Anticipating the Covid-19 restructuring tsunami

Judith Kirton Darling AGS IndustriALL Europe

Isabelle Barthes
AGS IndustriALL Europe

By Judith Kirton Darling and Isabelle Barthes – IndustriALL Europe

There’s time to avoid the carnage of employer-led restructuring following the pandemic – but only if workers and unions set the agenda.

States which experience the power of nature, through tsunamis, hurricanes and other devastating weather and geological events, mostly have well-established warning and safety strategies to anticipate the damage and limit the loss of life. As trade union leaders

representing Europe’s industrial workers, we know the vital importance of anticipating restructuring: if badly managed it can wreak damage, on those who lose their jobs and on those who survive, lasting for generations.

Yet Europe’s tools to anticipate economic change are woefully inadequate—often limited to broad skills strategies.

Just as European leaders seem eventually to have learnt the lessons of 2008-2009, in terms of endorsing Keynesian capital investment, now they need to learn quickly the lessons for restructuring posed by the pandemic.

Since its onset, but especially over recent weeks, we have been sounding the klaxon to warn policy-makers and politicians of the coming tide of company restructuring. It’s a klaxon we have used before.

Legislative proposal

In January 2013, after three years of the devastating eurozone crisis, the Spanish Socialist MEP Alejandro Cercas presented a unique proposal to the plenary chamber in Strasbourg. Using the new parliamentary right to initiate legislation (under article 225 of the Treaty on the Functioning of the European Union), he advanced draft legislation on ‘Information and consultation of workers, anticipation and management of restructuring’. The aim was to minimise the social costs of restructuring for workers and local and regional authorities.

The draft set out measures to anticipate change, ensuring the sustainability of company concerned and the employability of its workforce, recognising the need for detailed social plans in cases of restructuring with clear roles for all stakeholders (social partners and public authorities). It also targeted business, as the costs of poorly managed restructuring’s for those made redundant as well as those remaining in the company or workplace’s have negative impacts on firms.

National and regional policy and legal frameworks in the EU differ regarding the management of change, which tends to increase inequalities between workers and create distortions between companies. In that context, the Cercas initiative aimed to establish a level European playing-field, by setting minimum standards promoting a proactive and socially responsible approach.

The Cercas report thus called for an EU legal framework, relying on five key elements:

•strengthened rights to information, consultation and participation for workers’ representatives / trade unions, to ensure the long-term viability and sustainability of European workplaces;

•individual rights to training and the promotion of negotiated training programmes (at company and sectoral level);

•long-term corporate strategic planning, taking into account employment and skills needs;

•social dialogue and collective bargaining to negotiate fair solutions through tailor-made agreements, with public authorities playing their part where necessary; and

•support mechanisms for workers who fall victim to economic change, facilitating transition from one job to another.

Speaking ahead of the adoption of his report by the European Parliament, Cercas said: “In these three years we have lost two jobs for each of those created and we have already lost 10 per cent of the industrial fabric of the European Union. We must do something to make it better and so that the despair that pervades millions of workers today, in dozens of regions, in towns and industrial zones, changes.”

Major announcements

The coming tsunami of restructuring will likely dwarf these statistics. Already major announcements in the automotive and aerospace sectors outstrip the past economic crisis; after the summer, the trickle-down effect will be felt through supply-chains and regional economies.

The pandemic is accelerating existing structural changes in many sectors, although in some these have been interrupted. Either way, we are witnessing massive and simultaneous sectoral restructuring across our economies leaving us, as Cercas said in 2013, with a choice between “civilisation and barbarism”. The political consequences of the latter are difficult to gauge.

In a sad twist of fate, the architect of the 2013 draft legislation (as of most EU legislation on information and consultation), the European Commission labour lawyer Fernando Vasquez, died at the beginning of the summer. He was a passionate believer in social Europe. He worked with us “off the record”, as we tried to mobilise support for the measures, against internal commission inertia and employer opposition.

Ultimately the proposals were killed by those forces, despite a significant parliamentary majority for the report. The failed attempt silenced the debate on the need for a legal toolbox on restructuring for too long.

Real toolbox

Today we are increasingly hearing commission and employer voices make the case for “managed transitions” and “Just Transition” these are pseudonyms for anticipating change. Rarely is the link made to the need for a real toolbox to ensure that transitions are smooth for individuals. While many companies learnt the importance of keeping their workforce close through the crisis in 2008 – 2009 hence the corporate and widespread public support for short-time working schemes Europe’slegal framework on economic restructuring is fraying at the edges.

In several countries we have witnessed announcements to cut thousands of jobs, without informing European and local works council’s let alone giving them the possibility to discuss alternatives with real decision-makers. We hear about companies adopting Europe-wide cost-saving plans, with major impacts on salaries and working conditions, without engaging in discussions with trade unions at local and transnational levels.

Together with the European Trade Union Confederation and other European union federations, we have made the case to the commission that while existing rights must be enforced that will not be enough it wasn’t in 2008-2009.

Perhaps now is the time to revisit the Cercas report before the Covid-19 tsunami of restructuring cases drowns out our warning klaxons. We need to anticipate economic change and lift all those affected to safe ground – and quickly.

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CTUF – IER Fringe Meetings – TUC & Labour Connected

The Campaign For Trade Union Freedom and the Institute of Employment Rights will be holding joint fringe meetings at this years ‘hybrid TUC’ and the
Labour Connected event.

Trade Union Congress 2020

Reconstruction After The Crisis Repaying The Debt To The Nation’s Workers

Monday, September 14th, 6:30pm to 7:30pm

Chair: Carolyn Jones

Speakers: Prof Keith Ewing, IER/CTUF, Dave Ward, General Secretary CWU, Andy McDonald MP, Shadow Secretary of State For Employment Rights, Janet Williamson, Senior Policy Officer TUC

Labour Party Connected

Reconstruction After The Crisis – Repaying The Debt To The Nation’s Workers

Monday, September 21st, 6:00pm to 7:00pm

Chair: TBA

Speakers: John Hendy QC, IER/CTUF, Andy McDonald MP, Shadow Secretary Of State For Employment Rights, Claudia Webbe MP, others TBA

The pandemic revealed to many that some seven million ‘key’ workers, essential to maintain the fabric of society, are amongst the worst paid and least legally protected of the entire workforce. Too often, they suffer from poor terms and conditions, precarious legal status, insecure and unpredictable hours, income and jobs, and lack of protection of their health, safety and wellbeing.

The contrast between their critical role and the terms and conditions under which they work reveals the irrational and unjustifiable nature of the so-called ‘labour market’ in which working people are no more than disposable commodities, ‘human resources’.

But as the ILO set out in 1944,  workers are not commodities, but human beings. The economy should be democratised, with each worker’s voice being heard at the very top.

There are clear signs public opinion has swayed against austerity and towards major economic changes. So what do we want and how do we get it? Join us to discuss both.

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Remembering Tony Merrick of the Pentonville Five

Tony Merrick lead away by the police at Midland Cold Storage in 1972.

By Steve Turner

Tony Merrick, who passed away last week, was a giant of the British trade union movement who stood up to the state’s attacks on workers and was jailed with the Pentonville Five for defending his class.

Reflecting on the life of Tony Merrick and his pivotal role as one of the Pentonville Five from my home in south east London, I was reminded of another famous strike connected with the Thames riverside – that of the Bermondsey women workers in 1911. Like the Five, those women and girls, working mainly in jam and biscuit factories, inspired a generation of workers to fight back against injustice, their strikes quickly spreading to other groups, including those in the nearby Surrey docks.

And so it was when Tony, along with Vic Turner, Bernie Steer, Con Clancy and Derek Watkins, was imprisoned in 1972 for picketing Midland Cold Storage (MCS) – now the site of the Olympic Park in Stratford, East London. Anyone who has been in my office at Unite’s headquarters will have seen the framed poster on my wall signed by the Five which acts as a proud and constant reminder to me not only of their struggle, but of those of construction and postal workers, miners and transport workers at the time, the ongoing fight for justice for the Shrewsbury 24, and later disputes such as those led by the women workers at Grunwick, Sky Chefs and Gate Gourmet.

These ‘unofficial’ walkouts and strikes were part of a collective demonstration of working-class militancy to defeat Tory attacks on an increasingly confident and powerful shop stewards movement, independent, rank and file-led trade unionism and collective bargaining. They represented a mobilisation of working-class solidarity that defeated the Tories’ flagship Industrial Relations Act – which included powers to sequestrate union assets, prevent mass picketing and secondary action and created a National Industrial Relations Court (NIRC).

This wave of action also saw the Official Solicitor emerge to eventually ‘Free the Five’ following national solidarity strikes, the national shutdown of the docks and much of our press, public transport and even the threat of a TUC-supported general strike. Two years later, we saw the defeat of Ted Heath’s government and a Labour victory in the general election of 1974. This, ultimately, led to the repeal of the Act.

The lessons we learn from this period are important ones for our struggles today. The Pentonville Five exposed the true role of the state and its agents in the police, private investigators and the secret services. Their attempts to crush dissent by infiltrating, undermining and sabotaging the activities of trade unionists demonstrated their contempt for anyone seeking to defend jobs, pay and wider working-class interests.

Phone taps, mail intercepts and undercover ‘plants’ inside our movement were all utilised in the attack on our unions and class. This included the ‘recruitment’ of the soon-to-be chair of the executive council of the Transport and General Workers’ Union itself. Brian Nicholson, a docker, was subsequently ‘exposed’ as an agent of the state (MI5) working at the heart of the TGWU, the dockers’ own union. I’ve got no doubt that today’s Brians are being groomed for office by those same organisations – who never changed their view that our unions represented an ‘enemy within.’

The 1972 actions and the picket that led to the arrest of Tony and his comrades were essentially about jobs, pay and union organisation in the face of the introduction of new technology, in this case, containerisation. The Five and their union weren’t opposed containerisation itself but were campaigning to create a ‘buffer zone’ around ports where only registered dockworkers could load, unload and handle container cargo.

Midland Cold Storage was inside one of these buffer zones, less than two miles from the London docks, and the dispute was essentially to assert the dockers’ right to control what was dock work. This was a crucial and legitimate demand when you consider that newly-emerging container traffic required a tenth of the existing workforce to handle.

As with Heaton’s in Merseyside, MCS attempted to ban the picket, seeking an injunction from the NIRC. The imprisonment of the Five for contempt of court, having refused to appear before and accept the ruling of the NIRC, led to an immediate national stoppage in the docks, with tens of thousands of printers, transport workers, miners and others walking out over the following days.

Thousands joined daily demonstrations at the gates of Pentonville prison and by the time the Five were released five days later, hundreds of thousands had walked out and the TUC had supported the call for a general strike. Their release resulted in defeat – albeit temporary, as we now know – of the casualisation and deregulation plans involved in the National Dock Labour Scheme. These reforms were finally implemented some 17 years later by the Thatcher government.

Tony Merrick, alongside all those involved in those disputes, inspired a generation of trade unionists and shop stewards. But the battles for control of our unions by elected workplace shop stewards, and the instilling of lay member democracy in our rulebooks, continue. Our unions have seen numerous attempts, some successful, by officers and a growing bureaucracy to control the actions of rank and file members.

Unite follows its predecessor, the TGWU, and the proud shop stewards of our legacy engineering unions in being led by our members. But this had to be won and we have to fight constantly to retain our values and politics. We have never repudiated industrial action and today we have a £36 million strike fund. We try to inspire confidence in our shop stewards and class at every opportunity to encourage them to fight back, winning not only at work for our members but in society and politically for our class.

And as we face today’s challenges, including automation, artificial intelligence and the digitalisation of work, recovering and rebuilding post-Covid, Brexit and the climate emergency, there are opportunities for us to win. Our agenda must be bold: a million green jobs, diversification and a transition to a greener, cleaner economy, a shorter working week, early retirement and the fair distribution of our common wealth across our nations.

That’s what Tony and his generation of fighting trade unionists have taught us, and the challenge they leave us. We have to inspire and nurture the will to fight, have confidence in our ideas and in the need to break bad laws when necessary. We must recognise the need for class solidarity and unity of purpose.

We know, of course, that this will only be achieved by a confident, united and powerful trade union movement, rooted in our workplaces and communities; one that can win the battle of ideas and convince workers of the need to fight for that better, fairer and greener world.

It’s a challenge that will define our leadership in the coming years. I look forward to that fight with the same enthusiasm that Tony did forty-eight years ago. Rest in peace, comrade.

Steve Turner is the assistant general secretary of Unite the Union, responsible for manufacturing.  He is also national chair of the People’s Assembly Against Austerity.

This article first appeared on the Tribune website August 4th, 2020

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Professor Keith Ewing: Covid-19 has exposed a failing state

Professor Keith Ewing, president of the Campaign For Trade Union Freedom

Writing in 1918, Lenin reflected on the ‘rottenness, mendacity and hypocrisy of capitalism’.   In the same text he wrote also of bourgeois democracy being ‘a paradise for the rich and a snare and deception for the exploited’:  The Proletarian Revolution and the Renegade Kautsky.   While of course Lenin knew nothing of Covid-19, the wisdom of both observations has been brutally exposed by the pandemic, as badly exploited workers have been failed by the State, with their trade unions both increasingly marginalised and vilified.  

At the time of the lockdown, about a third of the workforce was designated as ‘critical workers’ – engaged in health and social care, as well as in transport, food distribution and retail.   Unlike others who could work from home, most ‘critical workers’ had to be physically present.

Although not true of all critical workers, a large number were in low paid employment, dependant on the minimum wage.  Moreover, as a group, their income had fallen by 4% over the last ten years compared to 0.3% for all workers.

At the moment of its greatest crisis the government was thus demanding that the greatest sacrifice should be made by those who were least well rewarded and in some cases those most vulnerable.  Yet the hypocrisy continues, with ‘inflation busting’ pay rises announced for some public sector workers, including doctors and teachers.  But nothing for many others in the public and private sectors who have been on the front line:   care workers, food production and distribution workers, bus drivers, and a host of others.

Others still – such as taxi and delivery drivers as well as others in the gig economy – are waiting on a UK Supreme Court decision in the Ubercase argued last week to find out if they qualify for the statutory minimum wage, or to receive holiday pay.   But along with exploitation and low pay, we also confront the reality of ‘critical workers’ being exposed to Covid-19 and dying as a result. This is due in part to the unwillingness of government to keep people safe – the first responsibility of the State.

Successive Tory governments have failed to maintain the most basic personal protection equipment.   Stockpiles not replenished were allowed to become obsolete.  The government had no domestic capacity to manufacture PPE, and failed in its emergency legislation to take the power to requisition private property to manufacture and distribute essential equipment.    It was thus forced to rely on over-stretched global supply chains, these based in part in seems on the gross exploitation in Malaysia of Burmese migrant workers.

But it was not only the State’s failure to provide basic protective equipment that revealed ‘rottenness, mendacity and hypocrisy’.   Our inadequate labour laws failed to require employers to have in place occupational sickness schemes, leaving workers dependent on statutory sick pay of only £95.85 a week.   Workers with mild symptoms of the disease were thus expected to choose debt and immiseration as the price of altruism.   Bad employment practices are a risk to public health, as well as the health of the workers themselves.

Equally offensive – and equally a threat to public health – are the funding arrangements for the delivery of public services.   Public services have been outsourced to profit-making international service companies. These companies have led the way with the commodification of labour – using workers only as and when needed. Hence the explosion of agency workers employed in different locations, inadvertently exposed to the risk of carrying disease from one site to another.

Add to which the exclusion of trade unions over many years.  True, the unions were inspirational in helping to secure incomes during the initial stages of the pandemic for nine million workers with their proposal for the Coronavirus Job Retention Scheme.   But although a real feather in the cap of leading trade unionists, the Scheme as introduced gave no rights to workers, it being entirely at the discretion of the employer whether to enrol workers under the Scheme or to make them redundant.

This was above all else a scheme to protect big business, workers its secondary beneficiaries.   Nowhere is there a better example of Lenin’s thesis in The State that the bourgeois democracy is a ‘machine’ used by businesses to ‘maintain their power’.   And nowhere is there a better example of Lenin’s thesis that the more democratic the State ‘the cruder and more cynical is the rule of capitalism’.  On the eve of the lockdown, the ‘democratic’ House of Commons authorised £266 billion government support to business, no questions asked.

Yet while trade unions nevertheless won plaudits for preserving incomes, this was to change when Johnson returned to duty and workers were being coerced back to work.  Since then we have seen only the abuse of union leaders – notably in the NEU – insisting rightly on the need to ensure that proper steps are taken to protect the health and safety of their members.  At the same time, there has so far been no response publicly from the government to maintain State intervention to protect jobs.  On the contrary, jobs are now slipping away on a daily basis.

We are on the threshold of one of the greatest economic crises of capitalism, as measured by GDP decline, business closures, unemployment and universal credit applications.   Yet the response of the neo-liberals is as predictable as it is risible.   According to Sajid Javid – some-time Tory Chancellor writing in The Times just after the lockdown started – ‘the free market is the only way to revive the economy’, insisting that after the pandemic has passed ‘we must not allow the Left to win the argument about wealth creation’.

That was followed by a Daily Telegraph columnist writing a week later in celebration of Marco Datini, a 14th century Italian entrepreneur, who ‘emerged from the plagues of 14th century Tuscany an even richer man’.  Said to be the ‘forerunner of the modern businessman’, Datini was ‘proof that if there is one thing as adaptive to change as viruses, it’s capitalism’. We now know who has paid with their lives and livelihoods as a result of Covid-19.   We will find out soon enough who has benefitted financially at their expense.

But in the meantime it seems most likely that the neo-liberal road will be the direction of travel of the Tory government, a government for whom the word mendacious was created to describe.   It is true that billions of pounds have been spent on the Coronavirus Job Retention Scheme and other measures designed to bail out business.   Indeed some cling to the naïve belief that under the Johnson government the spending taps will be turned on forever, and that no austerity measures will be introduced to cut the levels of government expenditure. Continue reading

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