Nursery Day Care Staff being forced into False Self-Employment to save the boss money

Last Sunday (6th April) the government made agency tax changes following from concerns raised during the consultation on “onshore employment intermediaries: false self-employment”. It is supposed to clarify the law on self-employment and payroll companies. For some time now employers have been avoiding tax and causing problems for their workforce by the scam of telling their employees that they are actually self-employed. This practice is becoming common among nursery care work. I work at a care centre for children in West London that is doing this. What follows are some of the details of the situation and what a number of us are trying to do about it.

Working in a Nursery, some thoughts

I began working for a nursery chain, Monkey Puzzle, with the intention of organising at work – the bigger the better for me. I have been a nursery worker (EYFS Practitioner) for nearly two years now and I think I’m beginning to get a good idea of what is upsetting most of my colleagues. Nursery Nurse training in the workplace has reached a very low standard, the apprentices on £2.68 an hour and working 45 hours a week can testify to that. Nurseries are notoriously expensive and force many parents to reach out to extended family members to help with costs and care, including ‘informal’ childcare i.e. Nanny sharing.

Monkey Puzzle West Kensington has a child capacity of 85 and charges a full day at £75; If and when capacity is reached the company will turnover almost £1.2m a year. Most employees are paid the current legal minimum of £6.31 which is set to increase in October to £6.50 (that’s the 21+ adult rate). Monkey Puzzle has about 17 members of staff and is experiencing a rapid turnover of temporary agency workers. It’s important to note that nurseries do have a high turnover of staff.

Ofsted constantly change the ‘rules’ increasing the workload of the employees by giving us more folder work, child development checks, etc., and generating rising levels of tension between manager and employee.

To counter the low pay, some colleagues discuss the idea of nannying. This seems like an option which would allow us trapped in Child Care to escape the poor conditions and low wages while remaining relevant to Childcare. But an alternate should be posed, one of collective bargaining with the bosses.

Employee, worker or self-employed?

Right now the company is attempting to force its employees to change employment status to self-employed. We have been told this is a ‘new system’ which will benefit us greatly by: claiming expenses back on travel, meals and training. This is done through the companies pay portal. Many of us are refusing to accept this change. The manager is trying to force us to sign the new agreement by threatening to deduct pay. I haven’t had the time yet to calculate how much we would lose with this new system but with no holiday pay, sick pay, and bank holidays the company will be saving money.

The argument I have put to some colleagues is that “there is clearly a mutual obligation to undertake work, and an obligation of personal service (many in childcare will be familiar with what a ‘Key Person’ is) without substitution”. However the contract now states that “the childcarer may use a substitute”, This would be the equivalent of a self-employed plumber taking on a job of fixing a boiler in a ground floor flat and instead of Kevin turning up, Harry does – no so-called ‘personal service’ is required. I want to ask: is that what is to be expected of Childcare? Let’s not forget that the company, in reality exercises a high degree of control over the work we do, It’s simply nonsense to imply otherwise.

Certainly the system doesn’t look as if it is being driven by the high costs of labour. We can measure the income of a Nursery by looking at the fees parent(s) pay. An ordinary business’ income will generally spend 60% of its turnover on staff. This is normal. In Childcare when you divide the days with the cost and the low pay it can be roughly calculated that only 15% of the income goes to staffing cost such as wages. I will look into this further.

Being bold

The statement from UNITE the union states that “anyone subject to significant control, supervision or direction in relation to their work should be deemed to be employed for tax and employment rights purposes”. The union backing is very important: I’ll certainly contact my Regional Industrial Officer to get some support. I’ll ask them to come down and speak with us.

I’m talking with two militant workers. They are not signing the agreement, they don’t trust it.One has been keeping a diary of her dealings with the manager and other senior members of staff. So organising against false self-employment is a bold start which can lead onto a campaign over say, the London Living Wage. It’s a possibility.

I think the way forward is:

1. To distribute to colleagues the UNITE statement which can be found in this report.

2. Discuss with a small majority of the workforce, who may support the campaign to get involved with the Union.

3. To have a moment when we stop work and march into the manager’s office en masse and stay there (i.e. not working) till the manager agrees to take us on as employees and not self-employed contractors.

4. To phone the RIO to send an official to the Nursery with union forms, which I already have, and a blank recognition template.

5. To use the staff room to place up leaflets on the notice board explaining the arguments, etc.

Useful links

· https://www.gov.uk/government/consultations/onshore-employment-intermediaries-false-self-employment

· http://www.unitetheunion.org/how-we-help/list-of-sectors/construction/constructionnews/new-government-measures-on-false-self-employment/

· /2014/04/04/sparks-stage-lightning-strike-at-three-bridges-and-win/

· http://www.ucatt.org.uk/false-self-employment

· http://siteworker.blogspot.co.uk/2014/04/agency-electricians-stage-walk-out.html

· http://www.accountingweb.co.uk/article/new-guidance-changes-agency-tax-rules/553609

PAY PORTAL AGREEMENT. MUST READ https://www.dropbox.com/sh/bsei1l6pln3fvqt/MMUxIgBHg1