Groundbreaking report into construction direct employment must be acted upon, urges Unite
- Friday 12 February 2021
Unite, the construction union, has welcomed the publication of a ground breaking report, which makes the case for a major increase in direct employment in the electrical contracting sector.
The report titled: Direct Employment A Study of Economic Business and Social Outcomes has been written by Howard Gospel, Emeritus Professor of Management at King’s College London. In undertaking his research, Professor Gospel draws on interviews with over 50 experts, industry materials, government reports and peer-reviewed academic research.
The report was commissioned by the Electrotechnical Joint Industry Board, which sets the standards for employment, welfare, grading and apprentice training in the electrical contracting industry.
Professor Gospel found that levels of direct employment in electrical contracting had declined more sharply in the UK than nearly any other country. He described this as not a ‘natural phenomenon’ but a result of specific actions and decisions taken over many years by industry clients, contractors and successive governments, especially in areas of procurement, tax, social security and employment law.
The decline in direct employment has led to a sharp increases in genuine self-employment, false self-employment and what the report describes as “false direct employment through intermediaries of various kinds” (such as payroll companies).
Professor Gospel recognised that there are short term advantages for companies that avoided directly employing electricians. But he argues that these short-term advantages are outweighed by long-term disadvantages. He notes that for workers while 'take-home pay may be higher for some, this is not always the case and it is certainly not the case over a working life'.
Gospel highlights the negative effects of non-direct employment, stressing that this is especially grim for skills training and threatens apprentice training, career progression and the industry’s capacity to take up new technologies and techniques.
The professor further notes that non-direct employment reduces health, safety and wellbeing and undermines industry regulations. It also reduces productivity and, from a wider society viewpoint, it reduces tax receipts that fund public services.
Gospel’s solutions to increase direct employment are two-fold: Firstly, clients and large contractors need to demonstrate leadership by awarding contracts to companies that directly employ their workers and that they also need to enforce direct employment throughout their supply chain.
Secondly, there is a need for public policy changes including removing artificial incentives towards false self-employment and false direct self-employment through the tax system.
Unite assistant general secretary Gail Cartmail, who contributed to the report, said: “This excellent and detailed report must act as a game changer in shifting attitudes to direct employment, both in the electrical industry in particular and the entire construction industry in general.
“Vitally, the report identifies that government policies have allowed for the decline in direct employment and that crucially a great deal of the solution to the industry’s problems are in the government’s hands.
“The conclusions on skills are staggering. Effectively the industry is strangling itself to death. Unless immediate action is taken it won’t meet the challenges to recruit new workers or meet future challenges such as the green industrial revolution.
“Rather than sweep the findings of this report under the carpet, clients, large contractors and the government need to accept its findings, adopt its recommendations and lobby others to follow suit.”
To help promote direct employment Unite is working together with the Joint Industry Board (the national agreement for electricians) and the Electrotechnical Certification Scheme (ECS) to promote ECS Check, a new online system that allows main contractors and clients to check the qualifications and training of electricians working on their projects.
The union has also persuaded around 60 local authorities to sign construction charters which commit them to requiring companies that are rewarded local government contracts to directly employ the workers on such contracts.
Notes to editors:
For media enquiries ONLY please contact Unite senior communications officer Barckley Sumner on 07802 329235 or 0203 371 2067.
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Unite is Britain and Ireland’s largest union with members working across all sectors of the economy. The general secretary is Len McCluskey.