Amazon, Sports Direct and ‘gig economy’ firms such as Deliveroo and UberEATS are seeing their reputations suffer after accusations of labour exploitation. By Tom Idle.
There is nothing like a piece of legislation to focus the minds of corporate executives. The UK’s Modern Slavery Act – designed to protect vulnerable workers in parts of the world where forced labour and human trafficking often trump basic employee rights – has certainly made CEOs sit up and take notice since it was introduced last year.
However, moving to ensure that supply chains are free of human rights abuse
and that workers’ rights are protected is nothing new. Responsible sourcing certificates issued by the likes of the Rainforest Alliance and Fairtrade have long sought to tackle the issue. More and more companies – particularly in the food sector, with its complex supply webs – are investing in building stronger and closer relationships with suppliers and agents.
But when it comes to keeping those workers closer to home happy, protected and empowered, current corporate strategies leave a lot to be desired.
According to the Economist Intelligence Unit’s latest report looking at global resource challenges for business, access to good labour remains a constant challenge, with 70% of survey respondents saying they faced labour challenges and half pointing to a lack of skilled people as a top risk. Meanwhile, improving overall working conditions was the most cited response (27%) as an effective solution for dealing with those challenges, along with innovative human resources policies.
Yet the survey results present absolutely no correlation to a spate of recent examples of companies treating their staff poorly.
The high-street retail chain Sports Direct has been accused of paying temporary workers below the minimum wage thanks to lengthy security checks at the end of each shift, for which they were not paid. And workers were regularly docked 15 minutes’ pay for being one minute late.
At Amazon, many delivery drivers claim to have worked illegal hours, receiving less than the minimum wage in return. A BBC investigation in November found that drivers were regularly expected to deliver 200 parcels a day, often having to break speed limits to stay on schedule and barely finding time for a toilet break. Amazon, of course, has now entered the foodservice sector with its usual gusto.
Deliveroo, another new food delivery service that works for thousands of restaurants across the UK, faces a backlash from many of its couriers, bemoaning their payment of £3.75 a delivery. In the absence of an hourly fee, they are not paid anything when there are quiet times. Now, a group of workers are taking legal action to boost their rights.
The success of Deliveroo, UberEATS and the like is built on the so-called “gig economy” – where “workers” start when an app is opened on a smartphone and end when they swipe out. The flexibility these set-ups offer has disrupted traditional working patterns, but they are also fast becoming a byword for exploitative practices. By classifying drivers as independent, self-employed workers, an increasing number of companies are able to offset their employment responsibilities, such as paying a decent wage or giving people sick pay.
Deliveroo said it was “committed to providing great opportunities for UK riders, with the flexible work riders value, and a payment model which is fair, rewarding and better matches riders’ time with customers’ orders”. While that may be true – and a large, happy workforce is testament to that – the whole episode highlights how the disgruntlement of just a handful of people can seriously damage corporate reputations.
Ministers have also become increasingly uneasy with the rapid growth of this new labour force. In October, HMRC announced that it was launching a specialist unit to investigate companies which opt out of giving workers employment protections.
“The government is girding its loins for a serious fightback against those companies trying to wriggle out of their obligation to pay the minimum wage by enforcing ‘self-employment’ on their workers,” said the influential Labour MP Frank Field recently. “The prime minister has set companies the task of delivering a decent minimum for their workers, and companies now know they will be caught out if they jeopardise this effort.”
The situation also poses questions regarding the sustainability of these business models. Being at the mercy and whim of legislative changes is not a happy place for any business to be in and Deliveroo execs will no doubt be watching the court reaction with bated breath.
But what is a business without its people? Deliveroo is nothing but a fancy app; without the people doing the driving, it has no business whatsoever. Yes, staff pay and benefits make up a huge chunk of company expenditure. But ignoring the rights of workers – many of which make up the community in which companies serve – is no way to build a strong, resilient and trustworthy organisation fit for the future.
Tom Idle is a journalist and content creator specialising in sustainable business storytelling.
