Trade Union and Cooperative Solutions To Self-Employment
* Report: Not Alone. Trade Union and Cooperative Solutions To Self-Employment. By Pat Conaty, Alex Bird and Philip Ross. Co-operatives UK, 2016
1. Giles Simon:
"The new tax year, which starts on 6 April, will see record numbers of self-employed workers, according to new data published by Co-operatives UK, a body that supports freelancers coming together for shared services.
The body’s report, Not Alone, tracks current levels of self-employment and the ways in which co-ops can help freelancers meet shared needs. The key findings are:
- At 15% of the workforce, government statistics show that 4.6 million people are now self-employed – the highest numbers in the UK since record began
- One in four people (27%) of employees in medium-sized firms in the UK would like to work in self-employment (22% in small firms, 14% in the public sector).
- The number of freelancers is likely to grow further over the next year, reflecting a significant change in the pattern of work in the economy
- The average income of self-employed workers fell by 22% in the five years up to 2014, indicating a growth in lower paid self-employed workers
In line with this growth in self-employment, the report identifies examples of freelancers coming together to form co-operatives for shared services, from back-office support, debt management and contract advice to access to finance and sickness insurance and the shared use of equipment and access to workspace.
There are a number of examples across the UK of co-ops of self-employed workers, from fifty music teachers forming a co-operative to market their services to schools, to interpreters laid off by Capita providing interpretation services in judicial courts through a co-op.
But the report also identifies considerable scope for the growth of services in the UK, pointing to well-developed approaches overseas.
In the USA, the Freelancers Union provides its 280,000 members with advice and insurance. In Belgium, SMart is a co-op offering invoicing and payments for 60,000 freelancer members. In France, new legislation allows self-employed workers to access the sickness pay and benefits of conventional employees through co-operatives.
Pat Conaty, co-author of the report and a freelancer himself, said:
"Self-employment is at a record level, but it is not yet at the high water mark. The pressure and the promise that lead people to go freelance will continue to swell the ranks of the self-employed over the coming year."
"Working alone can be aspirational, but it can also be lonely and anxious. There is an extraordinary opportunity for new co-operative solutions for self-employed people, giving them the freedom of freelancing with the muscle of mutuality."
2. Pat Conaty et al.:
"As the Not Alone report showed, there is good trade union practice in the UK and across Europe for organising freelance workers in the entertainment and media sector.18 The Federation of Entertainment Unions (FEU), including the NUJ, BECTU, Equity, the Musicians Union and the Writers Guild are leading examples. There is scope to extend this media sector expertise to assist other unions and there are successes in organising in transport and logistics.
The Not Alone report also showed that strategic trade union partnerships with co‐operative organisations are crucial to successful organising of informal economy workers, as was the case before 1945, when both movements worked in solidarity. ILO Recommendation 193 passed in 2002 shows how trade union co‐promotion of co‐operatives has aided organising strategies in developing countries over recent decades." (https://wiki.p2pfoundation.net/Trade_Union_and_Cooperative_Strategies_for_Organising_Precarious_Workers)
"There are now more self-employed workers than at any time since modern records began. Some 4.6 million people, around 15 per cent of the workforce, are now self-employed and data from the Office for National Statistics show that two thirds of new jobs in the UK created in recent years are down to self-employment.
The number of freelancers is likely to grow further during the tax year from April 2016, reflecting a significant and permanent change in the pattern of work in the economy. Survey research for this report suggests that one in four current employees in medium-sized firms (27%) in the UK would like to go self-employed (22% in small firms). Current projections are that by 2018 the number of people who are self-employed will outnumber those working in the public sector.
This report focuses on the needs of people in self-employment who face low income and social and economic insecurity – the ‘self-employed precariat’. Around four out of five people in self-employment (83%) are sole traders with no employees. The self-employed precariat is reflective of complex and diverse patterns of atypical work that is growing, ranging from casual working to temps, agency staff, own account workers and Uber drivers.
The self-employed precariat do not enjoy employment rights and protections at work, or any of the implicit services associated with being an employee, such as payroll or workplace insurance - let alone pension or sick pay. In addition, their potential income is indirectly eroded by other costs such as agency fees. They face additional challenges related to being paid on time and the right to a contract. To compound all this, many self-employed are among the lowest paid workers in the UK.
There are examples of freelancers coming together to form co-operatives for shared services, in some cases with support from entrepreneurial trade unions who see the opportunity to support members who are self-employed, not just those who are employed:
• In Swindon, 50 music teachers have come together to form a coop to market their services to schools, with support from the Musicians Union
• In London, interpreters came together in November 2012 in a co-op RICOL after changes in their terms and conditions when the firm Capita took on the contract to provide interpretation services in judicial courts.
• In Wales, the Oren Actors Management Co-op allows actors between roles to work as agents for other co-op member actors, marketing their services
However, compared to practice in some countries overseas, these initiatives look to be in their infancy:
• The Freelancers Union has been formed for the self-employed in the USA. It has attracted over 280,000 members which is indicative of the potential, but constitutionally it is a mutual and remains separate from mainstream union federations
• In the Netherlands and Spain general unions for self-employed workers have emerged and developed since the late 1990s. These provide a range of services as well as representation
• In Belgium, SMart is a co-operative with 60,000 members, supporting them by invoicing and collecting debts for them
• In France, legislation that came into force in January 2016 recognises the role of 72 business and employment co-operatives, supporting members with accounting and access to the sickness pay and benefits of conventional employees
• In India, the Self Employed Women’s Association founded by the inspiring Ela Bhatt, brings together 1.7 million members and acts as a service co-operative, for example providing micro-insurance, and as a trade union fighting for member rights
The key findings from examining these initiatives are:
• The best services offer back-office support, debt management, contract advice, access to finance, sickness insurance, the shared use of equipment and access to workspace. There is considerable scope for the growth of similar, integrated services here in the UK, reducing the costs of using agencies or being excluded from services
• Collective bargaining for the self-employed is complicated by competition law, which seeks to restrict the sharing of sensitive information across businesses, potentially restricting the extent to which groups of self-employed people can work together around general or minimum rates of charges for their work.
Where they are members of a co-operative, and not in a position of market dominance, this risk is reduced
• Some key services, such as mutual guarantee societies, which help freelancers leverage low-cost loan funds from banks, have a proven track record in 20 EU countries, but face unintended regulatory barriers in the UK
• The release of untapped potential in the UK would be helped by partnership with the trade union movement. A good example of this is already found in Equity and in the Musicians’ Union, both of which actively work closely with co-ops.
The report calls for the cousins of the labour movement - co-operatives, trade unions and mutual organisations - once again to come together and help form cohesive institutions to unite the self-employed precariat.
The four guiding objectives and recommendations for uniting self-employed workers are:
1 Recognition of the growing self-employed workforce, by developing organising strategies for self-employed workers, bringing together trade unions and the co-operative sector and operating with the support of national union centres such as the TUC.
2 The development of organising strategies will involve consideration of key priorities for action, including the:
• Primary sectors, such as the creative industries, care services and the green economy
• Primary services, such as a credit union for freelancers, provision of microinsurance and related services such as debt collection, tax accounting and legal advice, the scope for platform co-operatives and sources of capital for cooperative business development
3 The interests of self-employed workers are not well represented in national policy-making, with the result that they face unnecessary regulatory burdens and barriers. The Department for Business, Innovation and Skills (BIS) should identify how to create a voice for self-employed workers at the heart of government, learning from the way in which wider small business has successfully become recognised over time, in business policy, regulatory interventions and commissioning design.
4 Two policy initiatives that are high priority, to unlock the potential for collaboration across self-employed workers, are: the development by the Treasury and Financial Conduct Authority of an appropriate regulatory treatment for Mutual Guarantee Societies; and exploration by the Department for Work and Pensions of the potential for business and employment co-operatives for people on benefit. The world of work is changing rapidly and in many ways we are returning to older structures when more forms of work were characterised by dispersed day-rate payment and job payment. In the 19th century working class self-help organisations included craftsmen’s guilds, co-operatives, friendly societies and the first unions.
Together they collaborated and proliferated to improve working conditions, to secure rights and status and to maintain standards of living for workers. In an age of economic insecurity and rapid changes in technology there is now the opportunity to reinvent democratic self-help for the twenty-first century in order to widen participation on a fair basis for all in work."
Examples of freelancer co-ops:
Co-operative Wealth is made up of nine independent financial advisers. Having worked for a range of employers and as freelancers, they set up the co-op in order to market their services and cut costs on back office services.
Ricol was set up in 2012 when a group of interpreters were made redundant from business services firm, Capita. They formed a co-operative that provides a range of translation services, for businesses and judicial courts, as a way to promote their work and share costs.
Swindon Music Co-operative was formed in 1998 when the local authority disbanded its music service for schools. 20 music teachers, no longer employed by the council, formed the co-op to market their services. The co-op now has 50 teachers in membership.
Gilded Splinters is a co-op of 42 specialists in advertising, film, design and marketing more widely. Most of the people work elsewhere as well, but come together for specific projects for the co-op. They offer a consultancy service that aims to help organisations generate ideas and offers them for free, allowing the organisation to choose whether to use Gilded Splinters or not.
"I think others on this list will immediately see when they review the report that the strategic implications are enormous for a Great Transition. As the report shows, since 2008 in the UK the self-employed have created 6 out of 10 jobs. A majority are also the lowest paid workers. 83% of them employ nobody else and they lack working rights to sick pay, holiday, pension parity, etc, etc The job creation figures do vary in other countries but with deregulation and outsourcing and the demise of public sector jobs due to the screws of austerity, the trends in other countries are in the same direction. However despite these facts, there needs are not on the political radar of politicians and they are overlooked by most trade unions.
The facts are that this new and growing Salt of the Earth comprises a ton of votes so they can indeed shift politics in a solidarity economy direction if practical action can be positioned and widespread champions found. But for this to have a chance, widespread organising is crucial and key to cross leveraging this untapped progressive political potency. Getting trade unions and the co-op movement and municipalities to see the potential for co-organising services provision is the starting point as we show. Thus we are really pleased that the Trades Union Congress has reviewed our draft and senior officials are picking up on this thinking." (email, March 2016)
The full report and a summary can be downloaded from www.uk.coop/notalone
Contact, for interviews, case studies or more information, Giles Simon on 07952 644 833 / [email protected]
- www.uk.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.