Tag Archives: Cost of living

Tackling the wrong kind of flexibility: the work of our legal helpline in 2014

By Richard Dunstan, Workflex blog editor

Amid the biggest living standards crisis in a generation, and with research by the Institute for Fiscal Studies and the London School of Economics suggesting that the Coalition’s tax and benefit reforms have hit families with children under five harder than any other household type, 2014 was another busy year for the Working Families helpline team.

Simon, a single parent working for a provider of services to the elderly, called the helpline after his employer refused his formal request to change his work pattern to accommodate an unavoidable change in his childcare. Although employed on a zero-hours contract, Simon had for several years worked five full days a week, including Saturday and Sunday. But now his childcare support had changed, Simon could no longer work weekends, and he was afraid he would have to give up his job.

Simon is one of 2,766 working parents and carers – 85 per cent of them women, and almost one in four a single parent – who telephoned or emailed the helpline in 2014. The helpline team provides free advice on key work-life balance rights such as maternity and paternity leave and pay, provides support on requesting and negotiating flexible working – or with contesting imposed changes to an existing working arrangement – and advises on challenging pregnancy, maternity or other discrimination at work and accessing relevant social security benefits and tax credits.

The team’s annual report, published today, shows that, despite some reduced capacity due to staff changes, and an increase in the proportion of callers requiring more than one interaction, the team advised and supported almost 200 more callers than in 2013. And, as in previous years, the most common issues raised by callers were: maternity leave and pay; benefits and tax credits; other maternity rights; flexible working; and pregnancy or maternity related discrimination.

With essential living costs having risen faster than wages in recent years, and childcare costs continuing to spiral upwards, many of those who contacted the helpline were simply struggling to find a way to make work pay.

Nicky called the helpline shortly after returning to work from maternity leave, because she was struggling with the cost of childcare for her six-months-old child. Nicky earns just over £20,000 per year, and her partner – an apprentice electrician – £15,000 per year. The helpline team was able to confirm that Nicky is receiving the right level of working tax credit, but Nicky feels she has no choice but to give up work to care for her child.

Many of the women on maternity leave who contacted the helpline team were finding it difficult to manage on the weekly statutory maternity pay of just £138.18, capped at below-inflation annual increases since 2013 and equal to just 60 per cent of the national minimum wage.

Jackie called the helpline while on maternity leave and receiving statutory maternity pay, because she wanted to take more than nine months’ maternity leave but simply couldn’t afford to take unpaid leave. The helpline team reports that this is a “very common call”, and that many women in low-paid jobs have little choice but to return to work at the end of statutory maternity pay.

Many others who called or emailed the helpline in 2014 were trying to adopt a flexible working pattern in response to a major change in their caring responsibilities, such as taking on the care of an elderly parent, relationship breakdown, or the onset of disability of a child or partner. And, in theory at least, this became easier from June 2014, with the extension to all employees of the right to request flexible working, previously limited to parents and carers. In the words of the then employment relations minister, Jo Swinson, “we want to see flexible working become the norm, not the exception”.

However, the helpline team report that, if there is one stand-out feature of their work in 2014, it is that the notion of flexible working is simply illusory for all too many of the parents and carers who contact the team for help.

The wrong kind of flexibility

In low-paid sectors like social care, retail, cleaning, and hospitality, hundreds of thousands of men and especially women work on zero-hours contracts and other ‘casualised’ forms of employment that offer little in the way of pay, guaranteed hours or job security.  And what Citizens Advice calls the “hyper-flexibility” of such jobs is all one way.

By their nature, such insecure jobs, with varying and unpredictable weekly hours, can result in significant variations in income, making it hard to arrange (or retain) childcare and disrupting social security payments. But they also make it very difficult if not impossible for workers to successfully request a change in their hours or working pattern to accommodate a change in their family circumstances, or to resist a problematic change in their hours or working pattern imposed by their employer.

For a refusal to work shorter, longer or simply different hours can easily lead to there being no hours at all. And the introduction of upfront tribunal fees in July 2013, unaffordable to many, has made it harder than it’s ever been to challenge any unlawful action on the part of the employer. In the months following the introduction of fees, claims for unfair dismissal fell by 65 per cent, and claims for sex or pregnancy discrimination fell by 80 per cent. In the words of one senior employment judge, it is “difficult to resist the conclusion that access to justice has been curtailed”.

Mandy had worked for a bank on a zero-hours contract for several months without any indication from her employer of dissatisfaction with her work. However, when Mandy informed her employer she was pregnant, her manager stated there had been complaints about her work. And, when Mandy challenged this, the manager changed the story to “you haven’t been working hard enough”. Mandy’s hours were then reduced to zero – in effect, she was summarily dismissed.

Similarly, Denise, employed on a zero-hours contract, had had her working hours substantially cut since she had taken time off for a pregnancy-related illness. When she had challenged her employer, pointing out that several new staff had been taken on, she was told “we need people we can rely on”. The helpline team advised Denise that her treatment amounted to pregnancy discrimination, but Denise said there was no way she could afford to pay the fees of £1,200 to pursue a tribunal claim.

Against this rather grim backdrop, the helpline team can – and frequently does – make a huge difference to the situation of individual callers. Good information and personalised advice empowers callers to make an informed decision about whether and how to negotiate with their employer, the most effective way to challenge unlawful treatment, or how to change their working pattern in such a way to maximise their income once benefit payments, tax credit awards and childcare costs are taken into account.

Evidence from the casework of the helpline team also informs the wider policy and campaigning activity of Working Families, including our ‘families and work’ manifesto for next month’s General Election. So we remain extremely grateful to the team’s key funders, Matrix Chambers and the Big Lottery Fund, and to our many other supporters who make the work of the team possible.


How employers can reduce in-work poverty

In this guest post, Katie Schmuecker of the Joseph Rowntree Foundation argues that employers have an important part to play in reducing the UK’s serious and growing problem of in-work poverty.

There are 1.4m jobs being done by people on zero-hours contacts, according to new figures published by the ONS. This means a fairly sizable chunk of the workforce has a job, but won’t necessarily be offered any hours by their employer from one week to the next. Perhaps it is not surprising that zero-hours contracts have become the poster-boy for bad employment practice in 21st century Britain.

But as the debate about an appropriate response to this particular problem steps up a gear, there is a risk that we fail to see the wood for the trees. As pernicious as the insecurity brought by zero-hours contracts can be for some workers, they are but one part of the UK’s much bigger problem of in-work poverty.

More than half of the 13 million people experiencing poverty in the UK live in a household where at least one person is working. This gives an indication of the scale of the problem. And it is not a problem that can be solved by pushing up the minimum wage and regulating the use of zero-hours contracts alone. Neither is it a task that government can tackle alone: employers also have an important part to play.

New research by the Joseph Rowntree Foundation examines how employers can help to tackle working poverty. It takes paying the Living Wage as a given, and asks what other employment and management practices might help to address poverty. Written by economist John Philpott, importantly it also asks what the business case is for employers implementing different practices.

The report looks across human resources management and development practices such as structured recruitment, training, performance management, flexible working and fringe benefits, such as help with travel and childcare costs or access to a staff discount scheme. It finds that – when delivered well – these practices can help employees progress to a better job, reduce the stress of balancing work and home life, and help reduce the cost of living. For employers they can boost productivity, employee motivation and loyalty. They can also reduce staff turnover costs and absenteeism.

So far sounds like a win-win situation.

But there are three caveats.

First, getting the desired outcome relies on practices being delivered by good-quality managers, an area where the UK falls short compared to other competitor countries.

Second, they seem to work better when employees are involved in decision making, for example through trades unions or staff councils.

Third, and most challenging, is the large number of British businesses operating perfectly profitably competing on the basis of low-cost and low-quality products and services. So long as these companies have no difficulty hiring people into low-paid, low-skilled jobs that require little by way of formal skills, and where job-related skills can be acquired relatively quickly and cheaply, there is little incentive for them to change.

Many employers are only vaguely aware – if at all – of the problem of poverty among their workforce, and much can be achieved by working with employers to raise awareness and improve business practice in ways that are good both for the employer and the employee. We cannot simply focus on zero-hours contracts as a symbol of what is wrong with the labour market.

Rather, we need employer aspiration to translate into demand for a more skilled workforce, changing the nature of work at the bottom end of the labour market.

Until that happens ,we stand little chance of making serious headway with tackling in-work poverty.

Finding financial help for working families

In this guest post, Emma Lamberton sets out why Turn2Us is running its ‘Benefits Awareness Month’ campaign.

“Despite working full time, my wages simply weren’t enough to support my family, and we started to fall behind on our rent and bills. Affording the right food for our children and even keeping the house warm became too much of a stretch.” Isaac

Sadly the problems experienced by Isaac and his family are indicative of growing numbers of families across the UK. Despite being in work, parents are struggling financially as they are hit by a lack of stable employment, a fall in real wages and the rising cost of living. In fact, Joseph Rowntree Foundation research shows that nationally, for the first time ever, there are now more working households living in poverty than there are non-working households.

It is clear that the impact of economic improvements has yet to reach these families and we recently found that over three-fifths (62 per cent) of working parents on low incomes feel their financial situation has worsened in the last year. Shockingly, almost half (49 per cent) say that their outgoings now outweigh their earnings.

The toll this is taking is severe, with almost half (48 per cent) of parents in work forced to cut back on food and other essentials, nearly two-fifths (38 per cent) saying they have been unable to sleep and almost a third (30 per cent) reporting depression as a result of their situation.

We know from speaking to the people we help that there is often a lack of awareness and a reluctance to claim the financial support available. This is the case for many working parents who may not realise that they could be eligible for help in the form of Working Tax Credit and other welfare benefits. Yet our recent research has shown the value of checking potential entitlements, with 85 per cent of working families who currently claim saying benefits have had a positive impact on their lives, helping with bills, childcare costs and even avoiding debt.

Through our current campaign Benefits Awareness Month, we want to raise awareness of in work benefits and help more people in need to access financial support. We are encouraging people to take a few minutes out of their day to use our free Benefits Calculator and check what financial support they could be entitled to. Even if people have checked their eligibility before, it is always worth doing so again, especially if they have recently experienced a change in circumstances such as a decrease in income, having a baby or separated from a partner.

Our website also features information on other support available for each employment group, so that people can access further help whether they are employed full time or part time, are self-employed, on a zero hour contract or on long term leave.

Throughout the campaign we are also encouraging people to visit our website to share their own experiences of struggling despite being in work to help us build a picture of what life is really like for people living on low incomes.

Through hearing about Turn2us, Isaac managed to make a successful claim for Housing Benefit, at around £400 per month. He says this extra income has ‘helped his family enormously’ with their food and heating costs and that they are ‘able to cope better with everyday life’. Through our campaign, we hope that more families experiencing similar issues will be able to access the financial support available to them.

Benefits Awareness Month, which runs until 16 May, is being supported by a number of charities and organisations across the UK, including Working Families. For more information, please visit the Be Aware section of the Turn2Us website or join us on Facebook or Twitter.



TUC and London Child Poverty Alliance highlight the crisis of low pay

By Richard Dunstan, Policy & Parliamentary Campaigns Officer

To mark the start of its Fair Pay Fortnight, the TUC has today released figures showing that, on average, workers have “lost more than £4,000 in pay since 2009”.  According to the TUC’s analysis, construction workers are earning an average of £88 per week less than they were before the global financial crisis of 2008 and the onset of economic recession, and retail and hospitality workers are £25 per week worse off, with their wages predicted not to recover until 2024. Meanwhile, the cost of living has soared by 25 per cent.


Since 2008, there has also been explosive growth in precarious forms of employment such as zero-hours contracts, and record numbers of workers who wish to work full-time are now stuck in part-time jobs or have been forced into low-income self-employment. TUC general secretary, Frances O’Grady, notes that “before the abolition of wages councils [in the 1990s], workers used to be protected by a higher industry rate that also set rates for holiday and sickness. Now the national minimum wage only covers basic pay. Regardless of your experience, if you start your working life in a low-paid job you are more likely to end it there and do more for the same money. That’s why we are arguing for fair pay and protection as part of the whole pay package”.

Whilst it is hard to see Ms O’Grady’s call for a return of wages councils gaining much traction with politicians, the TUC is absolutely right to highlight the fact that, for most working people, pay hasn’t been keeping up with the cost of living. And not only are the living standards of such families being squeezed ever harder, but low pay steals time from family relationships and damages family well-being.

To achieve a good work-life balance, working parents and carers need a flexible job that pays enough to raise a family. They need the twin currencies of time and money. So we need to see more employers paying the Living Wage, and the national minimum wage needs to be both substantially increased and better enforced. And we need to work towards statutory maternity and paternity leave – currently paid at just 58 per cent of the adult national minimum wage rate – being paid at wage-replacement levels. For better and more equal pay will lead to better and more equal parenting.

So the issue of ‘fair pay’ is certainly one that we will be addressing in our ‘families & work’ manifesto for the May 2015 general election. In the meantime, Working Families has joined with ten other member organisations in the London Child Poverty Alliance – including the Child Poverty Action Group, Shelter, the Children’s Society, and Trust for London – to issue a ‘family friendly London’ manifesto for the local elections in London in May this year. Noting that there are “nearly 600,000 jobs in London paid less than the Living Wage, a rise of over 40 per cent over the last five years”, the manifesto calls on London local authorities to take on “an important leadership role not only in paying their own staff and contracted-out employees a Living Wage, but in encouraging other businesses to sign up too”.

The manifesto notes that, apart from wages not keeping pace with rising living costs, Londoners face a range of barriers that make working and bringing up a family in the capital difficult:
  • There is a shortage of family-friendly jobs
  • It is difficult to find flexible and affordable childcare
  • Access to advice and information services is limited
  • Housing cost are soaring and there is shortage of quality homes.
The manifesto sets out ten practical policy pledges, each one offering London local election candidates the opportunity to show they are committed to making London work for families. Why not ask your local candidates to sign up to these pledges?

Falling down: the real burden of childcare

By Richard Dunstan, Policy & Parliamentary Campaigns Officer, Working Families

Earlier today the Resolution Foundation think tank published its annual audit of living standards in Britain.  The Financial Times described the 62-page report and its 38 graphs as “a brightly coloured chartfest of post-recession misery”.  And, for sure, the report offers little to cheer about.  But there is one graph that left my jaw on the floor.

After noting that “certain price rises directly erode work incentives”, the report drops the bombshell that “many second earners, overwhelmingly women, barely benefit from going to work.”  If a typical second earner in a middle-income household with two young children takes a full-time job pay £24,000 a year, then after childcare costs, direct taxes and reduced benefits and tax credits,  she “takes home just £1,700 of that salary”.

That is equivalent to being paid just 83 pence per hour (for a 40-hour week).  And if that doesn’t blow your policy wonk mind, just take a look at the graph that the Resolution Foundation came up with to ram home this point.


As the Guardian journalist Zoe Williams noted on Twitter, the graph “even looks like a person falling over under unbearable weight”.

So, is £1,700 per year – or £33 per week – really worth the time, effort and anxiety involved in getting the children from home to their childcare provider, and then oneself to work?  And then repeating the exercise, in reverse, at the end of the day?  Five days a week?

No wonder, then, that whilst there are 5.8 million mothers with dependent children in employment  (Labour Force Survey), the UK “lags internationally when it comes to the employment rates of women with young children and particularly single mothers”.  Yet – in the words of the business secretary, Vince Cable – the UK “cannot deal with the economic challenges we face without properly using the talents of women in the workplace”.

Which means government really does have to get to grips with the ‘childcare crunch’ in the Resolution Foundation’s graph.