With 7.1 million workers engaged in ‘precarious’ employment and 77 per cent of the self-employed living in poverty, the report ‘Working Together: Trade Union and Co-operative Innovations for Precarious Work’ calls for increased protection for those operating in the so-called gig economy.  

“Not only do they have almost no security, but while the average employed worker is losing out year by year in real terms, the self-employed are doing even worse, earning less each year in cash terms,” said co-author Alex Bird. “1.7 million of those in precarious employment are earning less than the national minimum wage, with no real enforcement of the law, and the self-employed are not even covered by the existing legislation.”

There are solutions according to Working Together. The report, commissioned by Co-operatives UK and The Co-operative College, and supported by the Network for Social Change, Wales Co-operative Centre and the Institute for Solidarity Economics, identifies ‘co-operative solutions’ as well as partnerships with trade unions as a way of ensuring a fair deal for workers in an expanding gig economy.

It calls for the UK to replicate the ‘umbrella co-operative model’ for supporting freelancers and other precarious workers and points to Belgium-based SMart. The non-profit organisation enables precarious workers operating in the arts sector to obtain a range of welfare benefits – including unemployment benefit.

SMart also provides its 70,000 plus members with tax support and advice. Sarah de Heusch Ribassin, Project Officer for the Development Strategy Unit at Smart, said:

“Many of those who were self-employed found the legislation around taxes to be so complex and were afraid to do things wrong. SMart offered an alternative that meant they no longer had to worry about making errors that would affect their income.”

Working Together also identifies Indycube as a blueprint for how partnerships between trade union and co-operatives can flourish. Indycube is a rapidly growing network for freelancers and the self-employed and offers access to workspace in more than 30 locations, predominantly across Wales.

The not-for-profit co-operative works with the trade union Community to offer a range of benefits including advice on tax, insurance, pensions and employment law.

Mark Hooper, Founder of Indycube, sums up how the relationship with Community has developed. He said:

“We see this as the way to grow with Community’s resources, capacity and knowledge, and the plan provides an opportunity for third party representation of our self-employed members.

“On a practical level, freelancers often find themselves presented with complex contracts full of legal jargon, which can result in problematic agreements and issues with payment.

“Community’s legal team are able to advise on these sorts of documents which many independent workers wouldn’t otherwise be able to access. Likewise, Invoice Factoring is a service which is generally only available to bigger companies and organisations, but banding independent workers’ voices together and working in partnership with Community has allowed Indycube to secure access to Invoice Factoring services, effectively putting an end to late payments for our members.

“Fifty-one per cent of invoices are paid late, a figure we think is far too high, and Community’s support has enabled us to make progress in this area. Thanks to Community’s status as an established union, Indycube has been able to cement itself in the minds of policy-makers and others as a voice for the fast-growing group of independent workers.

“The more members we have, the stronger our collective voice, and the more work we can all do to make our futures better.”

Les Bayliss, National Officer and Head of Special Projects for Community, said: “Our partnership with Indycube is one of a number of newly developed initiatives where, as a trade union, we are reaching out to new workers in today’s world of work.

“We will continue to listen to and understand what they need from a trade union, providing support, representation, mediation and settlement. Working together we hope to develop a ‘one voice’ approach to the needs of self-employed, freelance workers, speaking out and campaigning on the issues that affect them most.

“As a trade union we will continue to learn from our new initiatives and our new members, building new alliances with others in the private, co-operative and not for profit sectors. We will reach out to workers by being relevant to them and their needs.”

The rise in the gig economy means businesses, trade unions and government must do more to protect workers according to Ed Mayo, secretary general of Co-operatives UK, the trade body that works to promote develop and unite co-operative enterprises. He said:

“The number of zero hours workers has increased by over 800,000 within the past decade. Some 77% of self-employed workers are living in poverty…

“These are incredible numbers. With increased precariousness comes the need for increased protection and support and we know that co-operatives and trade unions can be part of the solution to this growing need.”

Cilla Ross, Co-operative College Vice Principal and co-author of the report said,

“The experience of growing numbers of workers in education, from teachers in the compulsory (pre-16) sector through to further, higher and adult education, is one of casualisation and precarity. This report pulls together examples of how unions and co-ops are successfully working together and offers real solutions on how precarious work can be challenged.”

The full Working Together report can be viewed and downloaded here.

Additional Notes 

The Working Together report profiles a number of examples where trade unions and co-operatives are working together including:

Musicians Union (MU) and Musicians co-ops: Local Authority music service closure in 1998 led to the launch of Swindon Music Co-operative. The MU was an active supporter of the co-operative which is now the main provider of instrumental and vocal tuition in over 70 local schools. The co-op and trade union partnership has set up seven other musicians’ co-ops across England and Wales.

Actor Co-ops: There are 30 actors’ co-ops in England and Wales. Their development and success has been through a close working partnership over many years with the actors union, Equity. The partnership has secured workers’ rights through negotiated industry agreements.

Community Lives Consortium: This social care organisation has operated as a co-op since 2001. It provides housing and social care services for severely disabled adults in Swansea, Neath and Port Talbot. Unison has supported the development of the co-operative since 2001 and has a place on the board of directors.

Key findings and recommendations in the report include:

• Co-operative sector share of GDP is 2% in the UK while in Italy and other EU countries it is over 10%. There are only 474 worker co-ops in the UK versus over 23,000 worker and social co-ops in Italy where public policy support (including tax reliefs) and legislative changes in 1985 and 1991 have been transformative.
• A wider partnership with local authorities can make a real difference. Cities in the US are supporting programmes to establish an eco-system of support for co-operative development including legal and technical advice as well as enabling finance. Local government partnerships in Italy have assisted the significant growth of social co-operatives in the fields of social care and jobs for disadvantaged groups in the labour market.
• Platform co-operatives co-developed by trade unions and worker co-ops are emerging in the USA as an alternative to Uber. Other trade unions in the USA are working on Union Co-op platform solutions for childminders and district nurses. Union Co-op solutions like this are needed in the UK.
• Mutual guarantee societies were developed in Italy and considerably reduce the cost of development finance for co-operatives. 19 EU countries have adopted this innovation and the UK should do the same.
• Universal Basic Income could be introduced in the UK in tax neutral ways that would significantly benefit those in precarious work. Trade union interest in this reform is growing as an alternative to the widespread problems with Universal Credit.

About The Co-operative College, Co-operatives UK and Wales Co-operative Centre

The Co-operative College is an educational charity and has been a leading provider of education, training and research for the co-operative sector since 1919. As a membership based organisation, we work across the UK and internationally to promote co-operative values, ideas,  principles and practices. www.co-op.ac.uk

Wales Co-operative Centre is a co-operative development agency, working across Wales to promote social, financial and digital inclusion through a range of projects. For further information visit http://wales.coop.

Co-operatives UK is the network for Britain’s thousands of co-operatives. Together we work to promote, develop and unite member-owned businesses across the economy. From high street retailers to community owned pubs, fan owned football clubs to farmer controlled businesses, co-operatives are everywhere and together they are worth £37 billion to the British economy. www.uk.coop

For further information, please contact:

Dominic Mills:

Tel: 0161 2141767

Email: [email protected]

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Both off-line and online ‘on demand’ work is escalating – including a 10-fold increase in zero-hours contract work since 2006. There are 4.8 million self-employed (15 per cent of the workforce). Self-employment is also a pre-condition for gig economy jobs. Not surprisingly the growth of freelancing has expanded in a decade by over 1 million and two in three new jobs in the UK are being created by the self-employed. Jobs with limited rights are becoming the new normal.

The brave new world of on-demand work operates with no guaranteed hours, workplace or rates of pay and with risks and costs shifted from capital to labour. The median income for freelance workers and those on zero-hour contracts is 40 percent below the median of those in traditional employment. 77 per cent of the self-employed are in poverty with 1.7 million earning less than the national minimum wage.

As an expanding army of labour the self-employed will surpass the number of public sector workers during 2018. Crowd-sourced labour corporations are spreading to all services sectors, including: Deliveroo, Hermes and CitySprint for deliveries; MyBuilder and Handy for repairs, cleaning and gardening; TaskRabbit for odd jobs; Clickworker for office work; TeacherIn for supply teachers; SuperCarers for social care; and UpWork for higher skilled freelancers.

The profitability of the gig economy model is intrinsic to a design that saves 30% on labour cost overheads plus further savings on equipment, debt collection and insurance. Double standards are evident. Deliveroo in Germany and the Netherlands employs its riders and provides tools of the trade while UK riders have no such protection, provide their own bikes and are charged £150 for the company kit. Legal cases by UK trade unions challenging false self-employment by Uber, Deliveroo, CitySprint and others have secured ‘worker rights’ (including the minimum wage, holiday pay and sickness benefits) but the court decisions are subject to appeal.

Disruptive technology is ‘hollowing out’ corporations by eradicating conventional jobs and substituting casualised ones. Consequently the squeeze on real wages is greater today than any time since 1850. Between 2009 and 2015 the labour share of national income fell from 57 to 53 percent with a corresponding 4 percent increase to capital.

The mutual aid pushback historically by trade unions and co-ops against the unrestrained free market in the 1840s led to social justice solutions. A similar push back is kicking off today. Key innovations profiled include:

1. Freelance co-operatives have emerged in Europe in trades where self-employment is the norm. A good example is the network of 30 local actors co-ops in England and Wales. They collectively negotiate, manage and renew work contracts. Moreover they provide services complementary to the trade union bargaining services of Equity for the same members. Similarly there are 9 local Musicians co-ops in England and Wales that work collaboratively with the Musicians Union. A new co-op for educational psychologists has been set up backed by their trade union. There is enormous scope for more joint trade union and co-op partnerships like these and especially with the current growth in new freelance co-ops in the UK for tech workers, filmmakers, translators, interpreters, bakers and in many creative industries.

2. Business and employment co-operatives developed in France and Belgium during the 1990s. They provide a wide range of services that secure ‘worker rights’. Smart in Belgium with over 70,000 members is a good example. It handles for freelance members their invoicing and debt collection in ways that smooths out cash flow through guaranteed payment within seven days. Smart secures decent work by providing workspace, ongoing vocational education, equipment rentals and by managing social security arrangements to access benefit entitlements. Indycube a co-operative provider of workspace with more than 30 locations in England and Wales has formed a partnership with Community Union to develop a Smart solution for the UK. Smart co-ops have already been developed in seven other EU countries.

3. Social co-operatives developed first in Italy from the 1970s and operate in the fields of social care, community and public health, education and in the creation of employment for disadvantaged groups. In Italy they are supported by a national trade union agreement and provide services for over 5 million people with an annual turnover of more than €9 billion. The model has been developed in Canada, Japan, France, Spain, Portugal and other EU countries. There are a growing number of social co-operatives in England and Wales including Cartrefi Cymru Co-operative, Community Lives Consortium, the Foster Care Co-operative and CASA.

4. Union Co-op platforms are an emerging strategy aimed at advancing worker ownership and control in service industries. For example, the SEIU public services union in the USA is developing apps and a platform for community nurses and childminders. The CWA union in the USA, for example, has assisted taxi drivers in Denver to set up Union Taxi and Green Taxi co-ops and to become highly successful with their own apps. There is trade union support in the UK for developing apps with the highly successful Taxi co-ops (City Cabs and Central Taxis) in Edinburgh being a good example of partnership with Unite to negotiate rates and license conditions.

Supportive public policy and legislation is crucial for a transformative difference. The USA and the UK have weakly developed workplace co-operatives with less than 500 in each country. Italy by contrast has more than 24,000 worker co-ops and social co-ops that have created more than 827,000 jobs. This transformation was propelled both by legislation in 1985 (for worker co-ops) and 1991 (for social co-ops) and by public-co-op partnerships with local authorities. Italy has also pioneered innovations in co-operative capital funds and mutual guarantee societies that together make low-cost development equity and working capital readily accessible for workplace co-op development.

For a democratic sharing economy that is equitable for both workers and service users, a similar public policy framework is needed in the UK as well as an eco-system of local support including technical assistance, advice and co-operative finance tools. Our report shows how to connect these ways and means and highlights examples of emerging local authority strategic support for economic democracy solutions from New York to Bologna that should be pursued here.

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