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Regulating workfare (or not) November 9, 2011

Iain Duncan Smith is clear that if claimants don't “play by the rules” their benefits will be stopped. But will the Work and Pensions secretary pursue companies who disregard the rules protecting claimants sent to them on unpaid 'workfare' placements with the same enthusiasm?

In its guidance to “ensure customers are not exploited by employers,” the Department for Work and Pensions (DWP) warns job centres that employers “may be tempted to get involved in the delivery of provision as a way of getting cheap labour or getting someone in to help during a busy period.” Alarm bells will already be ringing for keen Corporate Watch readers, who will remember discount retailer Matalan saying that one of the benefits of the placements in their stores was the “extra help” they gave, “especially during busy times.”

In response to a Freedom of Information request, the DWP said placements must be “genuinely additional” and that “a participant must not fulfil a role which would otherwise be advertised as vacant.”

This came as a surprise to a claimant in Surrey, who was told by her job centre to work unpaid in the local Tesco Metro or risk losing her benefits. Sent on a four week placement at the store, the woman, who wishes to remain anonymous, was sent to the freezer and chilled aisles to do the same work as the other paid workers. At the end of the four weeks she was told there were no vacancies and that, as the store was under-staffed and could not afford to pay her a wage, she could continue to volunteer there until a vacancy came up. As two more 'volunteers' started placements in the store in her fourth week, she is not hopeful a paid job will appear in the near future.

Her experience also suggests that job centres sending people to these placements are similarly unconcerned by the DWP's instructions to ensure claimants are not sent to activities that “raise doubts under the Health and Safety Act.” In her first three days she was not allowed the protective gloves and jacket worn by her paid colleagues as, she was told, only Tesco employees could wear Tesco branded clothing. When she brought this up with job centre staff she was told they were not able to comment.

Tesco, which posted half-year profits of £1.9bn in August, is taking 3,000 18-24 year olds on work placements in its stores this year and is not the only major company accused of using 'volunteers' to do work that would otherwise be done by paid staff.

Holland and Barrett told Corporate Watch it started taking people on eight-week placements in June this year and will take 1,000 work placements over 12 months in its head office, its warehouse in Burton-upon-Trent and 300 of its stores. It said that of the 250 people who have worked on an unpaid placement, 50 have been offered permanent paid work and it hoped this would “improve over the coming months.”

However, an employee at one of the health food retailer's stores, who also wishes to remain anonymous, told Corporate Watch the presence of people on workfare placements meant part-time workers “don't get the overtime usually available to us [as it] is now being done by the workfare person. While there may not necessarily be a decline in the number of paid staff, there is definitely a decline in the number of paid hours.”

“Holland and Barrett likes to employ lots of people on 10-hour [a week] and other part-time contracts,” she said, “because this makes for a 'flexible' work-force ... and they don't have to shell out for as much paid holiday. 1,000 placements of 30 hours a week for 8 weeks at a time equals 240,000 unpaid hours. 240,000 times by the £6.08 minimum wage is almost £1.5m. Multiply this figure by all the businesses taking part in the scheme and that's millions of pounds not being paid to workers that they would have ordinarily earned.”

She said that one person's placement did lead to a job at the end of it but “ordinarily it would be very difficult for such people to get a job - if workfare people are doing regular 30 hours a week for eight weeks at a time, what hours or employment are available to those who have completed their stints?”

And the failure of job centres to enforce the workfare guidelines is not due to them being too complicated or cumbersome. Unlike the pages of conditions claimants have to obey to get their benefits, there are very few to ensure they are not exploited. Noting it “would be difficult to produce an exhaustive list of unsuitable activities” for placements, the only ones the DWP can think of that “generally speaking” might be “relevant” are those that raise “doubts under the Health and Safety Act,” plus anything that may involve “religion or party politics,” “the customer breaking the law” or “working in the adult entertainment industry.”

Have you been sent on an unpaid work placement or do you know someone who has? Contact Corporate Watch on 02074260005 or contact[at]

See also:

'It's exploitation and it's repellent': Retailers, councils and charities benefiting from workfare
September 26, 2011

Unemployed people ‘bullied’ into unpaid work at Tesco, Primark and other multinationals
August 12, 2011

'I was a volunteer for six months and wasn’t given a job or paid any money'
August 12, 2011

'Making profits from the the unemployed is reprehensible'
August 12, 2011

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