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Author of report into COVID-19 in food manufacturing encourages employers to ditch outdated ideas about trade unions.
Thursday, 26 November 2020, Alice Martin
As told to Katie Coyne
Who do you work for, and how did this report come about?
PIRC is Europe's largest independent corporate governance and shareholder advisory consultancy firm, and we carry out this type of research on behalf of our clients. We don't necessarily put that work together into a public facing report, but we felt that this was of significant public interest.
The angle that we took, looking at the impacts affecting the workforce, is something that we are beginning to do more frequently and do more of. We have taken a decision to prioritise labour issues within ESG – environmental, social and governance – in companies. We feel that the environmental story has been really well told, but there hasn't been as much positive action in the area of social concerns. During the pandemic, we decided to try and understand what's happening in workplaces continuing to operate.
We are using probably quite innovative methods, for example, going directly to the workforce to get testimonials, speaking to workforce family members, and speaking to unions routinely to understand the history of any workforce issues. Then we put those concerns directly to the company, so we'll engage the CEO or a board member.
Were you surprised with what you found?
We were surprised that some companies weren't taking the outbreak seriously enough in the initial stages. What probably surprised us most is the slowness of companies to be willing to slow down production lines or increase sick pay or change their practices in ways that would protect workforces.
The government decided very early on that food production was an essential service and therefore those workers didn't have to comply with the same levels of social distancing as other types of workplaces. I think because of this, there was a grey area in food production where companies were unsure about what they needed to do to protect the workforces. And as a result we've seen significant outbreaks.
But the issue with the reporting is again, the product of another grey area. The Health and Safety Executive has had to update its guidance to take account of COVID-19 – and the RIDDOR framework was never really set up to account for this type of workforce injury. There is a lot of wriggle room for companies to determine themselves whether a COVID-19 case was contracted within the workplace or outside. And so these companies have erred on the side of not reporting, claiming they don't have evidence to suggest that transmission happened in work.
We think that's producing an incorrect picture. In some companies we are seeing these repeat outbreaks of several people, in some cases several hundred people, contracting the virus. And even then, those cases aren't often being reported under RIDDOR. And we think that's incorrect.
Why is this a problem, and why are investment companies concerned?
If we don't have an accurate picture of the level of outbreaks, it's very difficult to determine what good practice and bad practice looks like. Investors rely on public reporting like RIDDOR.
Where we have seen multiple cases of COVID in one workplace, for me it's difficult to see how there wouldn't be a role that that workplace has played in transmitting the virus – and in those cases, I think they should be reported. Ideally all workplace cases should be reported, just because that would give us a clear picture. At the moment, we don't have any public data on COVID cases within workplaces that is consistent.
Is RIDDOR something that you have looked at previously?
For all FTSE 350 companies we will take note of RIDDOR statistics each year. It is a useful measure that is used routinely in the sector, which is why we're a bit dismayed that it's not being used particularly well or consistently during the pandemic.
There is concern that austerity cuts to public services, have hindered regulators’ ability to act. Is this something you’ve seen?
Companies are very quick to say they're working closely with local health and public authorities. But when you dig a bit deeper, often all that means is exchanging emails or having phone calls occasionally. The level of physical inspections of workplaces has been low and really patchy. In the FT Sarah O'Connor's article mentions Cranswick Foods and at one of their sites, where there have been significant outbreaks, there haven't been any physical inspections.
Is there an easy solution to this?
Given the kind of austerity impacts on local authorities and also the Health and Safety Executive itself, I think trade unions or just increasing the role for trade unions is probably quite an efficient and effective way to improve health and safety standards. In a way, it's a sort of internal form of inspection and enforcement because it relies on the workforce themselves to raise concerns together when they have them.
In workplaces where there is an active trade union, and constructive relationships between the union and management, there are far fewer safety breaches because you have that in-house expertise. Basically you have a health and safety rep who is trained and who knows what to look for. And you have a very engaged workforce who feel, able and supported, to be able to come forward and make complaints or just to raise concerns.
Advising more trade union involvement seems contrary to what business is all about?
There are different perspectives on this but there is a lot of research to show that having good social standards within a company – good workforce practices, well paid staff, and staff feeling that they have a voice that will be listened to – that those firms perform better financially.
We don't see ESG-responsible commitments as being contrary to good financial performance. We see the two things as complementing each other. The idea that having a trade union is a drag on business is an outdated one.