By Ian Clark, Professor in Human Resource Management, Nottingham Trent University
Our research suggests that the many small-unit garment businesses and numerous roadside hand car washes may have contributed to the spike in cases. Cramped high-density living conditions, inappropriate social distancing and continued business operation during the lockdown may also have played a part. It should also be noted that Leicester has a high BAME population who may be particularly at risk.
At the heart of this problem are employers that use informal business and employment practices. They often operate beyond government regulatory institutions, imposing norms and values that erode accepted business and labour practices. They operate in plain sight, but often fail to comply with employment law, workplace health and safety rules, and environmental regulations.
Workers, in turn, tolerate such business models out of necessity, despite the insecurity, irregular working hours, low wages and lack of holiday pay. Unfortunately, it may be that they are now having to tolerate an increased risk of contracting COVID-19.
The need to work undermines control measures
Employers who use predominantly informalised business and employment practices –that is, those who don’t pay the right taxes, underpay employees, fail to pay holiday and sick pay, and generally ignore all relevant laws and regulations related to employment – annually generate 12% of Britain’s GDP. They are not uncommon, and include both permissible businesses that are being run illegally as well as wholly criminal industries, such as making or selling counterfeiting goods, and drug dealing. Such businesses sustain 2.5 million workers, a number equal to 9% of the formal private-sector working population, and generate £223 billion per year.
There are some of these workers in Leicester. Some work in the city’s textile sector, producing, cutting, trimming and packing garments. There are also people in the city – as across the East Midlands and the wider UK – who wash cars, manicure nails, deliver takeaway food or do day-rate work in food processing.
It’s difficult to say with certainty how large the city’s informal sector is, but our research tells us that virtually all hand car washes operate informally, failing to observe relevant employment legislation. In Leicester’s textile sector, research by others suggests that there’s subcontracting of work that’s often informal. It’s likely that the size of Leicester’s informal economy matches the average figures cited above, at around 12% of the local economy.
Workers in the informal sector often accept jobs to escape poverty and have little choice in the employment they can take. Many are newly arrived migrants. Others have never entered the formal labour force, despite extensive employment experience.
Most of these informal jobs were classified as nonessential and closed during the pandemic. But it’s clear that in some sectors they remained open or reopened without appropriate COVID-19 measures in the workplace. The recent Labour Behind the Label report suggests some Leicester employers asked workers to continue working without altering employment conditions to cope with the pandemic, and in some cases while workers exhibited symptoms of ill health.
Citing the same report, the Guardian reports that Public Health England found that young male workers in the garment and food processing sector between the ages of 20 and 40 were major transmitters of the virus in Leicester. This is a core demographic of hand car wash workers, too.
Informal business owners also move workers around the country to meet current needs, a practice that – during the pandemic – would have placed workers at additional risk of infection. Yet despite these obvious issues, there has been a willingness to work among the informal workforce. We believe there are several that explain why.
First, some workers fail to qualify for any government schemes to support their roles, precisely because of the informal status of the employment they hold. The much-publicised furlough scheme is only open to formal employees.
Second, some informal workers, documented or undocumented, may have “no recourse to public funds” during periods of limited leave to remain in the UK. This status prevents them from claiming benefits. In our research, we’ve found workers in this category prepared to work at car washes for as little as £3 an hour, which gives a sense of the financial pressures some may be under.
Third, some employers classify workers as self-employed but provide no payslips or invoices, which also means they are unable to claim government support.
Finally, our findings also show that informal workers often don’t trust government agencies and that this can be a barrier to them seeking and securing support. Our research has highlighted that some workers are unaware of their rights and believe that regulators are primarily concerned with deporting workers rather than protecting their interests and prosecuting employers.
Living arrangements may play a role too
Many such workers live in intergenerational housing where it is difficult to maintain social distancing between those who continue to work and other family members who do not. Often recently arrived migrants also live in houses of multiple occupation, owned by their employers, where social distancing is also difficult to maintain. These are properties rented to three or more people, not from a single household, but who share facilities like the bathroom and kitchen. Without work, they may become heavily indebted, putting them at even greater risk of exploitation.
We also witnessed cramped on-site living conditions for workers at hand car wash sites across the UK during visits with regulators. In many of these places, social distancing and basic hygiene would be difficult – if not impossible – to establish.
Our research shows that we need to be mindful of the issues facing informal workers in Leicester – and throughout the UK – if the first local lockdown is not to be the sign of a wider trend.
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