Memorandum submitted by Unite-the Union
(formerly Amicus)
1. INTRODUCTION
1.1 Amicus is the UK's second largest trade
union with 1.2 million members across the private and public sectors.
Our members work in a range of industries including manufacturing,
financial services, print, media, construction and not for profit
sectors, local government, education and the health service. The
union has just completed a merger with the TGWU to form the UK's
largest union of over two million members.
1.2 Amicus welcomes the decision by the
Trade & Industry Select Committee to conduct a far reaching
inquiry into the state of the UK construction industry. We believe
this first comprehensive Parliamentary overview of the industry
is well timed, given its ongoing expansion and the massive high
profile infrastructure developments it is expected to deliver.
1.3 Amicus members are involved in all aspects
of construction industry across the whole of the public and private
sector, both in engineering construction and the installation
of plumbing, heating and electrical systems.
1.4 Amicus members are responsible for the
building and repair & maintenance of key elements of Britain's
infrastructure including energy sources, nuclear, gas and coal
fired power stations, petrochemical refineries, chemical plants,
pharmaceuticals, steel and other industrial output centres, structural
steel for public and commercial building, major water treatment
and steel bridge construction.
1.5 Amicus believes that high profile infrastructure
developments are crucial to the ongoing expansion of the whole
of the UK economy. Amicus believes that such developments cannot
be delivered either on time or on budget without a commitment
from all stakeholders to:
— National collective agreements.
— Equal treatment of migrant labour.
— Best practice in public procurement.
— Industry accredited apprenticeships
and training.
2. THE UK CONSTRUCTION
INDUSTRY
2.1 The industry over the past 7 years has
had the most sustained period of growth in decades. A snapshot
of the buoyant demand shows that in the 12 months to the end of
November 2006 the top 30 contractors in the UK construction industry
had completed or were engaged in some 4,290 projects with a combined
value of £23,216 million.[56]
2.2 The main industry "customers"
continue to be a mix of public sector and large private sector
corporations, with retail heavily represented. That said, by far
the largest client in the twelve months to December 2006 was the
Department for Health who awarded a total of 210 contracts with
a total value of £3,166.8 million.[57]
2.3 The current growth of the UK economy
is reliant on the infrastructure developments the industry will
deliver. Not only that, as UK infrastructure increases with economic
expansion so does the demand for repair & maintenance.
2.4 A scan of the national press gives some
idea of the work facing the industry in the coming years. The
current and planned work on nuclear de-commissioning is crucial,
which is almost certain to be followed by a sustained period of
nuclear new build. Other infrastructure developments are almost
too numerous to mention, some are significantly more high profile
than others.
2.5 Notwithstanding the relative demand
arising from the construction of such high profile major projects
as the London 2012 Olympic site, some industry experts are already
predicting a 45% increase in infrastructure activity between 2008
and 2013. In the transport sector alone, included in such forecasts
are projects such as:
— Network Rail's plans to deliver
the revised Thameslink 2000 scheme.
— The East London Line extension.
— The Thames Gateway Bridge at
Becton.
2.6 On the same regional level there is
the development of the Thames Gateway and the proposed Crossrail
scheme. In addition there are current plans for the widening of
the M25 motorway.
2.7 A significant concern for the industry
will be the recent publication of the Construction Skills Network
Report for 2006. Working on their calculations, the construction
industry is expected to expand by 12.7% between 2006 and 2010.
The report predicts that the industry will need an additional
348,000 workers over the next four years.[58]
2.8 These projected shortages are not an
isolated estimate, nor are they being overlooked by industry commentators.
It is not just the industry press that is reporting, "Crucial
construction projects could be hit by skills shortage".[59]
3. NATIONAL COLLECTIVE
AGREEMENTS
3.1 Longstanding national agreements between
employers associations and the trade unions facilitate excellent
employment relations in an industry that is particularly prevalent
with small employers. Current estimates suggest that the industry
employs around 10% of UK workers across 192,404 firms.[60]
Significantly 170,471 of these companies employ 13 or fewer workers.[61]
3.2 Within the context of this part of the
Amicus response it should be understood that Amicus involvement
in the referenced national collective agreements relates largely
to our joint operation of the following:
— NAECI National Agreement for
the Engineering Construction Industry;
— JIB Joint Industry Board for
the Electrical Contracting Industry;
— SJIB Scottish Joint Industry
Board for the Electrical Contracting Industry;
— HVAC Heating, Ventilating, Air
Conditioning, Piping and Domestic Engineering Industry National
Agreement;
— JIB-PMES Joint Industry Board
for Plumbing Mechanical Engineering Services;
— SNIJIB Scottish & Northern
Ireland Joint Industry Board for the Plumbing Industry; and
— MPA Major Projects Agreement.
3.3 Central to the Amicus role in the UK
construction industry is our ongoing support for national collective
agreements, not only for their role in maintaining terms and conditions
for our membership but also because we believe they provide stability
for an industry otherwise characterised by poor industrial relations.
3.4 Given the increasing expansion of the
industry, the ongoing industrial relations stability cannot be
overlooked. It is not insignificant that, in the ten years to
2005 the number of working days lost due to "stoppages"
fell by 83%.[62]
3.5 Without the current benefit schemes
enshrined in the national agreements Amicus believes that not
only will workers leave the industry, (especially in periods of
economic downturn), but that it will become increasingly difficult
to address the long term skills shortages.
3.6 It should be noted that these benefit
schemes are provided by industry regulated independent bodies
and provide for a range of industry financed provisions for directly
employed workers, including:
— Permanent and Total Disability
Waiver;
— Death Benefit and Accidental
Death Benefit;
— Occupational Health Assessment;
— Occupational Health Care; and
3.7 Without doubt one of the most essential
aspects of industry provided benefit schemes is the provision
of pensions. The contribution of these schemes to the construction
industry cannot be overlooked. Especially when research suggests
that only 38% of employers in the industry make any form of pension
provision.[63]
3.8 With the transient nature of the UK's
construction industry such provision is essential, not only for
the well being of the workforce, but also for recruitment and
retention of workers into the industry.
3.9 Furthermore, Amicus believes that collective
agreements can provide the framework for developing the relationships
between workers and employers that will facilitate ongoing improvements
in productivity to the benefit of all stakeholders. This position
has been supported by independent and objective research such
as the Baker Mallett report[64]
on the implementation of the Major Projects Agreement on the BAA
Terminal 5 Project.
4. THE TRADE
UNIONS EXPERIENCE
OF HEATHROW
TERMINAL 5
4.1 This is not an isolated success story
for the UK construction industry. However, Amicus believes that
it is highly significant when considering future procurement strategies
for major projects such as the London 2012 Olympics and Paralympics.
4.2 The total value of the Terminal 5 project,
commissioned by the British Airports Authority (BAA), is reported
to be in the region of £4.2 billion. Included in the project—along
with a new terminal building—are roads, car parks, other
transport facilities, hotels and offices.
4.3 The overall project, due for final completion
in 2011, has over 60 separate contractors and comprises of 16
major projects and 147 sub-projects on a site of 260 hectares.
4.4 Central to the agreement between BAA,
its contractors and the trade unions are:
— A commitment to promoting direct
employment.
— Collective agreements for the
project built upon, and no less favourable than, existing national
agreements.
— A partnership approach adopted
to encourage trade union involvement.
— Specification of quality employment
standards throughout the supply chain, with active monitoring.
— Highest standards of health
and safety.
— An acknowledgment that trade
unions have a substantial contribution to make to the project,
so trade union membership is encouraged and the function of trade
unions on site facilitated.
— A commitment to building a learning
environment in which there is broad access to training and learning
at the workplace.
— Brokerage of employment opportunities
for local residents.
— A shared commitment to equalities
issues.
4.5 There is a consensus view that the Major
Projects Agreement (MPA) adopted for Terminal 5 has set new standards
in organising major construction projects.
4.6 The MPA has firmly established its value
to the client, contractors and workforce on the Heathrow Terminal
5 project, with enhanced welfare, health and safety, employment
reward and industrial relations stability for a project of such
a large size.
4.7 It should also be recognised that the
proactive and interventionist approach taken by BAA has been beneficial.
It is their rigorous and persistent monitoring of these high standards
that has ensured that the contractors deliver on their obligations.
Central to their ability to operate in this method is the open
and recognised involvement of the trade unions.
4.8 As an objective measure of the relative
success of the procurement strategy adopted at Terminal 5 it is
worth considering the fact that Roger Bayliss, BAA's Construction
Director, remains committed to the procedure for future projects
at Heathrow. This is even more significant when we consider the
fact that BAA has currently budgeted for a £6.8 billion investment
programme at Heathrow, Gatwick and Stansted over the next 10 years
(including the redevelopment of Heathrow Terminal 2 in time for
the London 2012 Olympics).
5. MIGRANT LABOUR
5.1 Amicus believes that in a significant
number of cases overseas workers are discouraged from communicating
with their UK counterparts on construction sites let allowed a
dialogue with union representatives who would provide their only
access to information on employment rights in the UK. Amicus believes
that this culture, coupled with the language barrier, creates
an extremely worrying situation where health & safety requirements
are at best overlooked and at worst bypassed in favour of reducing
costs.
5.2 In research recently undertaken for
the Northern TUC—Organising Migrant Workers in Construction:
Experience from the North East of England—the point
concerning the working environment for migrant construction workers
is further substantiated. The main findings of this work for migrant
workers were that:
— they are treated with little
respect;
— their employers often have little
concern for their heath and well-being;
— the legalities that most of
us do not even consider, (eg having wages slips, contacts of employment,
and wages paid in full), are often not afforded to many; and
— that the threat of violence
is never far from the surface.
5.3 This is further supported by the briefing
from the Citizens Advice Bureau Home From Home? (December
2005). In which it is claimed that many migrant workers across
the UK economy have similar experiences, including:
— inaccurate representation of
the nature of the jobs available; specifically concerning pay
and holiday entitlement;
— inadequate information provided
on workers rights; and
— lack of transparency and proportionality
surrounding the deductions made by the employer for accommodation.
5.4 Amicus does not seek to exclude migrant
labour. However, given our recent experiences of inconsistent
practices within the UK construction industry Amicus is keen to
see that all workers employed in the industry are paid at the
same collectively agreed rates. Amicus is extremely concerned
that the exploitation of vulnerable workers will become the hidden
legacy of the current expansion in the UK's built environment
infrastructure
5.5 To ensure consistency and eradicate
exploitation Amicus called persistently upon the UK Government
to implement the true spirit of the EU Posted Workers Directive.
6. PUBLIC PROCUREMENT
6.1 As the largest single customer of the
UK construction industry, Amicus is calling on the UK Government
to ensure that the 2012 Construction Commitments agreed
and published by the Strategic Forum for Construction 2012 Task
Group in July 2006 are adopted for all public sector contracts.
6.2 Not insignificantly the 2012 Construction
Commitments states that, "The employment practices of
all organisations, including sub-contractors and the self employed,
will be scrutinised by the client and the supply chain to avoid
abuses."[65]
7. INDUSTRY ACCREDITED
APPRENTICESHIPS AND
TRAINING
7.1 There can be little doubt that a skills
shortage does currently exist within the industry. The obvious
solution is to increase training. Amicus believes that the available
people and skills already exist in the UK economy to fill the
gap. Too few companies take on too few apprentices. We should
be talking about an "investment shortage" not a "skills
shortage".
7.2 Amicus also believes that more needs
to be done to attract older workers into the sector. With the
continuing haemorrhaging of manufacturing jobs, many of these
workers have the key transferable skills to enter the construction
jobs market through bona fide adult training schemes to
NVQ level 3.
7.3 This situation has not gone unnoticed
by JTL, the UK's leading training provider for the sector, which
informs visitors to their website that, "Whilst most JTL
apprentices join the industry at the age of 16 or 17, young people
up to the age of 24 can apply as long as you are not in full-time
education. Although, you should be aware that there is limited
provision over the age of 19 due to Government funding restrictions".[66]
7.4 Employers are also concerned about the
lack of a co-ordinated response from the UK Government. In recent
research undertaken to formulate the Sector Skills Agreement,
a significant number of employers voiced their concern about,
"the Government's policies on funding and the lack of support
that some companies feel they have had in training new entrants".[67]
8. CONCLUSION
8.1 Amicus believes that a directly employed
construction workforce is essential to facilitate an expanding
construction industry, which itself is a core foundation for continued
UK economic growth.
8.2 The importance of direct employment
through national collective agreements, (with enshrined benefits
packages), in the industry is not just a trade union prerequisite.
Amicus believes it is essential on three counts:
— as a disincentive for workers
to be encouraged into bogus self employment schemes which;
— facilitate tax avoidance; and
— make insufficient provision
for private and state pensions.
8.3 Amicus believes that such an inquiry
must have a clear understanding of the fact that the UK construction
industry is unlike any other sector of the economy.
8.4 The proliferation of small employers,
the complexity of supply chains on major projects and the transient
nature of the workforce all increase the requirement for active
and enforceable regulations and legislation.
8.5 Amicus believes this can only be facilitated
by the direct participation of all stakeholders. Trade unions
are essential in this process.
May 2007
56 Barbour ABI data, December 2006. Back
57
Emap glenigan, December 2006. Back
58
Construction Skills Network Report for 2006. Back
59
Financial Times 21 November 2005. Back
60
www.cnplus.co.uk Back
61
DTI Construction Statistics 2006. Back
62
DTI Construction Statistics 2006. Back
63
Employers Pension Survey-DWP. Back
64
A Study of the Implementation of the Major Projects Agreement
on the BAA Terminal 5 Project-2005. Back
65
2012 Construction Commitments. Back
66
www.jtltraining.com Back
67
Draft Sector Need Analysis of the Building Services Engineering
Sector. Back
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