Fair work

net zero# Fair Work & Living Wage

What is Fair Work

Fair work is work that offers all individuals an effective voice, opportunity, security, fulfilment and respect:

• Effective voice: employers create a safe environment where dialogue and challenges are dealt with constructively, and where employee views are sought out, listened to and can make a difference
  
• Opportunity: fair opportunity allows people to access and progress in work and employment
  
• Security: people have reasonable security and stability of employment, income and work
  
• Fulfilment: people have access to fulfilling work
  
• Respect: people are treated respectfully, whatever their role and status
  

Businesses that commit to Fair Work must sign up to these principles:

• Appropriate channels for effective voice and employee engagement, such as trade union recognition
  
• Investment in workforce development
  
• Actions to tackle the gender pay gap and create a more diverse and inclusive workplace
  
• No inappropriate use of zero-hours contracts
  
• Paying the Real Living Wage (currently £9.50 in Scotland)
  

Files

• Fair work & Net Zero

Overview

Fair work has two main areas that we have experienced
1. Language (and how poorly it works in this area)
2. Fundamental understanding of what Fair Work is

Fair Work Tools and Sites

• Fair Work Employer Support Tool
• Livingwage.org.uk
• Scottish Gov Fair Work First guidance
• Close the gap

2021 Round 1

Tested 5 Themes

Themes

• Effective voice
  
• Opportunity
  
• Security
  
• Fulfilment
  
• Respect
  

We also asked them:

• Can people commit to this.
  
• Can a company answer yes or no based on this description. (Why Not)
  
• Would they be able to say they meet each of the 5 criteria
  or
  
• Will they commit to work towards the criteria
  

• Do people understand why we are embedding the 5 criteria
  
  
  

• XXXXX
  

Asked them to suggest percentage compliance with 7 statement

• % of staff paid RLW (i.e. less than 50% or more than 50%)
  
• % of staff on zero hour contracts (i.e. less than 50% or more than 50%)
  
• % Gender pay gap (less than 50% or more than 50%)
  
• % of females in leadership roles (0-10%; 10-30%; 30-50% over 50%)
  
• % of young people employed (0-10%; 10-30%; 30-50% over 50%)
  
• % of staff trained in the past 12 months
  
• % of staff consulted in past 12 months (i.e. staff survey)
  

Findings

• People do not understand Fair work Well.
• Industries experienece/welcome/implement Fair Work and Living Wage very differently.
  Some common pain points are:
  • Job defined wage hierarchies (ripple effect)
  • Low Automation / High levels of low paid jobs
  • Low Margins
  • Fluid workforce (can easily leave for the same job elsewhere)
  • BONUS paying industries (May priorities Bonus paying work over Development)
  • Low Audit environments
  • Highly competitive markets with low cost to switching supplier/vendor (paying staff more may make your products too expensive)
• Some positives are:
  • Most people agree with them in principle and are working towards them even if slowly.
• In Some industries it is prevalent and viewed positively
  • In regulated industries these things are usually mandated.
  • In other (usually better paid) industries, there is often a staff based push towards tfulfilling these social initiatives. It helps with recruitment.
    It heklps with Staff retention.
    
• In some industries it is viewed extremely poorly
  • Tourism, Hospitality, Food and Drink have major issues with Fair Work and Especially with Real Living Wage.
    
  • They cause problems within their wage Hierarchies. This means that raising wages of lowest paid staff may make them equal with the next job up. This then makes staff in that job request more money, and this ripple effect goes all the way to the top.
    
  • In industries with small margins, this can be severely damaging.
  • The impact is higher in industries that have many staff on minimum wage and where there is a pay hierarchy based on defined roles.

2021 Net ZeroRound 2

Most of the people who we spoke to didn’t fully understand what Fair Work is, and many hadn’t heard the term before. While all of them saw the moral benefits of Fair Work, and they understood why we’re asking the businesses that we work with to treat their workers fairly, some struggled to see how some of the Fair Work principles applied to their business.

They were also concerned that not meeting some of these principles would exclude them from getting funding and support from us, so we learned that we need to make it clear that we just want to understand where they are in their Fair Work journey so we can support them if necessary.

Employee engagement

Most of the small businesses that we spoke to have an informal feedback process, with limited processes in place to act on feedback. Mentioning trade unions threw people off a bit because some industries aren’t unionised.

Customer quotes:

• “No one is unionised in our business but we have regular employee engagement surveys.”
• “We could improve and develop our employee engagement channels.”

Workforce development

Most companies provided some form of staff training and felt positively about workforce development, though many had done less training this year due to Covid. Some businesses felt that there were limited training opportunities in their sector, and that once staff reached a certain skill level, it was hard for them to upskill anymore.

Customer quotes:

• "We don’t have any formal training plans – it's all bespoke or one-off for individual candidates.”

• “Workforce development is a given in our industry.”

Gender pay gap

Most companies that we spoke to didn’t think they had an issue with their gender pay gap – but some companies also said that they don’t employ any women. They responded positively to tackling the gender pay gap and were willing to be transparent, but most didn’t see it as an issue for their business.

Customer quotes:

• “We don’t have a gender pay gap because we don’t have any women.”
• “We haven’t done anything on the gender pay gap because we have such a diverse workforce.”

Zero-hours contracts

They key issue here was the term ‘appropriate’ - we don’t make it clear when zero-hours contracts are appropriate and when they’re not, and businesses found this confusing.  

Customer quotes:

• “It might be worth exploring what ‘inappropriate’ use of zero-hours contracts means.”
• “We have staff on zero-hours contracts by mutual agreement.”

Real Living Wage

The Real Living Wage was a sticking point for some of the companies that we spoke to. While they all saw it as something to aspire to, and many companies were already paying it, some felt that it wasn’t realistic for smaller companies. They were also concerned that it could make wage hierarchies tricky in lower paying industries.

Customer quotes:

• “The Real Living Wage is a concern to me as a business owner.”LB1(#_msocom_1) KD2(#_msocom_2) 
• “We try and pay a bit more than other companies to get a better quality employee.”

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is there a positive comment at all about living wage   LB1(#_msoanchor_1)

@Lindsay Branston Just added one. Still looking for quotes for some of the other areas. KD2(#_msoanchor_2)