The economy has always relied on the labour of people whose work is insecure.
But the pandemic left vulnerable workers in precarious and short-term employment at an even higher risk of exploitation, according to a new report seen exclusively by Sky News.
The research, compiled by charity Focus on Labour Exploitation (FLEX), found that reports of exploitative practices increased markedly in the year to July 2021, with low-paid and migrant workers reporting abuses such as wages being withheld, terms and conditions being changed, intimidation and sexual harassment.
It also maintains that the social security system often leaves the most vulnerable “unprotected” with few alternatives and little choice but to accept mistreatment from unscrupulous employers.
The fear is that as winter sets in and the cost of living spirals, people will feel increasingly unable to leave exploitative situations.
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The research was undertaken in collaboration with the Independent Workers Union of Great Britain (IWGB) and United Voices of the World (UVW), two trade unions supporting workers in low-paid and insecure sectors of the economy.
It found that 44% of members surveyed had their wages withheld at some point during the pandemic.
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Nearly a quarter were forced to accept worse terms or conditions and one in five were too scared to take time off sick for fear of losing work.
Ivan Andino is one of them. He is originally from Ecuador and works as a cleaner in an office block in west London.
Image: Office cleaner Ivan Andino claims he was exploited by his employer during the pandemic
He claims that when the pandemic hit and workers in other teams were made redundant, he was expected to pick up the workload of a whole extra person with no extra pay.
He claims that he was harassed when he took a break and wasn’t even allowed to leave the building when on shift.
“They started to intimidate us by watching over us, telling us not to sit down and wanting us to be visible the whole time,” he says.
“It was a bad, stressful time, not just for me but also for my colleagues. The way our supervisor treated us was really bad, they wouldn’t ask for things politely but instead they would just order us around.
“We tried to defend ourselves but since we couldn’t speak the language, we couldn’t do anything more.”
With the help of his union he has since launched a formal grievance against his employer.
The report also found that a significant proportion of workers like this were simply made redundant rather than being furloughed (33%), while one in 10 were simply not given any work.
There are a variety of reasons why workers may be susceptible to exploitative practices. Very low pay and insecure employment might be layered with other vulnerabilities such as language barriers or immigrant status which may restrict someone’s access to welfare. Taken together workers may feel they have no choice but to accept exploitative conditions.
The report also argues that social security safety nets are insufficient to protect the most vulnerable.
Statutory sick pay, for example, is one of the least generous in Europe at just £96.35 per week and it can only be claimed from the fourth day of illness.
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While the five-week wait for payment as a new Universal Credit claimant means the very poorest face destitution in the meantime.
There are calls to reform these systems, as well as to increase funding for labour standards enforcement.
“When the system allows poor behaviour, poor behaviour happens,” explains Meri Ahlberg, research manager at FLEX and the report’s author.
“It’s not necessarily that employers are bad but they’re under pressure, and if the rules and protections aren’t there and the enforcement isn’t there, then people will be taken advantage of.”
Image: Meri Ahlberg, the report’s author, and a research manager at Focus on Labour Exploitation
Although recent labour shortages might imply there is more choice and bargaining power for workers, the most vulnerable may often feel trapped.
“If you’re working and you know that if you lose your job, you’re not going to have a safety net to fall back on, you’re really loath to let go of that job,” says Ms Ahlberg. “That makes it really hard to assert your rights or complain about poor treatment.”
WH Ireland, the wealth management group, is in talks about an all-share merger with Team, another London-listed operator in the sector.
Sky News has learnt that the two companies are in advanced discussions about a deal that could value WH Ireland at more than 4p-per-share – roughly eight times the value of a rival transaction which was voted down by its shareholders last month.
Sources said the deal, if completed, would create a larger player in the UK wealth management market, although the companies are relative minnows with a combined market capitalisation of just £20m.
Both WH Ireland and Team declined to comment.
The value that the prospective deal places on WH Ireland’s stock may prompt questions from its shareholders about why a transaction worth a fraction of its value received a recommendation from its board and advisers.
Last month, Sky News revealed that the £1m sale of WH Ireland’s wealth management division to Oberon Investments was on the brink of collapse after a group of investors moved to block it.
WH Ireland’s wealth arm has about £830m of assets under management, while Team has total assets under management or administration of more than £1bn.
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The former’s biggest shareholders, according to its website, include TFG Asset Management, which owns 29.9%, the prominent City figure Hugh Osmond, who holds just under 10%, and Melvin Lawson, owner of a 9.7% stake.
The board of WH Ireland is chaired by Simon Moore, who also chairs LV Financial Services, the life insurance mutual.
NSK said it had begun consultations with union representatives on its plans.
Unite the Union said it would fight the planned closures. It described the announcement as a “betrayal” of the workforce.
The company first began operations at Peterlee in 1976. It has another UK manufacturing facility at Newark in Nottinghamshire and another three in Germany and Poland.
The Peterlee factories produce bearings for steering columns and wheel hubs.
Its customers are understood to include VW, Renault and fellow Japanese firm Nissan, which has sprawling car production facilities just up the coast at nearby Sunderland.
Its statement said NSK Europe had faced “persistent challenges in the profitability of locally manufactured products”.
“NSK will continue discussions with stakeholders and provide support measures for affected staff if the closure proceeds, which is expected to be completed no later than March 2027.
“The company has not yet determined the full impact of this decision on its business performance,” the statement concluded.
Challenges for UK manufacturers in recent times include Brexit red tape and high energy costs, though the Peterlee operation is understood to have been run on power generated purely from wind.
Unite blamed pressures on automotive parts suppliers from weak demand hitting car manufacturers during the transition away from internal combustion engines to electric vehicles.
Its general secretary Sharon Graham said: “This is a complete betrayal by NSK of its County Durham workforce, who have broken their backs hitting performance targets that they were told would keep their factories safe.
“There is a viable business case for keeping these sites open and Unite will fight tooth and nail for that to happen.”
Unite said it was urging the government to intervene with financial support to protect automotive jobs.
Thousands of job cuts at the NHS will go ahead after the £1bn needed to fund the redundancies was approved by the Treasury.
The government had already announced its intention to slash the headcount across both NHS England and the Department of Health by around 18,000 administrative staff and managers, including on local health boards.
The move is designed to remove “unnecessary bureaucracy” and raise £1bn a year by the end of the parliament to improve services for patients by freeing up more cash for operations.
NHS England, the Department of Health and Social Care, and the Treasury had been in talks over how to pay for the £1bn one-off bill for redundancies.
It is understood the Treasury has not granted additional funding for the departures over and above the NHS’s current cash settlement, but the NHS will be permitted to overspend its budget this year to pay for redundancies, recouping the costs further down the line.
‘Every penny will be spent wisely’
Chancellor Rachel Reeves is set to make further announcements regarding the health service in the budget on 26 November.
And addressing the NHS providers’ annual conference in Manchester today, Mr Streeting is expected to say the government will be “protecting investment in the NHS”.
He will add: “I want to reassure taxpayers that every penny they are being asked to pay will be spent wisely.
“Our investment to offer more services at evenings and weekends, arm staff with modern technology, and improving staff retention is working.
“At the same time, cuts to wasteful spending on things like recruitment agencies saw productivity grow by 2.4% in the most recent figures – we are getting better bang for our buck.”
Image: Health Secretary Wes Streeting during a visit to the NHS National Operations Centre in London earlier this year. Pic: PA
He is also expected on Wednesday to give NHS leaders the go-ahead for a 50% cut to headcounts in Integrated Care Boards, which plan health services for specific regions.
They have been tasked with transforming the NHS into a neighbourhood health service – as set down in the government’s long-term plans for the NHS.
Those include abolishing NHS England, which will be brought back into the health department within two years.