The Government have been evasive about revealing too many details of their schemes aimed at forcing people to work for their benefits. This lack of concise information has led to confusion for both benefit claimants and small business owners alike.
There are several schemes in which employers can get workers for free. The largest scheme is the Work Programme, under which unemployed claimants are placed under the control of Welfare to Work companies such as A4e. Unemployed people can be sent to work for no pay for periods of up to six months at a time. This scheme is open to both the private and charitable sectors. These workers must not be paid.
It is unclear whether unemployed people who refuse to attend workfare on this scheme will face benefit sanctions. Guidance published by the DWP suggests that they will, however this guidance was changed abruptly earlier in the year.
The Minister concerned, Chris Grayling, has told a Parliamentary Committee that no-one has ever been forced into ‘workfare’ on the Work Programme, however Freedom of Information requests have revealed it to be common practice. The best advice for employers who are opposed to unemployed people being coerced by sanctions into working for free is to avoid those on the Work Programme.
Work Experience is a scheme for young people under which they can be sent to carry out unpaid work for up to two months. This is the scheme which drew protests earlier in the year and is currently at the centre of a court case to establish its legality. It is therefore possible that this scheme may turn out to be unlawful. The scheme is open to private and charitable sector organisations. Workers must not be paid.
Once again it is unclear whether sanctions apply to this scheme. The Government has announced that young people will not be sanctioned should they refuse to attend (or leave at any point). Informal reports from benefit claimants suggest however that young people are still being threatened with sanctions for non-attendance. Once again, if you are opposed to benefit sanctions, it is best avoided.
Mandatory Work Activity is four weeks unpaid work and used as punishment by Jobcentre staff who feel that somebody isn’t trying hard enough to find a job. It is believed that those who refuse to attend workfare on the above two programmes are sentenced to Mandatory Work instead. The system operates in a similar way to the Community Payback scheme for offenders, however presently unemployed people are not required to wear uniforms. This scheme is open to charities and businesses which can demonstrate a ‘community benefit’. Workers must not be paid.
These are the largest ‘workfare’ style schemes however Sector Based Work Academies and the Community Action Programme are just two more examples of the endlessly complex Government schemes intended to compel the unemployed to work for their benefits.
The schemes are administered by Welfare to Work companies who are contacting small businesses now in order to secure placements for unemployed claimants. Under some schemes these companies get paid for every person they refer to an unpaid position and will use every trick in the book to convince businesses to accept a ‘workfare’ worker.
Whilst for many employers the idea of employing people to work for free is a ‘no brainer’ there are several potentially costly pitfalls that must be considered.
Workfare has proved hugely unpopular with the general public. An informal survey carried out at pickets of companies using workfare showed that around 9 out of 10 people refuse to enter a shop or restaurant when they discover staff aren’t being paid. It is not just charities like Oxfam and Marie Curie who have issued clear rejections of the scheme. Major companies such as Tesco, Boots and Burger King have also pulled out of the scheme due to threats of mass boycotts and damage to their reputations.
The Government will try and keep your company’s involvement in workfare a secret, however there is no legislation planned to prevent workfare workers from revealing where they are sent. Should your company use workfare you should assume that at some point people will find out. Can your company afford the kind of negative publicity which might arise should your customers find out you don’t pay your staff?
Despite Government claims, it is not just anarchists, socialists and Trade Unionists who object to unpaid work. Thousands of people have bombarded workfare using companies on social networking sites such as twitter and facebook. A Conservative Councillor recently quit his post over the Government’s treatment of the unemployed. Workfare is unpopular across the political spectrum.
As well as widespread condemnation of the scheme online, there have been an unprecedented numbers of protests and campaigns targeting companies which use workfare. Whilst this guide for employers was being written a National Week of Action Against Workfare was taking place.
One company – Holland & Barrett – was so overwhelmed by the sheer force of opposition to workfare that they reluctantly abandoned their use of unpaid workers. A group calling themselves Solidarity Federation repeatedly called for pickets of their stores around the UK. These pickets were well supported by other activist groups and the general public alike. A huge boycott campaign was also launched, whilst the company were repeatedly mocked on the internet.
In a PR disaster the company pulled out of workfare accusing protesters of acting violently towards their staff. These claims were not substantiated and led to many customers turning a temporary boycott of the firm into a permanent one. Holland & Barrett had corporate plans to replace around a quarter of their workforce with unpaid labour, however even this colossal saving was not enough to stop them leaving the scheme. Could your company afford to be the next Holland & Barrett?
Workfare is unpopular with Trade Unions with many of the larger Unions issuing blanket condemnations of the practice. If you have a heavily unionised workforce then you should expect resistance from current employees should you take on unpaid staff.
Many workfare workers are believed to be highly politicalised. Rumours just started on the internet have suggested union activists, and even anarchists are deliberately infiltrating un-unionised workforces via workfare schemes. There is a danger of sabotage. Websites have appeared which show complex ways in which workers can cost employers money without being traced. We can not allow ourselves to be held to ransom by these individuals. But it is vital that employers recognise the consequences of having a potential fifth column of hardened radicals present within their workforce.
Due to the changes currently being made to sickness benefits, the nature of unemployed benefit claimants has changed. Many people, including people with often serious physical and mental health conditions, are now judged ‘fit for work’. There have been numerous stories in the press of people dying soon after being judged able to work. In addition there have been several suicides linked to benefit reforms as well as the recent story of a man who set himself on fire outside his local Jobcentre.
Your business needs to be aware that potential unpaid workers may be vulnerable or simply unwell. It is your company that is likely to be legally responsible should adequate insurance and Health and Safety procedures not be in place.
Remember that Jobcentres and Welfare to Work companies may not be aware of any health conditions or disabilities that workfare candidates may have. Other disadvantaged groups, such as those dependent on drugs and alcohol or ex-offenders, are also likely to be referred to workfare positions. Once again, Jobcentre staff are not likely to be aware of a claimant’s personal circumstances, and claimants are under no obligation to reveal information to them or you.
Should a vulnerable person have an accident or even die in your business premises then it is you and your company who will find themselves on the front pages. Consider the experiences of Molly Prince, the boss of insurance firm Close Protection who were recently in the news after workfare staff were made to sleep under a bridge. Molly was forced to resort to employing the costly services of Max Clifford after her personal life, and previous convictions became the story of the day. Could you, or your family, handle this kind of tabloid intrusion into your personal life should the worst happen?
These are just some of the negative factors which businesses and charities alike should consider before employing workfare staff. Perhaps the main concern however is the legality of the scheme. The current court case attempting to have workfare ruled illegal is unlikely to be the last legal challenge to unpaid labour. If workfare is ruled to be unlawful at any point then companies who partook in the scheme may find themselves with a huge wages bill.
Theatre Union BECTU and the National Union of Journalists have recently been successful in gaining back dated wage payments for interns who were employed without pay on non-government work experience placements. HMRC has also demanded National Insurance to be paid for the period that interns were employed.
If workfare is ruled to be similarly illegal then companies could find themselves with a wage and National Insurance bill for every workfare worker they have ever employed.
That recruiting unpaid staff may not be as profitable as it appears is easily demonstrated by the number of large employers who have pulled out of the scheme. It is clear that for many businesses, workfare isn’t working. Small companies in particular should consider the potential costs of what may look, on the surface, to be an attractive idea. There really is no such thing as a free lunch as many workfare using companies have recently discovered.