Democracy in the Workplace: Newham Compass Tuesday 20 June

Shame this clashes with UNISON National Delegate Conference. I don't think I have met Scott but Janet is a very experienced and thoughtful trade union official and also chairs Trade Union Share Owners. 

Victory for decency at work - Sports Direct will hold an independant review into its employment practices.

In what is also a victory for effective pension stewardship, "workhouse employer" Sports Direct agreed to hold an independent review into its awful working practices and governance.

See TUC press release below

"Trade Union Share Owners welcome Sports Direct announcement on independent review

20 September 2016

Trade Union Share Owners (TUSO) have welcomed the announcement today (Tuesday) by Sports Direct that there will be an independent review of the company’s working practices and corporate governance.

The announcement follows a resolution calling for an independent review that was tabled at the company’s AGM earlier this month by TUSO, and supported by a majority of independent shareholders.

TUSO Chair Janet Williamson said: “This is good news for Sports Direct workers, especially young workers who make up a large part of their staff but too often get a poor deal at work.

“The board should now consult both shareholders and trade unions in finalising the plans for the independent review. Trade unions representing workers at Sports Direct stand ready to work with the company to ensure a successful future that is fair for its staff.”

NOTES TO EDITORS:
- The Trade Union Share Owners (TUSO) is a group of investors representing the financial assets of the labour movement, including the TUC staff pension fund, the Unite staff pension fund, the UNISON staff pension fund, and the International Transport Workers’ Federation.
- All TUC press releases can be found at www.tuc.org.uk"

Hat tip cartoon Kipper Williams, the Guardian

"Sports Direct cannot be allowed to mark their own homework"

Check out the press release below from the TUC about rotten employer "Sports Direct" whose company AGM is tomorrow.

The BBC report here that Sports Direct are desperately trying to pretend that all is ok and they are going to change.

Such human right abuses will always occur when you have employers who refuse to recognise independent trade unions and don't have collective bargaining agreements.

Trade Union recognition is an internationally recognised fundamental legal human right. If any company refuses to recognise trade unions then they are clearly human rights abusers.

Good luck with motion 19 tomorrow at the AGM calling for an independent investigation into the employment practices of Sports Direct. I wish I was there.

"Commenting on a report into Sports Direct’s employment practices by its law firm published today (Tuesday), TUC General Secretary Frances O’Grady said:

“An apology is always a good start, but this is too little, too late. What we really need is an independent investigation, as called for by the trade union resolution at tomorrow’s Sports Direct AGM.

“A report written by a law firm which previously represented Mike Ashley and management simply won’t cut it. Sports Direct cannot be allowed to mark their own homework.

“Cases like this show why the government must act to end the abuse of zero-hours contracts, and get serious on enforcing employment rights.
“
This story is a testament to the tireless work of Unite the union, which has played a key role in revealing abuses at the company.

"I urge shareholders to support the Trade Union Share Owners’ resolution 19 for an independent investigation into employment practices.”

NOTES TO EDITORS: 
- The Trade Union Share Owners group, of which the TUC is a member, is calling on Sports Direct shareholders to support resolution 19 at the AGM, which commissions an independent review of Sports Direct International plc’s human capital management strategy.

 - The Trade Union Share Owners (TUSO) group is a group of investors representing the financial assets of the labour movement, including the TUC staff pension fund, the Unite staff pension fund, the UNISON staff pension fund, and the International Transport Workers’ Federation.

  - The resolution has been filed by investors including the TUC and UNISON staff pension funds, both members of TUSO, and the Borough of Islington Staff Pension Fund and Prospect general fund.

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @The_TUC and follow the TUC press team @tucnews

Sports Direct: Treating workers like dirt is bad for business (and investors)

I was pleased that UK Council leaders are supporting the resolution at the Sports Direct AGM next week for a review of its HR practices.

UNISON staff pension fund have backed this campaign via the TUC organised Trade Union Shareholders Organisation.

 

Both LGPS pension funds I am associated with have instructed their fund managers to vote in favour of motion 19.

 

If a company treats its workers like dirt there is a long term risk to investors. If you have workers collapsing at work since they are too scared to report sick if they are ill and female employees sexually exploited to keep their jobs then there is clearly a dysfunctional employer causing massive legal,  reputational (and moral) risks to any pension or insurance fund that seeks to invest in it.

 

If they do all this to their workforce then what else is going on? Fiddling taxes? Excessive payments to Executives? Faulty accounts? Corrupting public officials? Trashing the environment?

 

LAPFF press release. "Leading shareholder group, the Local Authority Pension Fund Forum (LAPFF), has backed a shareholder resolution at Sports Direct’s Annual General Meeting. The resolution calls for an independent review of Sports Direct International plc’s human capital management strategy and requests a report on the findings of this review to be released to shareholders within six months of the AGM.

 The UNITE union has filed the resolution after extended criticism of Sports Direct’s labour
practices. This criticism includes reports of severe health and safety violations and sexual
abuse at the Company’s Shirebrook facility in Derbyshire, as well as use of so-called ‘zero
hour contracts.’ The labour practice concerns have been coupled with a massive drop in share price over the last year and Sports Direct’s departure from the FTSE 100. Some commentators have alleged that the two issues are related.

According to LAPFF Chairman, Cllr Kieran Quinn, “LAPFF’s view is that responsible business practices by companies lead to sustainable returns for investors over the long-term. We are worried that this view is not shared by Sports Direct.”

In support of the resolution, LAPFF has produced a proxy advisory briefing which has been
distributed to its Member Funds. This briefing expresses concern that although Executive
Chairman and controlling shareholder, Mike Ashley, has committed to conducting a workplace review himself, this review would not be independent. LAPFF is further concerned that Sports Direct’s promise to have its lawyers, RPC, issue a summary of Mr Ashley’s report would just rubber stamp the Company’s version of affairs.

A Trade Union Share Owners statement has said: “The [C]ompany’s proposed review outlined in its explanatory note on its opposition to resolution 19 is to be carried out by an organisation that is not independent of Sports Direct and lacks relevant expertise in employment and industrial relations practice.”

Cllr Quinn stated, “LAPFF’s hope is that an independent human capital strategy review will
rectify any workplace practices deemed inappropriate and will help Sports Direct to move
forward from the reputational and financial damage it has suffered.”

The Sports Direct AGM takes place at its controversial Shirebrook facility on 7 September.

Sports Direct: The Evil Workhouse: Union shareholders call for independent review of the inhuman employment practices at AGM

"The Trade Union Share Owners group (TUSO) has submitted a resolution to the Sports Direct AGM calling for an independent review of their widely criticised employment practices, which have led MPs to compare the company to a ‘Victorian workhouse’.

Details of the resolution were published today (Friday) in the company’s AGM notice. In the explanatory notes, the Sports Direct board recommends that its shareholders vote against the resolution, stating that it has asked its law firm RPC to compile a Working Practices Report.

Frances O’Grady, General Secretary of TUSO coalition member the TUC, said: “It is bitterly disappointing that the board of Sports Direct has declined to back the resolution. The board’s backing would have sent out a clear public message of reassurance to shareholders that it is serious about addressing deep-seated problems with its employment practices.

“We do not have confidence in the independence of any review led by Sports Direct’s own legal firm. And many of the shareholders we have spoken to share our view of the importance of a fully independent review as the only way to make sure that in future Sports Direct delivers fairness for staff, and decent returns for shareholders.

“We hope that asset managers invested in Sports Direct, who manage the capital of working people, will give the board a clear signal that change is needed by voting for the resolution. And we encourage the management of Sports Direct to continue constructive dialogue with the trade union Unite to improve conditions and respect for staff.”

NOTES TO EDITORS:

- TUSO is a coalition of trade union funds (comprising the TUC, Unite, UNISON and the International Transport Workers Federation) with over £1.5bn assets on the capital markets, including shareholdings in Sports Direct.

- Resolution 19 to the Sports Direct AGM states: “That the board commissions an independent review of Sports Direct International plc’s human capital management strategy and report back to shareholders within six months.” Full explanatory notes along with the board’s full reasons for recommending rejection of the resolution are in the AGM notice for 2016 which can be downloaded from here: www.sportsdirectplc.com/media-centre/press-kit.aspx

- Sports Direct was heavily criticised in a report by the Business Innovation and Skills select committee that was published on 22 July 2016. For more information visit: www.parliament.uk/business/committees/committees-a-z/commons-select/business-innovation-and-skills/news-parliament-2015/working-practices-at-sports-direct-report-published-16-17/

- Sports Direct is currently the subject of an investigation by HMRC into its failures to pay the minimum wage to some staff.

 

Hat tip TUC Website

"Sports Direct" 21st Century Workhouse employer & unacceptable face of capitalism

The press has been full of headlines about vile UK retailer "Sports Direct" as being a "workhouse employer" who treats its workers like dirt.

Where women give birth in its toilets and fleets of "999" ambulances have to be sent out to aid workers who are too frightened to report sick. Never mind those forced to give "sexual favours" to managers to keep their jobs.

Check out this post by Tom P arguing that "Sports Direct" is not only a rotten employer but an economic basket case and risk to those pension and insurance funds that invest in it.

Following the collapse of the share price, investors need to get a grip on the company and its complete lack of governance. Inhumane treatment of its workforce is not only morally wrong but hits the bottom line.

I am really proud of the role of Trade Union Share Owners (TUSO) in helping to bang the drum on this issue. Companies that are human right abusers are also in the long term just bad investments.

 

Workers' Capital in the 21st Century: ShareAction Annual Lecture with Sharan Burrow

The keynote speaker at this years ShareAction annual lecture in the historic Conway Hall, Red Lion Square, London was the General Secretary of the International Trade Union Confederation, Sharan Burrow.  The ITUC is the global version of the British TUC.

Sharan give a well argued and passionate speech on "Workers Capital" (the pension investments and other savings of workers) and in favour of using it to support climate transition while respecting fossil fuel workers and their contribution to our prosperity.

She repeated her mantra that I first heard her say at the recent CWC meeting last month "there are no jobs in a dead planet".  While she welcomed the green "disinvestment warriors" present who would want pension funds to immediately pull out of investing in Carbon industries such as Coal and Oil, she did favour engagement with firms if they are willing to take part in transition. Some will earn our trust.

              

If companies refuse to change then we do have the powerful leverage of disinvestment by our pension funds. We are close to losing the Climate Change War and must act if our politicians fail to regulate.

Sharan praised the TUC for setting up "Trade Union Share Owners" where trade union staff pension funds collectively vote their share holding and she hoped other national unions would do the same. Also ShareAction for its success in furthering the Living Wage.  She thought that the election of Jeremy Corbyn as Labour Party leader was a great symbol of the possible. 

                         

Her closing remarks was the battle cry "Zero Carbon, Zero Poverty".

Next Speaker was Gail Cartmail from Unite, who spoke about role that unions can play by representing the interests of their members investments, Colin Meech from UNISON who talked about the need to control costs of our pension funds like they do in Holland, while Jeannie Drake reflected that many workers do not have unions in their workplace and have contract not trust based pensions, so how do we leverage their capital?

There was then a Q&A during which Green Party leader, Natalie Bennett, asks whether there are civil Liberty groups present today and can we work together? I tried to ask a question but wasn't called on how trades unions generally will have to raise their game and give practical support and guidance to pension trustees if we want them to pursue a progressive agenda on climate change.                             

Catherine Howarth from ShareAction closed this successful event with a call for a legally binding "Charter of Rights" for investors and owners. 

Workers' Capital Conference 2015 (Day 2)

This is a little late. I have posted here and linked here on the first day of this global annual conference for trade union pension trustees and organisers that took place earlier this month.

(On my https://twitter.com/grayee account I tweeted on the presentations and speeches which I have now used to write this post).

The day was started by a welcome speech from Toni Heerts (FNV) Committee Workers Capital Chair & Co-Chair Paddy Crumlin (ITF). 

The 1st plenary was on "Embedding pro-labour practises & policies for responsible investment". Willem Noordman from the Dutch Pension Federation recognised that engineering unions would have a different view of arms production than others but all unions have plenty in common. There is a real dilemma that if we disinvest from a company because we don't like their practises that we lose all influence over them.

Tom Croft, from the USA Steel Valley Authority in Pittsburgh pointed out that the "S" in "ESG" principles (Environmental, Social and Governance) is too often forgotten.

Pension trustee and national officer, John Neil, from Unite spoke about the Trade Union Shareholders Organisation (TUSO) in the UK. Trade union staff pension funds in the TUC, UNISON, Unite and the ITF combine collectively to make sure that all the shares they own are voted in the interests of "pro-labour" at company AGMs (such as the rogue UK company "Sports Direct" the following day)

A number of international speakers mentioned TUSO at the conference and that they hoped that something similar would be set up in their countries.

I asked the question is there evidence collated of "pro-labour" companies that have proved to be long term good investments that we can show our trustee Boards? Tom Croft responded that in the USA there are certain Private Equity companies that have humanely restructured firms & saved jobs.

Next Janet Williamson from the TUC chaired a panel on 2022 World Cup construction deaths in Qatar.  Gemma Swart from the ITUC spoke about the modern day slave camps in Qatar and that investor pressure over reputational risk can bring about change since the whole country is essentially a family business.

Roel Nieuwenkamp from OECD pointed out that they have introduced binding guidelines on contractors including supply chains with a grievance procedure. "Soft law with hard consequences". He used an example of a complaint by a NGO against Formula1 over human rights in Bahrain and there could be a similar one against Fifa over Qatar.

Hugues Letourneau  from CWC on their human/labour rights campaign in Qatar points out that there has been 279 Indian migrants deaths so far. They are putting pressure on UK and French construction firms via "investor letters".

Cllr Richard Greening from LAPFF  spoke about their engagement with companies exposed in media working in Qatar at AGMs & face-to-face meetings.

(after this session I had to go to a work meeting and missed the debate on infrastructure investment which I understand was pretty heated at times. Some delegates believed that such investment was being misused to privatise public services)

I came back to hear Nick Robins from UNPRI enquiry on the "Design of a Sustainable Financial System".  He believed that there was evidence of a "quiet revolution" in Green investment despite agreeing the Governor of the Bank of England that there was a "tragedy of horizons".

Then 'Labour Standards in Sustainability Rating: How well they incorporated?' Chaired by Elizabeth Umla.

John Jarrett from "FTSE for good" index explained how they did their ESG research and how core Labour standards from all companies are assessed including the supply chain.  Antti Savilaakso from MSCI admitted they have a somewhat similar method to FTSE. They have 130 analysis serving 900 clients. Their key issue is to decide whether bad company behaviour is a one off or structural?

Keeran Gwilliam-Beeharee from Vigeo said they do things differently. They start with the four core ILO standards. Governance issues are the best reported but Labour issues have a low coverage and there is decreasing information on it.

Mario Enrique Sanchez Richter, CCOO trade union economist spoke about his report on the sustainability of rating agencies and how well do they measure? His conclusion was that they do not measure very well.

Final speaker was  Brian Daley from ACTU who stated bluntly that he had not seen any evidence that Labour/Social ratings were actually used by fund managers or advisers to make buy or sell decisions.

In the Q&A Keeran responded to a question on why Labour issues are not being covered by saying that Governance issues such as corruption are seen as more important and lack of investor pressure.

I asked the panel whether rating agencies could give evidence of Companies with good Labour ratings having better long term performance? If they did this would this increase demand for such ratings? John replied that he was not aware of such evidence and agreed that Green and governance issues tended to "crowd out" Labour issues. Brian responded that we should be asking these questions and this should be at the heart of what trustees do.

The closing session was first a video from Liz Shuler, AFL-CIO & CWC co-chair on building an economy & retirement future that we can be proud of. Then final remarks from ITUC General Secretary Sharon Burrow, who said we want rights over our capital but we also want sustainability. While we respect workers in the carbon industry there will be no jobs in a dead planet.

Vote against Keith Hellawell as director of Sports Direct

"VOTE AGAINST resolution 4 to re-elect Keith Hellawell as a Director of Sports Direct International PLC at the AGM 9/9/15

We believe that voting against the chair Keith Hellawell is appropriate in order to send a message about our concerns about management and employment practices, and weak corporate governance at Sports Direct, which the chair must take responsibility for.

Trade Union Share Owners (TUSO) is a group of investors representing the financial assets of the labour movement and committed to long-term responsible investment. We collectively have over £1bn in assets under management and our membership includes affiliated unions that represent workers at Sports Direct.

We urge you to VOTE AGAINST resolution 4 to re-elect Keith Hellawell as a Director of Sports Direct at the Annual General Meeting on the 9thSeptember for the following reasons:

The company’s questionable corporate governance and employment practices are long-standing issues that pose potential risks to investors. Yet the current chair has not addressed them despite concerns being raised repeatedly by various stakeholders, further he has been criticized by MPs for his lack of knowledge of important events at subsidiary USC.

Voting against Keith Hellawell would communicate that shareholders concerns can no longer be ignored and that Sports Direct has to change the way they do business if the long term reputation and success of the company are going to be sustained.

MPs have said that the chairman Keith Hellawell of Sports Direct is presiding over a FTSE 100 company run like a “backstreet outfit” where executives made deals behind the board’s back, withheld payments to force suppliers and landlords to the negotiating table and failed to consult with staff over the pre-pack administration of its fashion chain USC.

For many investors and the wider public, Sports Direct is synonymous with the use of zero hours contracts and other controversial management practices. Sports Direct was even the subject of an investigation by Dispatches on Channel Four in April this year.

The risks posed by the use of zero hours contracts and other management practices revealed by Dispatches need to be disclosed to shareholders, and it is clear that investor expectations are growing. A report issued by the National Association of Pension Funds in June recommended that PLCs disclose the breakdown of full-time, part-time and “contingent” workers. The NAPF specifically highlighted the use of zero hours contracts as a potential risk that investors need to assess.

Shareholders are aware that much of Sports Directs workforce is employed on zero hours contracts, yet continue to be left in the dark about the extent of such practices. The chair has acknowledged that this is an issue by referring to casual employment in his statement in the annual report. However the 48 words that chair spends on the topic provides no further information. In the Corporate Social Responsibility section of the annual report there is neither any commentary on zero hours contracts or a breakdown of numbers in each type of employment.

We believe that the workers of any company are their greatest asset and they should be treated accordingly, something that we must ensure Sports Direct follows.

Life as a Home Carer in Modern Britain

On the 10 July I went to a well attended seminar on "Precarious work and zero hours contracts" which was organised by the TUC and "Trade Union Share Owners" (TUSO).

It was an unusual seminar since such a topic was aimed at investors and financial advisers. It was held under "Chatham House" rules but one of the speakers, Emma Clifford, has given me permission to name her and post on her presentation. 

Emma is currently a NHS student nurse but last year she worked for a private company as a home carer for elderly clients suffering from dementia. 

Her account was raw, blunt and honest and must have been particularly difficult to hear if you have elderly relatives who receive care in their homes. 

She was employed by a well known (or rather notorious) British Care company which is owned by a hedge fund which is funded in part by thousands of Local Government workers via thier pension scheme The hedge fund managers are super rich, multi-millionaires.  

Emma described how the experience of working for this company would stick in her memory for ever.  Memories of exhaustion, exploitation and even intimidation. It still makes her feel angry and emotional. Both for her fellow workers but most of all her elderly and vulnerable clients. 

It goes without saying of course that in modern Britain she was employed on a zero hour contract. With little or no employment rights, poor pay and no company benefits. 

The first thing that struck her was how disorganised they were.  Due to the dreadful working conditions there was such a high turnover in staff that no one knew when carers would turn up to support clients and their families. Many of whom were bed bound and dependent on carers coming to dress, feed, clean and care for them. Often she would do a lunchtime visit to discover that there had been no morning visit. The smell of unchanged overnight incontinent pads being the tell tale sign as she opened the front door.

She would go and lone visit a new client with no warning that the client was known to be potentially aggressive or that family members had mental health or addiction problems.

Often there was no time to properly care for her clients since she had to rush from appointment to  appointment. Due to the lack of staff she had to work 16 hour days and even once, 21 days on the trot. When she had days off planned her managers would ring her up and ask her to go in since someone had let them down. First they would sweet talk her to go in, then they would threaten if she didn't she would get no more further work and finally they would blackmail her into going to work. They would say if she didn't go into work then that nice old lady she saw last week would get no care. 

When Emma left to go and train as a nurse she whistleblowed to the Care Regulator, CQC,  who did little but at least confirmed that the staff turnover during the time she was there was a staggering 40%.

I hope the investors and advisers presents will look think long and hard about the human cost to staff and vulnerable clients from running care services on the cheap. While there is an obvious financial and reputational risk to any pension fund from being the owner or funder of an incompetent service that could eventually kill its clients or its workers.

It is also as Emma pointed out a complete waste of money in recruitment and training to churn so many staff and then let down clients.

I am convinced that the Council workers who fund such hedge funds will be outraged if they knew what was being done in their name and with their pension money.

Pension funds must be democratised and properly take account of the views of its beneficiaries who are the true owners of their money.

Pension funds are are long term investors will make money if they invest in companies that are well run, with good governance and do not exploit or harm its workers or clients.

Many thanks to Emma for her powerful and moving reminder about what is the true cost of the exploitation of those trying to care for the vulnerable.  This is not only a cost  in human terms to those giving and receiving care but also a real risk to those investors who aim to make money out of human misery.

Stewardship - taking action: TUC Pension Network Conference 2013

Janet Williamson, TUC senior policy officer spoke at the first conference workshop on "Stewardship".

She started by saying the one "good" thing to come from the financial crisis is the recognition that shareholders were not engaged beforehand and may have even made the crisis worse.

The Stewardship code was first issued in July 2010 and revised in 2011. The Kay Review into similar issues took place in 2012. There has been an increase interest by unions in shareholder activity and the concept of "workers capital". UNISON started its capital stewardship programme in 2007. There was also a number of high profile union campaigns on private equity.This included Unite shareholder resolutions at the Tesco AGM in 2009 and by UNISON on Tar Sands.

There was a realisation that there was a gap between union values & their fund manager voting records and that there needs to be collaboration on voting and engagement by union staff pension funds.

This led to the formation of "Trade Union Share Owners" (TUSO) in March 2013 to constructively use the £1 billion plus of assets in trade union staff pension funds. 

TUSO has a clear policy on executive pay and will vote against any package that means a maximum of top & average employee pay in excess of 20:1.  As well as being against any other increases that are not offered to all workers in that company. TUSO guidelines also ask that all board appointments should be publicly advertised.

Each of the trade union funds have an equal vote and voice. So far they have worked well on a consensus basis. Each fund has an opt out. It is also not about stock selection or disinvestment.

TUSO next steps are to grow beyond founders UNISON, UNITE and the TUC to include all union funds. There is a cost for taking part and a £6k maximum fee and then a sliding scale according to size of fund.

In the Q&A I asked any trade union trustees present to contact their union to encourage them to participate in TUSO and that not only should we be working collectively with other unions staff funds but surely in the UK, unions should be providing pension schemes to members as they do in Australia and elsewhere!