Public and Commercial Services Union

The Public and Commercial Services Union (PCS) represents 300,000 members predominately in the civil service and related bodies also in the private sector. This includes workers on low pay and includes the NMW Compliance Officers in the HMRC.

PCS recognise the success of the NMW and the real difference this has made to workers in the lowest paid sectors of the workforce. We also note the impact this has had on the gender pay gap in the UK and recognise the role this plays in lifting children out of poverty.

Rates

Whilst negotiating for salaried staff, PCS have been keen to ensure that the minimum wage underpins starting salaries in the public sector. PCS Conference acknowledges that the rate currently is still at a level that means many recipients will be relying on tax credits and in-work benefits.

 In debates and motions from the past few years we have clear policy. The rate agreed as reasonable at conference was £8.25ph roughly two thirds of the national average pay. The current adult rate is £5.73 per hour going up 7pence on 1 October. Just the price of a glossy magazine.

The PCS endorse the TUC view that increases must be set above the growth in earnings and inflation to bring it up to a reasonable level. The extra spending this would produce could only help long term recovery of the economy.

Economic growth is due to return in 2010 and a decent increase could be absorbed by employers. The UK even in recession is a wealthy nation compared to many and a decent minimum wage is a step towards a fairer just society.

Employers need to pay for work done rather than rely on subsidy by the tax payer through tax credits to run their business. The NMW has now fallen behind others in Europe the French equivalent, SMIC, increased to 8.82 Euros on 1 July 2009.

Low Pay Commission

The Low Pay Commission process is still a good method of determining recommendations on the future of the national minimum wage. In a recent BBC radio programme on the history of the national minimum wage it was clear that the Commission’s role is vital in ensuring a non partisan approach is maintained.

Compliance

National minimum wage compliance officers are represented by PCS in the HMRC. They have issues around resources to do their jobs and protect low paid workers.

Funding increased in 2007 and this has lead to an increase in the number of penalty notices issued by a factor of 21.

However, the funding for enforcement should be increased and actual prosecutions would send a stronger message to employers who try to evade the law. Compliance teams tell us they are only ‘scratching the surface’ of parts of the economy where workers are afraid or unable to complain.

PCS strongly opposed the outsourcing of the NMW helpline to a private company, by separating this from the public sector body that enforces the law it sent a signal that the government itself did not see the helpline as integral to its enforcement team. Holiday pay queries are not able to be processed as the helpline workers have no clear agency for prosecution.

In the recent review of penalties and treatment of arrears in NMW cases some complex arrangements were proposed, which may add to the workload of the HMRC Compliance officers.

There is a possibility that HMRC's strike rate and arrears found are dropping under the Employment Act 2008. This is not because fewer employers are underpaying; it is because of the increased bureaucracy of having to make a formal order in every case.

The Employment Act

This envisages a penalty being charged in every case, and this in turn means a formal notice of underpayment must be made. Previously most arrears were agreed informally between HMRC and the employer, with less than 5% of underpaying employers getting a formal Enforcement Notice.

While we welcome more employers being charged penalties we are concerned that employers may now be getting away with paying less than NMW when previously they would have enteredinto an agreement to pay arrears.

HMRC solicitors are often unwilling to allow notices of underpayment (which they would have to defend in courts and tribunals) to be made, unless a reliable worker witness is willing to give evidence in court, but such witnesses are often not available in cases involving vulnerable workers.

A notice of underpayment cannot be made unless the exact number of hours worked by the employee in each pay period is known and this information is sometimes lacking.

We are afraid that the increased bureaucracy of the new arrangements is exerting a downward pressure on results; not any improved behaviour by employers.

Formal notices mean that employers who employ workers illegally can never be made to pay arrears to those workers because employment tribunals will not enforce arrears in what they consider to be illegal contracts. While such
workers might have been included in an all embracing informal settlement
they are excluded from a formal notice.

More funding would enable better policing of the NMW in particular in regard to the NMW and holiday pay and would encourage closer multi-agency co-operation in the cases of vulnerable workers. This would enable Compliance Officers to focus on rouge employers who may dismiss or victimise workers who have sought to assert their rights and misuse exemptions on ‘Interns or work experience’.
Supporting low paid workers needs to be put before the cost cutting agenda.

Apprentices

A new apprentice rate should be as high as possible, why not as much as
non-apprentices in the same age range?

PCS are not convinced it should be any lower that the appropriate rate of NMW for the apprentice's age.

Very low apprentice pay is usually offered in trades such as hairdressing which mainly employ female workers.

Often someone might work on Saturdays or in the summer after leaving school for £3.57 per hour, but after they are successful in getting an apprenticeship and take on much more responsible work find that their pay plummets to £2.50 per hour or less.