Upload
mandate
View
224
Download
1
Tags:
Embed Size (px)
DESCRIPTION
The assault on retail worker's pay and terms and conditions
Citation preview
MILKING THE RECESSIONA Report by the Mandate Trade Union on The Assault on Retail Workers’ Pay and Terms and Conditions
MILKING THE RECESSION
A Report by the Mandate Trade Union on the Assault on
Retail Workers’ Pay and Terms and Conditions
CONTENTS
Introduction by John Douglas General Secretary, Mandate Trade Union 5
Milking The Recession: Executive Summary 8
Milking The Recession 13
3MANDATE TRADE UNION
5MANDATE TRADE UNION
Introduction by John Douglas General Secretary, Mandate Trade Union
This report is an important addition to the debate surrounding the
economic crisis facing Ireland. The report also is a natural follow-on
from Mandate’s earlier report entitled ‘End Low Pay’ which clearly
showed that lower-paid workers and their families fared badly in terms
of income and wealth distribution during the so-called boom years. It is
those most disadvantaged and marginalised groups in our society who
gained least during the economic boom who are now being targeted
disproportionately to carry the burden of poverty, job losses, house
repossessions and inequality as a result of government and employer
policies put in place to address the current economic crisis.
The economic model which has now crashed, causing devastation to
countless workers and their families, was fuelled by greed and the
self interest of powerful groups in society, supported by the political
policies of a government drunk on the illusion of economic success
based on an unsustainable, unregulated financial system which was
devoid of values.
From the ashes of the financial and economic ruin they have caused
we must ensure that a different economic order is created; one based
on values of fairness and social solidarity. The cheer leaders of the old
order must not be allowed to regain control. We have already seen them
attempt to demonise private and public sector workers, attack pay and
6 INTRODUCTION
conditions and target welfare payments while at the same time they
support the spending of billions of workers’ tax revenue in bailing out
banks and property developers.
Mandate Trade Union will not stand by and allow government or
profitable employers to target workers and their families to carry the
burden in sorting out the economic mess. We make no apologies for
resisting profitable employers milking the recession by cutting wages
and conditions, by reducing hours and by attempting to force through
phoney redundancies so as to increase their profits.
But as a responsible trade union Mandate has and will engage with
employers who are suffering genuine economic difficulties. We will
enter into long-term agreements with employers which protect jobs,
provide a decent income and value workers as genuine stakeholders in
the enterprise with a shared future.
These cases are special cases and should not be used as a battering
ram to beat down the conditions of other workers either in the private
or public sector. Those who attempt to do so are the very pundits who
were the cheer leaders for the rip-off merchants who milked the boom
and who now want to milk the recession.
9MANDATE TRADE UNION8 MILKING THE RECESSION: EXECUTIVE SUMMARY
Milking The Recession: Executive Summary
Introduction:
Over recent months Mandate has witnessed an aggressive and
determined attempt by many companies in the retail sector to drive
down pay and undermine the terms and conditions of low-paid
workers. This strategy is always framed against the current economic
climate, with highly profitable companies, enjoying healthy trading
conditions, seeking to achieve significant payroll reductions under
the guise of ‘economic necessity’. Companies are using the recession
to try and force through a long-held ambition to destroy long-fought
for employment standards, reduce the wages of employees and
ultimately increase already healthy profits. In short, they are milking
the recession.
Low Pay in the Retail Sector:
Pay in the retail sector, especially for those outside the managerial
level, is low. Shop floor workers earn a salary substantially below the
average industrial wage.
For many years new entrants will survive on a wage barely above the
national minimum wage level. Previous research commissioned by
Mandate revealed an average starting wage of just €9.09 per hour in
the retail sector. After ten years of service this rate, on average, rises
to just €13.57 per hour. These low pay rates were confirmed in a 2008
report by FGS Consulting for Forfás.
The Retail Sector In Ireland:
The retail sector in Ireland has enjoyed phenomenal growth and record
profits over the past decade. Many retailers in Ireland have considerable
retained profits, built up during the years of economic boom. While
retail profits soared, wage increases in the sector remained moderate
throughout the past decade. Value of sales growth and profits always
outstripped wage growth.
The economic downturn has had an impact on the retail sector.
However, the impact has not been uniform and many companies still
enjoy good trading conditions and healthy profits. Headline figures
for the decline in the retail trade are often misleading as they include
figures for the motor trade, electrical items and the bar trade which
have been particularly hard hit over the past 18 months. For instance,
CSO final figures for the year to August 2009 show:
• Volume of sales in the motor trade sector dropped by 24.5%
• Volume of sales in the electrical goods sector dropped by 11.1%
• Volume of sales in the bar trade dropped by 8.8%
• Volume of sales in department stores dropped by 5.6%
• Volume of sales in food and beverage businesses dropped by 5.9%
• Volume of sales in the pharmaceuticals and cosmetic sector dropped
by just 2.1%
• Volume of sales in non-specialised stores (including supermarkets)
dropped by just 3.4%
10 11MILKING THE RECESSION: EXECUTIVE SUMMARY MANDATE TRADE UNION
Over the past 18 months Mandate has worked closely with retailers
genuinely experiencing difficult trading conditions to ensure that a
viable future for the business is in place. This has involved sacrifices by
retail workers in an effort to maintain employment.
While Mandate will constructively engage with companies in this
position we will not stand by while other companies, trading profitably,
attempt to force major concessions from the workforce using the
backdrop of the general economic downturn.
Milking the Recession:
Recently Mandate has identified a strategy deployed by major retail
operations to undermine wages at a time when many workers have
genuine fears about job and income security. Many companies are
attempting to:
• Significantly reduce allowances paid for Sunday working, Christmas
working, payment for late night or early morning shifts.
• Offer redundancy packages to workers with long service and replace
them with new entrant workers on a much reduced hourly rate.
• Slash wage packets by employing workers for the bare minimum
contractual hours, often spread over five workings days. This
insidious tactic has severe implications for the work and family life of
our members and grants enormous power to management.
• Use the prospect of minimal pay increases as a battering ram to
undermine hard-fought for employment standards.
Mandate’s Response:
• Mandate will continue to stand by workers who are confronted with
unfair and unjustifiable attempts to undermine wages and hard-won
terms and conditions.
• Mandate will continue to recruit and advocate the benefits of trade
union membership, particularly for those in the low-paid sector of
the economy.
• On a broader level Mandate sees this campaign as part of the a wider
campaign for social justice, fair play and common sense in the face of
the economic downturn.
13MANDATE TRADE UNION
MILKING THE RECESSION
A Report by the Mandate Trade Union on the Assault on
Retail Workers’ Pay and Terms and Conditions
Background:
People working in the wholesale and retail sector in Ireland are among
the lowest-paid workers in the country. Previous research published
by Mandate in 2008 reveals that, on average, a sales assistant earns a
starting salary of just €9.09 per hour, a rate barely above the national
minimum wage of €8.65. After 10 years of service the same sales
assistant can expect to earn €13.57 per hour or €22,721 per year. In
comparison the average industrial wage in Ireland is estimated at
€34,000 per year.
These low wage levels persisted during a time when the retail sector
in Ireland witnessed phenomenal growth in both sales and profits.
CSO data on the retail sector (excluding the motor trade) confirms this
reality. The value of retail sales in Ireland grew by 43% between 2001 –
2007. The volume of retail sales increased by 31.7% in the same period.
During this period most retailers operating in Ireland earned massive
profits, management enjoyed significant bonuses and retained profits
grew and grew. However, the workers who were crucial to generating
this wealth were told to display wage restraint. Retained profit levels
had to be built up during the good times to ensure the sustainability
of the business and the protection of wages and conditions in the
15MANDATE TRADE UNION14 MILKING THE RECESSION
inevitable downturn. Wage growth always lagged significantly behind
profit and volume growth in the sector.
As we all know the inevitable downturn has arrived. Like every
economic sector in Ireland the retail sector has contracted, although
not by the amount that many business lobby groups would have us
believe. After a decade of unprecedented and sustained growth the
retail sector is retrenching, and in an increasing number of cases the
first people to pay the price are the low-paid workers in the sector.
Over recent months Mandate has witnessed profitable firms with
healthy businesses using the background of the wider economic
downturn to attempt to force workers to take significant cuts in pay
and conditions. In specific instances management have preyed on the
fears that many workers have about job and income security in the
current climate to drive through an agenda that will result in increased
casualisation, lower pay scales and significantly reduced conditions
of employment.
These companies are basically using the economic downturn to
demand long-term concessions from workers at a time when most
low-income families face the immediate future with uncertainty and
worry. Our current economic crisis is being used as a smokescreen to
facilitate a long-held ambition by some in the retail sector to create a
casual workforce, emasculated by appalling contracts of employment
and without professional representation by a trade union.
This is nothing more than blatant exploitation and crude opportunism.
Mandate is calling a halt!
Changing Retail Environment in Ireland:
The retail sector in Ireland is emerging from its most sustained and
profitable decade of trading. The general contraction in the economy
is having an impact on the retail sector, along with a number of other
factors such as rental costs, cross-border shopping etc. However any
shrinkage in the market must be viewed against the phenomenal
double digit growth which was a feature of the past decade.
Mandate is absolutely committed to the protection of jobs in the
retail sector. Over the past 18 months we have worked in partnership
with a number of prominent retail businesses in Ireland that were
encountering serious trading difficulties. In these instances the
businesses have clearly demonstrated the challenges they were facing
and worked with their employees and Mandate to achieve solutions
that work.
The message is clear: where a company is genuinely struggling in the
current market conditions Mandate and its members will not be found
wanting and will play a constructive role in restructuring.
However, there are an increasing number of companies who, despite
remaining profitable and enjoying good trading figures, are attempting
to force workers to take unnecessary and unfair reductions in pay,
allowances and terms and conditions. These pay rates and terms and
conditions of employment have been long fought for and form an
essential part of the family budget of thousands of workers. Employer
demands for cutbacks are always conveniently framed against the
background of the current economic crisis.
MANDATE TRADE UNION 1716 MILKING THE RECESSION
While most of the retail sector is undergoing contraction the headline
figures, and the data quoted by many business lobbyists, can often be
misleading. A closer examination of the figures reveals huge disparity
in trading conditions within the sector.
For example, the latest Retail Sales Index issued by the CSO covers
the period from October 2008 to October 2009. The headline figure
shows that the volume of retails sales dropped by 9.1% in that period.
However, a breakdown by business type reveals a much different
picture, for example:
• Volume of sales in the motor trade sector dropped by 24.5%
• Volume of sales in the electrical goods sector dropped by 11.1%
• Volume of sales in the bar trade dropped by 8.8%
• Volume of sales in department stores dropped by 5.6%
• Volume of sales in food and beverage businesses dropped by 5.9%
• Volume of sales in the pharmaceuticals and cosmetic sector dropped
by just 2.1%
• Volume of sales in non-specialised stores (including supermarkets)
dropped by just 3.4%
In short the collapse in car sales and the significant fall-off in the
licensed trade and the electrical goods market hide the relative ‘soft-
landing’ that has occurred that has occurred in many retail sectors.
If the motor trade and the licensed trade are excluded the fall in the
volume of retail sales across all other sectors from October 2008 to
October 2009 was 6.7%, a worrying trend but by no means a crisis that
warrants the assault on low-wage workers.
Interestingly, preliminary CSO figures up to November 2009 indicate
that the contraction in the volume of retail sales may have bottomed out
with monthly sales (excluding the motor trade) showing positive growth
in five of the last seven months.
If we look specifically at the volume of sales in department stores, food
businesses, non-specialised stores (including supermarkets) and the
pharmaceutical and cosmetic sectors, areas of the retail sector where
the majority of Mandate members are employed, the average fall in the
volume of retail sales from October 2008 to October 2009 was 4.25%.
Pay and Costs in the Retail Sector:
As noted at the beginning of this report pay in the retail sector,
especially for those outside managerial levels, is low. The sales
assistants, shop floor workers and counter staff that everyone knows
earn an annual salary far below the average industrial wage. For many
years new entrants will survive on a wage barely above the national
minimum wage.
A 2008 report by FGS Consulting for Forfás estimated that the average
annual wage of a sales assistant in Dublin was €22,000. The same
person working in Cork, Galway or Limerick earned just €17,500.
Despite the claims of some industry lobbyists pay rates in Ireland
are not significantly higher than in the UK or other comparative
European cities.
MANDATE TRADE UNION 1918 MILKING THE RECESSION
For instance, according to the FGS Consulting report, a sales assistant
in Cork, Limerick or Galway earns just €2,500 more per annum than
a sales assistant in Belfast. A sales assistant in Maastricht in the
Netherlands will earn €7,500 more per annum than their counterpart
in Cork, Limerick or Galway.
A sales assistant in Dublin earns just €1,000 more than their equivalent
in London, and they lag €3,000 behind the wage of their counterpart
in Maastricht.
When examining relative rates of pay between different cities or
jurisdictions it is also important to bear in mind the cost of living in each
city. According to the Economist Intelligence Unit’s Worldwide Cost
of Living survey published in February 2009 rated Dublin as the 13th
most expensive city in the world to live in. By comparison London was
ranked 27th.
Payroll costs form a relatively high proportion of operating costs in
the retail sector not because wages are high but because it is a labour
intensive business. The minimum wage rate is an important protection
for low-paid retail workers in Ireland. A lower minimum wage rate (such
as exists in the UK) only facilitates employers in driving down the pay
rates of low-paid workers. That is the main reason for the relatively
small difference in pay rates for low-paid workers here as compared in
the UK. It’s not that Irish workers are paid well, it’s that workers in the
UK are paid worse.
Increasingly, Mandate has identified a trend whereby certain employers
are aggressively setting the minimum wage rate as a benchmark target
to be achieved. Increasingly workers in the retail sector who have given
loyal service over a number of years and are on a higher pay scale are
being offered voluntary statutory redundancy packages. If the worker
chooses to depart they are replaced by new entrants at the lowest end
of the pay scale and the company pockets the difference between the
two wage rates.
Pressure is also being brought to bear on employees with long service
whereby their hours are reduced to the bare contractual minimum
number of hours, spread over five days of the week. This insidious
tactic deprives workers of accessing the social welfare system to
subvent their low pay, increases the pressure on balancing home
and work life and effectively acts as a push factor for long-term
employees on the upper end of the pay scales to avail of so-called
redundancy packages.
The FGS Consulting report identified a range of areas, outside of payroll,
where costs in Ireland are significantly ahead of the UK or our European
neighbours. These include rental costs, utilities, telecommunications,
professional fees and local authority charges.
However, when faced with a decline in the volume of retail sales
many companies have focused solely on low-paid workers to deliver
cost savings, savings these workers cannot afford to make. In these
instances, the other major cost factors that are a significant drag on
the retail sector have not been given the same priority. It is low-paid
workers who are expected to pay the price.
MANDATE TRADE UNION 2120 MILKING THE RECESSION
In the past year retail workers have been faced not just with a demand
for pay rate reductions. They are in many instances also faced with a
demand for a radical change in terms and conditions. Some companies
are determined to issue new contracts of employment, contracts that
would drastically reduce the minimum number of hours an employee
can depend on each week. These short-hour contracts put the
employee in an invidious position. The contracted hours will not deliver
a living wage and the employee is dependent on securing additional
hours to maintain their earnings. This gives enormous power to the
management, increases casualisation and results in a degrading of the
basic conditions of employees.
Mandate has also witnessed examples of staff on existing contracts
confronted with a drastic cutback in hours. For instance, many retail
workers have contracts of employment for perhaps 20 hours a week.
In reality they have worked 28-32 hours for a long period of time, and
this effectively becomes that person’s established working week.
In recent months we have seen retail management severely paring
back workers’ hours to the bare contractual minimum. This results
in massive reductions in take-home pay, while outgoings such as
childcare etc. remain high. Workers also become increasingly dependent
on management for additional hours to achieve a decent weekly wage,
and hence are less inclined to challenge management when serious
workplace issues arise. The paring back to minimum contract hours also
results in every worker having to do more for less pay as retail stores
continue to operate at full tilt with minimum staffing levels.
Recent Examples of Blatant Opportunism:
A) Pharmacy and Cosmetic Sector:
As noted earlier the pharmaceutical and cosmetic sector recorded the
smallest contraction in volume of retail sales in the year to 2009. The
sector contracted by just 2.1%.
However, that hasn’t stopped one major international retailer in
the sector attempting to force significant cuts in pay and terms and
conditions on its employees in Ireland. Just to place these outrageous
demands in context the company posted a profit of approximately
€20m for its Irish operations in the year to March 2008.
Despite its healthy trading record in Ireland the company is
aggressively seeking to drive down costs by reducing the pay and
conditions of its staff.
Some of the key changes the retailer is trying to force through include:
• A 15.5% cut at the top of the pay scale, reducing it from €14.20 to
€12 per hour.
• A 25% reduction in public holiday pay.
• A 25% reduction in the allowance for Sunday working.
• Increased power for management over weekend working rosters.
The company is intent on destroying 10 years of constructive
partnership with its employees and Mandate with its aggressive
22 MILKING THE RECESSION
approach to achieving these drastic cuts. The company has withdrawn
from the State’s established labour dispute resolution machinery
and is seeking to impose these cuts unilaterally. The nature of the
cutbacks proposed and the aggressive management attitude in
relation to this issue have left staff with no opportunity but to ballot
for industrial action.
B) Grocery and Drapery Sector:
A number of companies with a very prominent position in the grocery
and drapery sector in Ireland are currently attempting to impose
significant cutbacks.
In a number of cases some companies are using the prospect of
payment of National Agreement increases to gain major, long-term
concessions on terms and conditions from employees. In all these cases
the terms and conditions, such as allowances for working on Sundays
or at Christmas, allowed the companies involved greater flexibility and
longer opening hours as the retail sector adapted and benefitted from
changing social patterns.
In short the terms of the National Pay Agreement are being used in
these instances as a battering ram to introduce significantly reduced
take-home pay and terms and conditions for employees. It is an abuse
of the principles of National Agreements and most certainly challenges
the notion of the social partnership model.
The modest pay increases proposed in the National Agreement are
not a bargaining chip to be used by employers to wring concessions
out of workers. They are increases agreed between the social partners
MANDATE TRADE UNION 23
and Mandate will continue to work to see this Agreement honoured by
hugely profitable companies enjoying good trading conditions in the
retail section.
Example 1: Major Grocery and Drapery Retailer
One of Ireland’s leading grocery and drapery stores, which employs
approximately 11,000 people in Ireland, has sought major concessions
from its workforce. This international business has recently posted
record profits in excess of £3 billion sterling, and its Irish operations
contribute significantly to this huge profit.
The company has dangled the prospect of the payment of monies owed
under the National Pay Agreement, but only if major concessions are
forthcoming. Among the concessions that management have been
aggressively pursuing are:
• Suspension of allowances for late night, early morning and
overtime work.
• Significant undermining of terms and conditions of workers
protected by a transfer of undertakings agreement when the
company entered the Irish market.
Example 2: Major Grocery and Drapery Retailer
This Irish-based company, with international operations,
employs approximately 17,000 people throughout Ireland and parts
of Europe. For the past number of years it has adopted an extremely
aggressive and dismissive attitude towards its workers and their
trade union, Mandate.
24 MILKING THE RECESSION
A Labour Court recommendation from May this year noted that the
company failed to appear before the Court and urged it to honour
both the spirit and intent of a collective agreement the company and
Mandate had signed over a decade ago.
At present the company operates in a unilateral and high-hand fashion
in terms of industrial relations, continually seeking concessions across
a range of issues from staff.
Recently, it has introduced a highly questionable statutory redundancy
scheme. The scheme offers employees only statutory redundancy
terms. The company can then claim 60% of the cost of these payments
back in a rebate from State funds.
The redundancy scheme enables the company to replace workers on
a higher pay scale with workers on a much lower pay scale. The
company shoulders little of the cost of redundancy and pockets the
difference in pay rates between workers.
Example 3: Major Drapery Retailer
This company has a major presence in the high street retail clothing
sector and has enjoyed over a decade of continuous profitable trading
in Ireland.
It has ignored the terms of the National Pay Agreement, despite
never attempting to put forward an ‘inability to pay’ position. Instead
it is proposing a minimal pay increase, below that of the National
Agreement in return for significant concessions. The minimal increase
would not be backdated to May, when the National Agreement increase
was due to workers.
If the company is successful the vast majority of workers would be
worse off under the new regime.
Among the concessions sought are:
• Reduction in allowances for Sunday working
• Reduction in allowances for work over the Christmas period
Conclusion:
Mandate is deeply concerned at the aggressive attitude and approach
adopted by some employers in the retail sector during recent months.
These employers enjoyed phenomenal growth, positive trading
conditions and huge profits during the past decade. On the other hand
the workers who helped create these profits demonstrated wage
restraint throughout the period.
Now, at the first sign of a contraction in business, it seems that some
employers believe that low-paid workers can be targeted to shore-up
the huge profits made in previous years. Mandate believes it is doubly
unfair that low-paid workers who benefited least during the so-called
boom years are first in line for pay cuts and reductions in terms and
conditions at the first sign of a change in trading conditions.
Mandate has engaged positively with employers experiencing genuine
trading difficulties in recent months. Workers have demonstrated
MANDATE TRADE UNION 25
26 MILKING THE RECESSION
tremendous understanding and generosity in situations where the
recession has had a demonstrable severe effect on the sustainability
of a business. Our members have not been found wanting when tough
measures have to be taken to ensure employment and the viability
of a business. Mandate will continue to respond to genuine cases in a
constructive spirit.
However, we will not tolerate other employers, be it in the private
or public sector, who try to use these cases as a precedent for the
wholesale assault on hard-won employment standards that benefit the
lowest paid and often most vulnerable families in the country.
Mandate will:
• Continue to stand by workers who are confronted with an attempt
by employers to use the general economic downturn to unjustifiably
undermine wages and terms and conditions.
• Advocate the positive benefits of trade union membership, especially
for low-paid workers in the economy. Our union will continue its
active recruitment campaign to ensure that workers confronted
with aggressive cost-cutting strategies are not isolated and
vulnerable. We will provide the professional representation and the
support and solidarity that flows from membership of a trade union.
• Use all avenues available to use to highlight the activities of some
employers in the retail sector.
27MANDATE TRADE UNION
On a wider level Mandate sees this campaign as part of the broader
campaign for social justice and common sense in the face of the
economic downturn. Mandate fully supports the Irish Congress of Trade
Unions’ ‘Get Up, Stand Up’ campaign.
Now, more than ever, values have to play a central role in public policy.
Values of social solidarity, values of fairness, values of equality are
essential as we, as a country, chart our way out of the current crisis.
Some are proposing that we destroy the fabric of society, in an
ideological- driven approach to ‘save’ the economy. It makes no sense. It
actually plays into the agenda of the bankers and property speculators
that brought us to this point.
Low-paid workers who benefitted little from the so-called boom years
cannot now be expected to bear the brunt of cutbacks. We cannot
accept that basic welfare payments, and many Mandate members
depend on schemes such as Family Income Supplement and the Back To
School Allowance payment, will be cut while a wealthy tier in society
escape both scrutiny and sanction.
Fairness is essential. We need to see fairness in the retail sector.
We also need to see fairness across society as we face unprecedented
challenges. Mandate’s campaign against unscrupulous attempts to
drive down wages and terms and conditions in the retail sector is
part of a broader campaign to see fairness in public policy at this
crucial time.
Where to find usMandate Head Office O’Lehane House 9 Cavendish Row Dublin 1
Tel: 01 874 6321 Fax: 01 872 9581 Email: [email protected]
Mandate Organising and Training Centre Distillery House Distillery Road Dublin 3
Tel: 01 836 9699 Fax: 01 884 4114 Email: [email protected]