PFI + EU = poverty pay for migrant workers

From the Guardian, a story which demonstrates the terrible effect of the expansion of the EU and New Labour’s Private Finance Initiatives on the living standards of construction workers.

This case was uncovered because of the strength of the union and the fact it’s happening on a government project (albeit outsourced & subcontracted) – many similar cases go unreported.

Eastern European migrants working on the construction of a £600m NHS hospital have been taking home as little as £8.80 for a 39-hour week, the Guardian has learned, in what has been described by union bosses as one of the worst instances of employee abuse in the building sector since EU enlargement.

The group of around 12 men, most of whom are Lithuanian, are construction workers on the government-backed PFI project in Nottinghamshire. Though allegations of abuse of migrants’ rights on construction sites are widespread across the country the scale in this instance has shocked unions and politicians.

Michael Clapham, MP for Barnsley West and Penistone, who is due to raise the matter in parliament today, said: “This happened on a government project where there are good rules and a strong union – who knows what is happening on the hundreds of smaller sites around the UK?”

According to industry guidelines and an agreement between unions and the building firm Skanska, which is overseeing the project, workers on the site should have been earning more than £7 an hour. But after deductions for rent, tool hire and utility bills, some of the Lithuanian employees were receiving so little observers say it left them virtually destitute.

Payslips seen by the Guardian show that one man worked a 39-hour week and took home just £8.80 after his entire monthly rent was deducted in one week, in breach of the law. A second worker was paid £79.20 for a 63-hour week and a third worked 70 hours a week for just £66. As they were registered as self-employed they did not receive holiday or sick pay. One man had £228 taken from his pay in one week for tools. The men each had a further £76.80 deducted weekly as their payment to the “construction industry scheme”, which technically registers them as self-employed, meaning their employers have no requirement to pay national insurance.

Employers are allowed to make deductions from their staff’s pay for accommodation, but the amount is limited by law to a maximum of £30.10 a week, or £4.30 a day. According to Ucatt, the building union, this means that an employee working 37 hours at £6 an hour should take home a minimum of £174.14 a week unless they have agreed to any other deductions. The men refused to talk about their experiences when approached by the Guardian. However, a colleague said at least seven of them were sharing a three-bedroom flat and they cycled to work to save money. “We are worried about how they are managing to survive,” he added.

Alan Ritchie, general secretary of Ucatt, said: “This case is the worst we have seen. These workers were virtually destitute.”

The men have been working on the Kings Mill hospital site in Mansfield. They are not employed directly by Skanska, which has subcontracted another firm, which in turn subcontracted a third, responsible for supplying the men. A number of other subcontractors are operating on the site and have no complaints against them.

Last night Skanska, the main contractor on the site, said it had been made aware of the allegations two weeks ago and took “such issues very seriously”. It has since held meetings with the subcontractors and the union. “On June 24 matters were resolved with the parties involved. Skanska understands that all back pay will be paid to the relevant workers on or around July 2.” The Guardian attempted to contact the subcontractor that had directly employed the men at an address it had registered with Companies House but there was no response. Last night Ucatt’s regional secretary, Steve Murphy, said he was confident the men would receive back pay for deductions and missing overtime in the next few days. “We will be able to eventually get a fair resolution for these workers. What is truly frightening is to think what happens on the many unorganised sites in our country.”

The men were building internal walls and some were working up to 70 hours a week without receiving overtime. Clapham said: “Working that long on a building site is hard work. How can we expect to improve safety standards in this industry when employers carry on like this?”

Philip Hyland, partner at the employment law firm PJH Law, based in Stamford, Lincolnshire, said that in his experience excessive deductions from migrant workers’ payslips were widespread, and cited an experiment in which his firm invited local Poles to contact it. Of 80-100 people who got in touch over a month, he said, only one was getting the correct pay.

Ucatt is campaigning to have the Gangmasters Licensing Act extended to cover the construction industry, which would mean that employment agencies and subcontractors have to pass minimum standards before they can supply labour.

A spokesman for the department for business said that the construction industry was covered by the Employment Agency Standards Inspectorate. “The reason we have not extended the GLA into construction is because there has been no consensus to do so and we have felt there are more effective ways to tackle abuses in the sector.”

Case studies
After a 39-hour week, one man took home £8.80 when his monthly rent of £155 was deducted in one week. Another man worked a 70-hour week, earning £420, but was not paid overtime and after having £228 deducted for repayment on tools was left with £66. A third man worked a 40-hour week but was left with £13 after paying £155 for a month’s rent. As self-employed workers they received no holiday pay.