Unemployed people ‘bullied’ into unpaid work at Tesco, Primark and other multinationals

by Corporate Watch / News, Public Services / 11 Aug 2011

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Unemployed people are being sent to work without pay in multinational corporations, including Tesco, Asda, Primark and Hilton Hotels, by Jobcentres and companies administering the government’s welfare reforms. Some are working for up to six months while receiving unemployment benefit of £67.50 a week or less.

The government says that unpaid work placements, which are also given in small businesses, voluntary organisations and public sector bodies, help people gain vital experience and prepare them for the workplace, but campaigners argue they provide companies with free labour, undercut existing jobs and that people are “bullied” into them.

In an interview published by Corporate Watch today, a woman who was given a placement in Primark for six months, under the previous government’s welfare programme, says her work was the same as that of other paid staff and that she was not given a job at the end of it. She also says she was told her benefits would be stopped if she did not attend.

A variety of multinational companies in the retail and service sectors appear to be taking people on unpaid placements. Employment services company Working Links, which has been awarded contracts to administer the coalition’s flagship Work Programme in Wales, Scotland and the South West of England, told Corporate Watch it worked with all the major retailers across Britain and “actively promoted volunteering as a tool to help our customers in their journey to find sustainable employment.”

A Tesco spokesperson said the company has 3,000 work experience placements for “the young unemployed,” while Asda and Sainsbury’s are both named in a list, obtained last month under the Freedom of Information Act, of companies, voluntary and public sector bodies taking unpaid work placements organised by A4e, another employment company contracted by the government, although Sainsbury’s denied working with A4e.

This comes after the discounter Poundland had been revealed to be taking people on unpaid placements earlier this year (see here).

The corporate placements are not limited to retail: Hilton Hotels told Corporate Watch they have “committed to 100 placements at hotels around the country – that’s more than one for every hotel we operate.”

Explaining the reasons behind its involvement, Hilton said: “the work experience initiative will help unemployed young people to develop the skills needed to secure a sustainable job,” but campaigners critical of these “workfare” programmes question why the companies are not paying a proper wage.

A spokesperson for the Boycott Workfare campaign said: “These placements are not designed to help people into full-time paid work but they serve to increase organisations’ profits. They provide a constant stream of free labour and suppress wages by replacing paid workers with unpaid workers. People are coerced, bullied and sanctioned into taking the placements. Placements in the public sector and charities are no better and are making volunteering compulsory. This is taking away the right of a person to sell their own labour and their free will to choose who they volunteer their time for.”

When asked by Corporate Watch, the Department of Work and Pensions (DWP) did not say how many placements led to paid jobs. Tesco said “many work placement staff starting on work placements will become Tesco employees,” while Hilton said “a number” of young people are offered full-time positions at the end of their placement. Asda and Primark did not comment. Sainsbury’s said they organise their own ‘You Can’ programme, outside the government schemes, which they said always leads to paid work.

People are sent to work unpaid through different government schemes, all under the Get Britain Working banner. Tesco and Hilton are taking 18-24 year olds for between two to eight weeks on Work Experience Placements direct from Jobcentres. People were sent to Primark and Asda by contracted employment companies through the previous government’s Flexible New Deal for up to six months and this will be continued in the recently started Work Programme. The DWP said the decision to send people to corporations under the Work Programme will be made by the employment provider companies as they see fit.

This is in addition to the Mandatory Work Activity scheme, through which 20,000 people will be sent to work (unpaid) for up to 30 hours a week for 4 weeks. The DWP said these jobs will “deliver a contribution to the local community” and will not involve major corporations.
Do you know any other companies taking unpaid work placements? Contact Corporate Watch on 02074260005 or contact[at]corporatewatch.org