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Ethical Procurement and the Living Wage: A Guide for Community Activists Introduction Thisguidecontainssector specificguidanceforUNISON’s CommunityActivists on approaching employersabout ethical procurement, with particular regardto employment issuesfor communitymembers. Theguidereferstoprocurement policies within charities and housing associations, but alsotheprocurement practicesof commissioning bodies with whom communityemployers work. Manyof our membersare providing services via contract relationships with public sector organisations who have issued contractstoprovide services in arangeof areas. This document signpostsour memberstotherelevant documents. UNISON hasalreadyproduced an“ethical procurementguide” for localgovernment members whichfocuseson supplychains andtheprovision of goodsto public sector organisations.This canbefoundhere: https://www.unison.org.uk/content/uploads/2013/06/On-line-Catalogue212793.pdf Procurement andtransfers of services One of the biggest issuesfacing theCommunityservice group isemployment transfers. Over thelast 30 years, manypublic services have been transferredtothe communityand voluntarysector andhousing associations, aswell as tothe private sector. Themajorityof suchtransfersinvolve significant cost-cutting – either immediatelyupon transfer, or over theyears, asthecontract price isreduced. Andontop of cost issues, transfersof employment lead tomoreemployment insecurity, asworkers aretransferredto smaller organisations or those which are lessfinanciallystable. Centralgovernment public spending austeritysince2010 have madetheseissues even more acute. Consequently, transfershave serious implicationsfor UNISON negotiators in our sector, as we seek to defendtransferredmembers’jobs, payand conditions, as well as thoseof workerswho are employed after transfer. UNISON has produced comprehensive guidance on procurement. UNISON reps canmakesignificant interventionsduring thisprocess –whether it is campaigning against thetransfer (if thisis appropriate) or representing andorganising membersthroughthetransfer itself. All of theUNISONguidance on interventions which can bemade during the procurement processcan befoundhere: https://www.unison.org.uk/get-help/knowledge/contracts/procurement/ Building the Living Wage into procurement TheLivingWageis anestimate of theminimumhourlyrate of payneededfor aworker to cover thecoststhat most people would regard asnecessaryfor abasic standard of living. EveryNovember, the LivingWage Foundation announces two newLiving Wagerates- one for London andonefor the rest of the UK. Therates are calculatedbythe Resolution Foundation and arecurrentlyset at £10.20 an hour in Londonand £8.75 an hour acrosstherest of theUK. Unlike thelegallyenforceable National Minimum Wage, whether to paythe LivingWageis a voluntarydecision for anemployer. TheLivingWageformsastepping stone toward UNISON’s wider goal ofachieving minimum payrates of £10an hour across theUK. Our members in Charities and Housing Associations should bargain andcampaignfor a LivingWage within their employers. UNISONhas achieved thesecommitmentsin organisations such asDimensions andTogether.UNISON negotiatorsshould consider insertingthe LivingWage into annualpayclaims(amodel payclaim isavailable under the model agreements section of thispage https://www.unison.org.uk/get-involved/learning- development/activists/negotiating-and-bargaining/) Communityvoluntarysector organisation should operateaccording torobust standards and values, which should include their approachto peopleworking for their organisation. Paying peoplelessthan theLivingWage is a dubious practicewhich should bepointed out tocommunityemployers. Themoralcase against povertywagesshould be made, alongside theassociatedreputational risksto HAs and charities. Such a policyshould include bothdirectlyemployed and contractedout workers, which is also a stipulation of accreditation with theLiving Wage Foundation. Failure todothis can produce aperverseincentive to contract out more services. Further linksto negotiating guidancecan befoundbelow. Living Wage: Commissioningbypublic sector bodies From thepoint of viewof Communitymembers, aLivingWagepolicyat apublic sector commissioning body(or even within a nation, in the case of Scotland) canmakea huge differencetotheterms and conditions of our members. A successful LivingWage campaigncan lock in along term policythat includes theLiving Wage asafactorfor consideration inthetendering process. UNISON’s modelorganisational change policy shows howthe LivingWagecan beincluded as part of aset of “fair work practices” that anycontractor hastooutline its position onas part of submitting atender.The contractor’s position is thenconsideredaspart of the selection processfor awarding thecontract. Public sector employershave takenavarietyof approachesto inserting LivingWage considerations into contract notices when services areput outfor tender. Wherean employer maybereluctanttofollowthis example, theycan, at least, set out a commitment tothegeneral principle of aLivingWageor requiresubmission of a varietyof bids, one of which hastobe basedon payment of theLivingWage. UNISON Communitybranches and CommunityMemberswithin local authorityand health branches will need toform alliancesto pressurisecommissioning bodiesto takean ethical approachtothe LivingWage. You canfindmoretechnical advice and examples of successful campaigns in theexcellent UNISON Bargaining Supportguide which can befound here: https://www.unison.org.uk/content/uploads/2017/11/Bargaining-for-the-Living-Wage- updated-Nov2017.pdf Tofind out moreabout howUNISON has workedtomainstream theLivingWageinto employment practicesinScotland, click here: http://www.unison-scotland.org/2015/02/08/e- briefing-living-wage-procurement/ Procurement andemployment transfers UNISON hasalso producedTUPE BranchGuidance, updated in2014.This document focuseson howUNISONrepsshould work around transfers –before, during and after.The guide isareallyhelpful overviewof thevarious areas you should consider.Toreadthe guide, click here: https://www.unison.org.uk/content/uploads/2014/04/On-line-Catalogue223172.pdf Theperiod immediatelyafter thetransfer is crucial, becausethisis thetime when UNISON might losemembers andstructural andorganisational arrangements we had beforetransfer. So it is vital that you engagewith the new(or potential new) employer prior tothetransfer, about howtheywill interact with theunion after transfer: Branchesshould: 1. Confirm theterms of recognitionsothat newstarters are coveredbytherecognition agreement, notjust transferring staff. 2. Confirm DOCAS(deduction of contributions at source)for UNISON subscriptions, or get member totakeout direct debits. 3. Ensure afacilitytimeagreement in place. 4. Hold regular meetingswithmembers. 5. Discuss with the employer what thearrangements will befor engaging ‘newstarters’ (seethe section ontwo-tier codesbelow) Toooften,following transfer, employers attempt to de-recognise UNISON, or let recognition transfer but make itmeaningless bynotgranting anyfacilitytimefor representatives or setting upanybargaining arrangements. Manyvoluntarysector employers will have little or no experience of working with tradeunions. Thiscan bea problem, but we can alsouse it toour advantage: at anearlystageit is important that we demonstratethe value toan employer of working with aunion. Remember, manyof theseemployers won’t have much human resourcescapacity, soworking with a union maybe helpfultothem. Thesearguments andsuggestions also applywhen members aretransferringfrom one voluntarysector organisation toanother.TUPEClearlythe most important aspect of employment transfers isthe ongoing securityof members’jobs, payandconditions.When voluntarysector organisations take ontransferred staff,theyhave to abide bytheTUPE (transfer of undertakings; protection of employment) regulations. TUPEguaranteesthat transferred staff keeptheir pay, conditions(suchasannual leave, working hours, redundancyrights), andcollective agreementstheyarecovered by– such as tradeunion recognition. Pensions are not protected in thesame way, but the newemployer does have toprovide a pension schemewhich is broadlycomparabletothe onethat the workerswere in before being transferred. There is noset timelimit on howlong employers have to honour their employees’ TUPE rights.TUPE doesnot expire. If an employer wishes tochangetheconditions of TUPEd employees, theymust have what is known as anETO (economic, technical or organisational) reasonfor doing so. Theyhave toconsult with therecognisedtrade union. UNISON’sexperience isthat many voluntarysector organisations arerelativelyuninformedaboutTUPE. Manytrynot toapplyit at thetimeof transfer, byarguing that theywill be providing a newand different service, not the onesameastheoldone; otherstrytochangeit in ways which they’re not allowed to do. In all of these situationsyou should seek advicefrom your UNISON Regional Organiser, as legal advice maywell be needed. Beforethetransfer, it iscrucial that reps clarifyeverything that is contractual and should transfer underTUPE. Don’t assumethat thecurrent employer andthe newemployer will get this right. And don’t assumethat thenewemployer will agreethatTUPE should applyat all (if theyarguethat it should not,findoutfrom them exactlywhynot, andspeak toyour Regional Organiser about getting alegal view). You should also check employment contractsprior tothetransfer toensurethat current terms andconditionsare incorporated into individuals’ employment contractsproperly. Employers often dofindways of getting roundTUPE. For example, inthecurrent severe financial climate, with theimpact theGovernment’s cuts are having onthesector, many employers have madechangestoTUPE conditions (in other words removing TUPErights and putting staff onworse payand conditions) and claimedthat theGovernment cutsgive the employer an ‘ETO’justification.Whenthis claim ismade, you shouldseek legaladvice throughyour UNISONregion –tocheck whether,given all thefacts of thecase, the employer can actuallyget away with this. Two-tierworkforces While staff who aretransferredfrom oneemployer to another receive some protection of their termsand conditions, UNISON haslong been concernedabout the emergenceof two- tier workforces. This isthe situationwhere employers engage‘newstarters’ to work alongsideTUPEd staff, and paythosenewstarters differentterms andconditions –for example lower payrates, less annual leave, inferior sick andmaternity/ paternity arrangements. For several years, workers inthecommunityandvoluntarysector working on public sector contractsreceived someprotectionfrom this, throughthevarious ‘two-tier codes’ which the last government introduced. Thesecodesstatedthat newstartersshould receive payand conditions which were overall no lessfavourable than thetermsandconditions of TUPEd staff.Thecodes were not perfect: manyorganisations were exempt, andthe codes were sometimes difficult toenforce. But theydid offer some protection against a‘racetothe bottom’ in which TUPEdstaff wereremoved sothat employers couldreplace them with cheaper staff. However, the 2010-2015Coalition Government removed thosecodesfor newcontracts, and thismeansthat two-tier (or ‘multi-tier’) workforcesareboundtore-emergein the employers for whom Communityservice groupmembers work. Aswe trytorecruit and organisethose newstarters, it isvital that we campaign and negotiatefor better protectionfor them. In place of thetwo-tier codes, theGovernment has introduced voluntary‘Principles of Good Employment Practice’. Althoughtheseprinciples arenot asstrong asthe two-tier codes, andarenot enforceable, theydo offer UNISON negotiatorsandrepssomeopportunitieswhen engaging with employers. For example, theprinciples statethat employers should consult with recognised tradeunions when deciding what termsandconditions tooffer newstarters. UNISON nationally will continue toarguefor full and proper protection and equityinsuch situations, but inthemeantime, UNISON stewards in Communitymayfindtheseprinciples helpful, whennegotiating with charities, housing associations andsocial enterprisesfor fair treatmentfor newstarters. Outsourcing to such employers is onlygoing toincrease, and without statutoryprotectionfor newstarters, we will need tonegotiatelocallyfor goodpracticeto beimplemented.