It has become popular to write off 2016 as one the worst years in recent history. In the world of work there has been both progress and setbacks. With ongoing issues such as the gender pay gap, workers’ rights, automation and Brexit we can expect even more turbulence in the workplace next year.
The gig-economy backlash
Once heralded as way of liberating workers to become their own bosses, or a means of supplementing income, the promise of the gig-economy turned into disappointment 2016.
As the popularity of on-demand services like taxi app Uber and food delivery app Deliveroo surged in the UK, many of their workers spoke out about the price they pay for the convenience these services bring; including lack of job stability, paid leave and other workers’ rights.
There have been numerous lawsuits and protests over the poor conditions in the gig-economy, in which 5 million people in the UK work. Uber, for example, classifies its drivers as self-employed, but there have been complaints from workers that the company exerts tight control over them, dictating working patterns and cutting the rates they can charge. In a recent report, Frank Field, a Labour MP and chair of the work and pensions committee, said Uber treats its drivers as Victorian-style “sweated labour”, with some taking home less than the minimum wage.
On these grounds, two Uber drivers, on behalf of a group of 19, took the company to an employment tribunal and won. In October, the court ruled that Uber’s 40,000 UK drivers were not self-employed and the company should pay them the national minimum wage and benefits like holiday pay.
The victory, which Uber is seeking to overturn, was billed as a landmark test case that would impact the gig economy as a whole. Delivery firm CitySprint and car service Addison Lee are embroiled in similar legal disputes over the treatment of freelance workers, while courier service Hermes is being investigated by HMRC. Companies profiting from the casualisation of work, or bogus self-employment as it has been dubbed, will continue to be under intense scrutiny in 2017.
“What is interesting about the Uber case is that it shines a light on how people are ‘employed’, particularly casual workers,” says Kiran Daurka, partner at employment the law firm Leigh Day, which represented the two Uber drivers. “There is a real question about what work looks like now; what are workers’ rights and how have some seemed to have fallen into these huge cracks, and don’t seem to have any protection?”
Workplace discrimination
A series of damning reports this year showed that workplace discrimination is a persistent problem in the UK. And, in many cases, is getting worse.
In March, a report commissioned by the Equality and Human Rights Commission (EHRC) and Department for Business, Innovation and Skills revealed that more than three-quarters of pregnant women and new mothers, the equivalent of 390,000 women, experience negative and potentially discriminatory treatment at work each year. One in nine lose their job as a result. This discrimination is bad for business too. The costs of hiring and training new staff, redundancy payouts and lost productivity after women are pushed out of jobs costs £280m a year, according to the EHRC.
This is one of the reasons why so little progress has been made on closing the gender pay gap – which at 19.2%, has not changed in four years. A cross-party committee of MPs chaired by Maria Miller, reported in March that this gap is perpetuated by the part-time pay penalty, women’s disproportionate responsibility for childcare and the concentration of women in low paid sectors like care, retail and cleaning. Next year, private and voluntary sector employers with over 250 employees will have to collect data on the gender pay gap at their organisations and report it the following year.
Daurka is not convinced these draft regulations go far enough. “The ongoing concern for me is that majority of businesses don’t have 250 employees – it would have been good to see a lower threshold,” she says.
Race discrimination is also persistent problem in UK workplace, with a major report from the EHRC showing that black, Asian and minority ethnic workers faced higher unemployment rates, lower pay and were underrepresented in senior roles.
Tribunal fees continue to be a major roadblock to creating more equal workplaces. Since the fees, which require workers to find up to £1,200 before they can pursue a case, were introduced in 2013, the number of of unfair dismissal claims has fallen by 73%, the Trades Union Congress reported in November. The union revealed that discrimination cases on the grounds of sex have dropped by 71%, race by 58% and disability by 54%. The government was due to publish a review on the impact of fees at the end of last year, but is yet to do so. “There is no point in having laws when people can’t enforce their rights,” says Daurka. “Employers, in my view, are likely to take these laws less seriously if they think people aren’t going to utilise their rights to bring a complaint,” she says.
A living wage?
From revelations about Sports Direct paying under the minimum wage, to the focus on the “just about managing” in the chancellor’s recent budget, low wage Britain has been a major story this year. Since the start of the financial crisis, Britain has seen a 10.4% decline in real wages, which is a bigger fall than any other advanced country, apart from Greece, according to a TUC study.
In April, the “national living wage” came into effect, meaning workers aged 25 and above received a minimum wage of £7.20 an hour – 50p more than the minimum wage. In April 2017, this will go up to £7.50 an hour. While this led to an immediate pay rise for 1.8 million workers, many businesses expressed their concerns saying it would lead to job cuts. Businesses, including Le Pain Quotidian and Zizzi reportedly cut staff perks, like paid breaks, when the national living wage was introduced.
Campaigners argued that given its name, the national living wage should be calculated on the rising cost of living, taking into account wage stagnation. A report from the Living Wage Commission found that six months after its introduction, the national living wage was failing to provide the basic needs of low-paid households.
“The government’s national living wage is really welcome but it isn’t a real living wage because it is not based on what it costs to live,” says Katherine Chapman, director of the Living Wage Foundation, a charity that has been campaigning for employers to pay a living wage for the past 15 years.
The foundation calculates the living wage to be £9.75 an hour for London and £8.45 an hour outside of London. Despite any confusion that may stem from the similar name the former chancellor George Osborne chose for the national living wage, the Living Wage Foundation has doubled the number of employers paying the voluntary living wage since George Osborne first announced the national living wage in April 2015, says Chapman. The foundation has 3,000 employers signed up to pay the voluntary living wage, including Ikea, Majestic Wine, Lloyds TSB and National Grid.
“What is quite interesting about the government’s introduction of the national living wage is it has got businesses to look again at their business models and think how can we move towards a higher pay, higher skills, higher productivity business model,” she says.
But with Brexit looming, rising costs of doing business may affect employers’ ability to pay the living wage. “It’s been a good year for awareness but there is still a lot of work to do,” says Chapman. “What’s more important than ever, is to make sure their employees are protected in these uncertain times, particularly as we know that inflation will go up,” she says.
The onward march of automation
There have been countless stories this year about robots stealing our jobs. It has been predicted that by 2050, 40% of jobs will be automated and no industry would be unaffected. While this projection is decades away, there have been many developments in artificial intelligence this year. Robots are being designed to be bank clerks, to host job interviews, to be therapists – which show how this technology is already having an impact on the way we work.
An example of a profession that has really embraced artificial intelligence this year, and could benefit most profoundly from it due to its life or death outcomes, is surgery. Robots, such as da Vinci, have entered the operating theatre, carrying out operations with groundbreaking precision. This year, the first kidney transplants performed by robots in the UK were so accurate, the patients only had to be treated with paracetamol as a painkiller after.
Other developments have not been so welcome. Much progress has been made in self-driving car technology, but there are concerns about their safety. In the Volkswagen factory in Germany, a worker was crushed to death by a robot. And there is concern about what the onward march towards automation means for jobs security and wages – as the Southern Rail dispute highlights.
“Technology is becoming more labour-saving and less job-creating. It is not creating as nearly as many jobs as it did in the past,” says Carl Frey, an economist at Oxford University. The move towards automation has been dubbed the fourth industrial revolution. But this term is misleading, he says. “Automation these days has more to do with services – it will transform services in the same way that the industrial revolution transformed manufacturing,” he says.
The Brexit vote
The most momentous event to happen this year in the world of work was the referendum vote to leave the EU. Yet in the absence of a credible plan outlining when and how Brexit will happen, it is impossible to predict the full scale of its impact.
Since the vote, there have been concerns that businesses might leave the UK and dampen their recruitment plans. Meanwhile EU workers living in the UK are still in the dark about whether they will be able to stay. While UK unemployment hit an 11 year low in September, the Bank of England has forecasted that it is set to rise amid uncertainty over Brexit. Brexit will also have many repercussions for employment law in the UK, with much of it influenced by EU law.
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