Transcript Minimum wage in the private security industry – UK and Hungary

Minimum wage in the private
security industry
(UK and Hungary)
László Neumann
Institute for Political Science, Hungarian Academy of Sciences
Common sectoral features
• Male-dominated activities, segmented labour market (cash transit vs.
manguarding service)
• Longer regular working hours (although reduced during recession)
– Guards may be required to cover long shifts, such as the
traditional Friday evening to Monday morning shift (UK)
– In Hungary 24 hour shifts are common, it is in fact legal for
employers to set a 60-hour week in jobs requiring ‘stand-by’ duty
• Very high share of small/micro firms
• Domestic market, competitive cost-led bidding for contracts with
clients
• Company strategies to tackle competitive pressure:
– lead to opportunities to upgrade technologies to offer higher value
services
– or to downgrading, risk of informal / grey economy competition
Similarity in Industrial Relations contexts
UK
Hungary
• Decentralised collective
bargaining with 34%
coverage
• Union density is
systematically low among
all low paid groups - men,
women, full-timers and parttimers
• A key problem is the limited
use of extension
mechanisms (compared
with other West-European
countries).
• Dominantly company-level
bargaining with 35%
coverage, however
company level wage
agreements coverage is
shrinking
• Union density is low (12%
nationally), especially in
sectors dominated by small
and medium-sized firms
• Weak sectoral collective
agreements, extension is
limited to four sectors
UK Research findings I.
Uprating pay and upskilling jobs
•
•
2005
2006
2007
2008
2009
2010
Highly unionised cash transit division, major strike in early 2000s,
highly concentrated industry - employer willingness to improve
conditions
Strong, clear GMB focus on uplifting pay and skills – ‘win-win’ 5-year
pay agreement
National NMW
Adult rate % annual change
n.a.
£5.05
5.9%
£5.35
3.2%
£5.52
3.8%
£5.73
1.2%
£5.80
£5.93
2.2%
SecurityCo - cash transit division
Minimum rate % annual change
£7.57
n.a.
£8.25
9%
£8.75
6%
£9.62
10%
£10.00
4%
£10.20
2%
% Gap
49.9%
54.2%
58.5%
67.9%
72.4%
72.0%
UK Research findings II.
But for manguarding services, major problem of client-led
pay agreements
•
Company agreement for terms and conditions, but
multiple pay agreements for individual clients (and
many not covered by joint regulation)
•
Client-demarcated „bargaining units”
•
Same job paid NMW in some contracts and up to
£7.50 in others
UK Research findings III.
• Different clients present different puzzles for pay
bargaining:
-Public sector client wanted a wider job role – agreed
a 15-year contract, but eroded pay enhancement
-Banking client set 47 separate pay rates for each
site reflecting value of site to client not skill of job
• However, unions’ pay equity strategy generally
supported by employer interested in diminishing labour
turnover:
• Passing on higher wage costs to clients
• Union considers organising drive key foundation for the
union’s low pay strategy
Hungary: Distribution of hourly wages
All private sectors
Security industry
• Real wages (controlled for inflation), with minimum wage markers
• NMW does matter:
•Gradual right shift of distribution shows that real earnings kept
growing between 2005 and 2008
•Security: skilled minimum = mode of distribution (about 70% of
workers’ pay)
Research findings Hungary I.
• Typical company strategies to tackle low prices (pushed down
by strong competition, especially in public procurement):
– extensive network of sub-contractors as franchisees
– casual employment, envelop wages and unlawful labour
practices
– In „stand-by” jobs MW is paid for 60 hours weekly instead of
the 40 hours mandatory working time
• Local level trade unions are weak: either they do not even exist
in SMEs, or loyal to the management’s wage policy
• Problems are addressed on a higher (sectoral) level
– Negotiations in the bipartite Sectoral Social Dialogue
Committee
– Objectives: regulation of wages and unit (hourly) fees
Research findings Hungary II.
Construction as a role
model for creating a
sectoral agreement
• 10-year long preparation by
well-established employer
organisation and trade union
• 2006: concluding an
agreement which was
immediately extended by
the Ministry
• It was to the strong support
of the government which
aimed to combating black
labour
• 2007: Government decree
on unit fees
Security development
• 2008: Following four year
preparation a sectoral collective
agreement including wage tariffs
concluded
• 2009: the government was not
sufficiently supportive of
extension
• 2010: Although wage tariffs were
amended in a way that favoured
employers, eventually employers
voted against it
• No Government decree on
hourly (unit) fees
A mirrored summary
UK
• Some employer support for an
industry-wide minimum wage in
order to provide a defence
against the intensive cost-cutting
competition
• Mixed union success in
sustaining and growing a gap
between the lowest pay rate and
the NMW
• A client-led system of pay
determination.
• Improving union membership is a
key foundation for the union’s
low pay strategy
Hungary
• The wage tariffs of the
sectoral agreement was
rejected by the majority of
employers before its
extension
• Company unions’ weak
bargaining power
• prevailing individual pay
setting
Despite IR similarities, it does make a difference that Hungarian employers’
organisation and trade unions are new and organisationally weak