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7 July 2014
The image of the North East as a stagnant economic area belies the tremendous industry and innovation currently taking place in the region.
The One North East Regional Economic Strategy for 2006 to 2016 identified four key manufacturing areas of strength and key for development over the next 10 to 15 years, namely chemicals and pharmaceuticals; automotive; defence and marine; and food and drink.
Sitting alongside these traditional manufacturing areas were four key service sectors: knowledge-intensive business services; tourism and hospitality; commercial creative; and health and social care.
The ambitious goal of increasing the region's gross value added from 80 per cent to 90 per cent will require a highly skilled workforce.
While having a strong base of existing indigenous skilled workers, the region has seen an influx of workers from the A8 countries (Czech Republic, Estonia, Lithuania, Poland, Hungary, Latvia, Slovakia and Slovenia), which will hopefully supplement this process.
Officially there are now approximately 40,000 Eastern Europeans working in the North East, roughly the same as the population of a small town such as Hartlepool. The true figure is possibly higher.
Suffice it to say that the influx of new labour is raising new challenges and opportunities for North East business. There is concern among trade unions that the A8 workforce has been and could be further exploited.
It can be an easy option for employers to fall into the trap of treating A8 labour less favourably than the indigenous workforce. This could lead to problems in relation to breaches of race discrimination legislation, the national minimum wage, and health and safety provisions including the provisions of the Working Time Regulations 1998.
On a positive note, North East businesses have recognised that A8 workers can meet their staffing needs. One such example is the Hartlepool company F J Pearts. It was experiencing a shortage of welders to undertake work to make metal gates. The company brought in Lithuanians to fill the jobs.
In November 2005 Argos officially opened its third regional distribution centre in Darlington, serving the North of England, Scotland and Northern Ireland. The site is managed by a supply chain management company DHL Excel.
English classes have been offered to the high contingent of Polish employees to help them improve their communication skills. The aim is to ensure that the workers have the level of communication skills required to enable them to progress onto the National Vocational Qualifications 2 in their appropriate area.
Unfortunately, there are also signs that less scrupulous employers are taking unfair advantage of A8 workers.
A report funded by the Trades Union Congress on North East business found that a significant percentage of A8 workers believed that: they were treated with very little respect; there was little concern for their health and safety; a number of basic legalities were not abided by (for example, lack of wage slips, contracts of employment and wages paid in full); and the threat of violence was never far from the surface.
Local trade unions have undertaken projects to engage with A8 workers. Some positive examples include one company allowing the union to have the right to inspect any accommodation provided by the recruitment agency. Other examples include work with local bus companies.
A workplace representative of one explained that the company had entered into discussions with the union at boardroom level before they employed any Polish workers. This allowed the unions to stress that they were not against this move, as long as people received the same terms and conditions as UK nationals.
Knowing their rights
One of the main problems will be that A8 workers will not be aware of their rights under national minimum wage legislation and, therefore, will be receiving lower hourly returns. There is the danger of employers using this as a bargaining tool with indigenous workers to negotiate down their wage levels and expectations.
The traditional image of A8 workers is that they are willing or work long hours and may often have two to three jobs. This can cause a number of problems under health and safety legislation, whereby a worker could be coming on the premises who is seriously tired after performing, say, eight or nine hours at another employer and then be performing other tasks on a night shift.
Employers need to be aware of potential breaches of health and safety legislation and, in particular, ensuring that the provisions of the Working Time Regulations 1998 are adhered to in relation to rest breaks. It is too easy for an employer to say it is not their responsibility when they are aware that employees are working elsewhere and, indeed, may be fatigued.
Managing existing staff
Best practice is key. Where companies are experiencing an influx of such workers it is imperative that: current staff are reminded of the main principles of equal opportunities legislation and, in particular, not to discriminate on the grounds of someone's race or indeed religion or philosophical belief; training programmes should be run for senior managers or line managers so that this message can be disseminated to the workforce; and established staff should be reminded that any breaches of equal opportunities policies can lead to disciplinary action with the ultimate sanction of dismissal being open to the employer.
All employees should receive a statement of main terms and particulars in accordance with statute; in the event that there is to be an opt-out of the Working Time Regulations 1998 then ideally this should be in the A8 worker's language and English; and wage slips should always be provided showing wages at or above current national minimum wage limits.
Companies may also find it beneficial to ask for an interpreter to explain the main provisions of the contract and the work that is to be performed. In particular, employers should be careful to ensure that if new labour workers are operating machinery that they are fully aware of all instructions and manuals pertaining to the use of such machinery.
Regular checks should be taken to ensure that the workers are not experiencing excessive fatigue or tiredness that will prevent them from adequately performing their contractual duties.
As the North East moves away from its traditional industrial base, it is building the parameters for further growth and development. By positively harnessing the skills of the new labour workforce, the North East business community will be well placed to afford this new important labour force a settled and prosperous future.
David Gibson is an employment partner at Crutes