteria being changed for working and child tax credit. One result of this could be that as many as 850,000 families on modest and middle incomes could lose all of their child tax credit, worth around £545 a year. And around 212,000 working couples earning less than £17,000 a year could lose all of their working tax credit if they are unable to increase their working hours. This could mean a loss of over £3,000 a year and would be a disaster for some of the poorest working families in the country.

Labour was right to describe the changes to tax and benefits as one of the most ruthless assaults on the finances of low and middle income earners ever seen. And Ed Milliband was right to launch a savage attack on the Chancellor’s proposals on budget day. But Labour needs to show more leadership and organise a far more aggressive campaign against the coalition’s inept handling of the economy, bias towards the super rich and attacks on working peoples’ interests. The Unions also need to show more leadership and all of us need to stop agonising and start organising in our own workplaces and communities as well. Austerity for the poor is not the answer to Britain’s problems! We need to reject it and fight back!

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: How has work changed in the past 60 years?

There is a lot of talk at present about how life in Britain has changed over the past 60 years – but how has work changed? The Chartered Institute of Personnel and Development (CIPD) looked at this recently and, amongst other things, found the following:

  • The working age employment rate for men has fallen from 96% to 75% and has risen from 46% to 66% for women.
  • The proportion of people working part-time has increased from 4% to 25%.
  • The number of people in manufacturing jobs has fallen from 8.7 million to 2.5 million. However, the proportion of people in managerial, professional and technical jobs has risen from 25% to 44%, while the proportion in sales and customer services has risen from 6% to 16%.
  • Trade union membership has fallen from 9.5 million (40% of workers) to 6.5 million (26%), while the number of people in personnel (HR) has risen by 2,000% from 20,000 to 400,000.

One wonders how far the last two statistics go in explaining the many problems facing people at work in Britain today.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Unemployment figures are still dreadful

The latest Labour Market Statistics, which mainly cover the three month period to end December 2011, provide more bad news on jobs and suggest that there is worse to come.

Overall unemployment increased by 48,000 to 2.67 million over the quarter, giving an unemployment rate of 8.4%. The figure for the number unemployed was 179,000 higher than a year earlier and included 860,000 who have been out of work for over 12 months. The number unemployed for two years or more was 423,000 over the same period.

Male unemployment increased by 16,000 to 1.55 million and female unemployment increased by 32,000 to 1.23 million. Youth unemployment increased by 22,000 to 1.04 million, giving an unemployment rate for 16-24 year olds of 22.2%.

unemployment
unemployment (Photo credit: Sean MacEntee)

The number of people working part-time because they could not find a full-time job increased by 83,000 to 1.35 million over the quarter, the highest figure since comparable records began 20 years ago.

The number of ‘economically inactive’ people fell by 78,000 to 9.29 million, giving an economic inactivity rate of 23.1%. (Economically inactive people are 16-64 year olds who are not working but who are not included in the unemployment figures because they had not been looking for work over the previous four weeks and were not available to start work within the following two weeks. They include the long-term sick, home makers, early retirees and those who have simply given up trying to find work.)

The number of Jobseeker’s Allowance claimants increased by 6,900 in January 2012 to 1.6 million, giving a claimant count of 5%.

The number of job vacancies increased by 11,000 to 476,000 in the three months to October 2011, but this still left an average of over 5.6 unemployment people chasing every vacancy.

According to the Financial Times, most economists expect unemployment to rise further over the coming months, with many predicting a peak of 2.8 or 2.9 million.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: It’s time to make a breakthrough on pay

Things are finally beginning to look up on pay in the private sector, with January settlements higher than they have been for several years and the gap between pay and price increases now down to below 1%.

The average settlement figures for the three months to end January 2012 have also improved with Income Data Services and Labour Research Department both putting the going rate at 3%, compared to 2.5% in the three months to end December 2011. Figures from XpertHR (previously Industrial Relations Services) are unchanged at 2.5% but they also see clear signs of recovery in the pay market.

According to IDS, the most common settlement level (or ‘mode’) is now 3% but nearly a third of settlements have been at or above 4%. LRD figures also show 3% as the most common award but they have highlighted a number of significantly higher settlements including 5.5% in Rolls Royce, 6% in Ford and 6.1% in Jaguar Land Rover. And despite the fact that their latest quarterly figures are unchanged, XpertHR are also saying that the most common basic award is now 3%, with almost half of all increases pitched at that level or higher. In addition they are saying that almost half of all current awards are higher than those made in the same companies last year, with 35% at the same level and 24% lower.

Average total pay, according to ONS, is now £465 a week (£24,180 a year) and average regular pay is £439 a week (£22,828 a year). Average full time pay, according to LRD, is £612.20 a week (£31,834.40 a year).

In the public sector, however, there are still widespread pay freezes, and 1.6 million local authority workers in England, Wales and Northern Ireland have recently been told that their pay will not rise by 1% in the next round, as had been indicated, but will instead be frozen for a third year in succession. And this despite the fact that, when inflation is taken into account, real pay for local authority workers has declined by 13% between April 2009 and February 2012 (according to UNISON) and more than a quarter of the mainly female workforce now earn less than the living wage of £7.20 an hour, with many having to rely on tax credits to survive.

With private sector pay now beginning to rise again, the gap between what is being paid in the sectors is widening further. It is hard to see public sector workers accepting this for much longer and a more assertive approach to pay seems inevitable from the six million people who work in that sector.

But private sector workers also need to be more assertive as they cannot afford to assume that things will continue to improve for them. The higher January figures were heavily influenced by settlements in the better-paying manufacturing sector and there is no guarantee that these will be replicated or improved upon in coming months.

The time has now come for all workers, whatever sector they are in, to make clear that they will not accept further austerity on pay and will instead fight for increases which will maintain their living standards and help them to make up the ground they have lost over the past number of years. Remember, there has been no austerity for captains of industry while you have been tightening your belts, most big companies are comfortably cash rich and if you have more to spend you will be helping economic growth and putting people back to work.

With the most important pay review date of the year coming up in April, it’s now time to start fighting to win; it’s time to make a breakthrough on pay. Let’s do it!

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Sharp fall in January inflation

The latest Office for National Statistics figures show inflation falling sharply in January, as the effects of last year’s VAT increase fell out of the calculations. However, prices are still rising faster than wage increases and faster than in the large majority of competitor economies.

The figures for the year to end January 2012 (and end December 2011) are as follows:

Retail Prices Index (RPI)                                –                       3.9% (4.8%)

RPI excluding mortgage interest (RPIX)        –                       4.0% (5.0%)

Consumer Prices Index (CPI)                                    –                       3.6% (4.2%)

Much of the fall was due to technical reasons, mainly because current prices are now being compared with prices after the VAT increase from 17.5% to 20% last year, rather than prices prior to that increase. The increase in VAT is estimated to have added around 0.76% to inflation figures during 2011 and a fall in the figures was therefore expected when it was no longer a factor in the calculations.

However, there were also other downward pressures on inflation in January with the CPI, for example, affected by lower prices for clothing and footwear, furniture and household goods, due to the new year sales.

But there were upward pressures as well. In the case of the CPI, these included annual increases in the prices of alcoholic beverages and tobacco (6%), electricity (13.2%), gas (18.7%), tools and equipment for houses and gardens (16.8%), air transport (9.6%), jewellery, clocks and watches (8.4%) and transport insurance (15.5%). Upward pressures on the RPI came from increases in the price of biscuits and cakes (10%), beef (11.6%), lamb (16.2%), pork (11.7%), coffee and other hot drinks (15.2%), tobacco (8.8%), electricity (13.2%), gas (19.1%), vehicle tax and insurance (14.2%) and CDs (6.5%).

UK inflation is now no longer the highest in the EU but our 3.6% CPI is still higher than the CPI rate in the Euro Area (2.6%), in the EU as a whole (2.9%) and in 22 of the 27 member countries. These lower-inflation countries include Ireland (1.3%), Spain (2%), Greece (2.1%), Germany (2.3%), France (2.6%) and Italy (3.4%). It also compares badly to CPI rates in Japan (0.1%), Switzerland (-0.9%) and the US (2.9%).

Almost all economists are predicting that inflation will be lower in 2012 than in 2011, but there are mixed views on whether there will be sustained reductions during the year or whether prices will remain stubbornly high. The Bank of England is predicting significant falls by the end of the year, but they have made similar predictions over recent years and they have been consistently wrong. In addition, recent figures showing diesel prices at a record high of 143.7p a litre and petrol prices at a record high of 137.4 p a litre, suggest that there is more bad news to come.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.