UK Minimum Wage "Manifestly Unfair"

The Council of Europe's Committee of Social Rights has published an assessment on its 47 member states' progress on the European Social Charter, which was initially signed by ten founding members in 1961. This commits signatories to providing various social and legal protections, such as health, housing, recourse to the law and employment rights.

The conclusions the report makes on employment in the UK makes grim reading for workers and trade unionists. Here are the lowlights.

On annual holiday with pay: "The Committee concludes that the situation in United Kingdom is not in conformity with ... the Charter on the ground that workers who fall ill or are injured during their holiday are not entitled to take the days lost at another time."

On weekly rest period: "The Committee concludes that the situation in the United Kingdom is not in conformity with ... the Charter on the grounds that there are inadequate safeguards to prevent that workers may work for more than twelve consecutive days without a rest period."

On increased remuneration for overtime worked: "The Committee concludes that the situation in the United Kingdom is not in conformity with ... the Charter on the grounds that workers do not have adequate legal guarantees ensuring them increased remuneration for overtime."

On trade union activities: "The Committee concludes that the situation in the United Kingdom is not in conformity with ... the Charter on the ground that Section 15 of the Trade Union and Labour Relations (Consolidation) Act 1992, which makes unlawful for a trade union to indemnify an individual union member for a penalty imposed for an offence or contempt of court, and Section 65 of this Act, which severely restricts the grounds on which a trade union may lawfully discipline members, represent unjustified incursions into the autonomy of trade unions."

On the right to take collective action: "The Committee concludes that the situation in the United Kingdom is not in conformity with ... the Charter on the following grounds:
 the scope for workers to defend their interests through lawful collective action is excessively circumscribed;
 the requirement to give notice to an employer of a ballot on industrial action, in addition to the strike notice that must be issued before taking action, is excessive;
 the protection of workers against dismissal when taking industrial action is insufficient."

Perhaps most damning is the committee's conclusions on "the most successful policy of the last 30 years", the minimum wage. It's worth quoting this section of the report verbatim:

"Paragraph 1 - Decent remuneration
The Committee takes note of the information contained in the report submitted by the United Kingdom. In its previous conclusion the Committee held that the situation was not in conformity with Article 4§1 of the Charter on the ground that the minimum wage fell far below the threshold of 60% of the average wage.

It now notes from the report that in 2008 the adult rate of the UK National Minimum Wage (NMW) amounted to £5.73 (€6.90) gross per hour. According to the report the NMW has increased substantially faster than both average earnings and prices, especially since 2001. Since it was introduced in 1999, it has risen by around 59% up to October 2008. The Government takes advice on NMW rates from the independent LowPay Commission. The aim when setting the rates is to help the low paid through an increased minimum wage, while making sure that no damage is done for their employment prospects by setting these rates too high.

As regards the minimum wage as a per cent of median earnings (the so called NMW bite), the Committee observes from the report that it is higher in low paid sectors such as hotels and restaurants, cleaning, hairdressing etc. On average, in all sectors it represented around 50% of the median wage in 2008. The report also describes the system of tax credits which aims at achieving fairness combined with flexibility in the labour market. The Committee observes that when combining the NMW with tax credits, a single person in October 2009 earned £197 (€237) per week.

The report does not provide information on the average wage. The Committee notes from Eurostat that the average gross annual earnings in industry and services in 2007 amounted to € 46,050. The Committee notes from OECD2 that the minimum relative to average wage of full-time workers represented 46%.

Taking all elements at its disposal into account, the Committee still considers that the situation is not in conformity with the Charter. Despite a number of efforts aimed at improving the overall situation of minimum wage earners, and notwithstanding the fact that the pound value of the minimum wage has gone up during the reference period, this wage remains low and cannot be considered fair in the meaning of the Charter.

Conclusion
The Committee concludes that the situation in United Kingdom is not in conformity with ... the Charter on the ground that the minimum wage is *manifestly unfair* [my emphasis]"

You can read the full UK report here.

Shamefully, the UK was one of the ten founding signatories of the social charter. Some progress.

(H/T Stronger Unions on Twitter)