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Brexit and Its Implications for Construction Labour

June 30, 2017

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Professor Linda Clarke, Professor of European Industrial Relations, Centre for the Study of the Production of the Built Environment (ProBE), Westminster Business School, University of Westminster discusses Brexit and its implications for construction labour in Britain.

With Brexit dominating the political and news agenda, it is important to consider what implications leaving the European Union (EU) might have for the construction industry, and for construction labour.

The first implication relates to the free movement of labour, and the barriers Brexit might pose to the deployment of workers from elsewhere in the EU. It is difficult to estimate the proportion of migrant workers in the construction sector, though this has certainly increased since 2004, largely attributable to the workers coming from East European countries. The latest official figures show that 12% of the workforce of 2.1 million are migrants, of whom the largest share (7%) are from non-EU countries, only 5% coming from elsewhere in the EU[i]. The largest concentration of migrant labour is in London, representing about half the workforce.

However, whilst some of these migrants may be considered as ‘posted workers’ (those working temporarily whether as subcontracted or agency labour or even self-employed), many posted construction workers will not be regarded as migrants. Posted workers are especially prevalent in the increasingly global engineering construction sectors, where much resentment has arisen over the last decade on the part of UK-based workers constructing large projects, including Staythorpe, the Isle of Grain and several biomass power stations. Here, some contractors and subcontractors took free movement as an excuse for wage dumping and for discriminating against the recruitment of UK-based labour – a factor that contributed in no small way to the outcome of the referendum.

This position was aggravated by the government’s transposition of the EU Posted Workers Directive, intended to regulate the movement (posting) of labour as opposed to services transnationally, as requiring only minimum legal provisions instead of customary or collectively agreed terms and conditions. Various decisions (Viking, Laval etc.) of the European Court of Justice, giving freedom of competition precedence over fundamental social rights, only added to the boiling resentment on construction sites.

The free movement of labour has been to the great advantage of the construction industry across Europe, both for workers and employers, but the intention was never for this to have supremacy over basic social rights. Switzerland provides a good example of an alternative approach. There, 24% of the total population of eight million are migrants, with many working in the construction sector, where almost 60% belong to the union UNIA, of whom 75% are migrant.

Three years ago in a referendum in Switzerland on immigration, the Swiss narrowly voted to ban Europeans entering to work in the country, and the government was subsequently told by the EU that, if discriminatory measures against Europeans were imposed, then access to the Single Market would be lost. So, instead of controlling immigration through the cumbersome bureaucracy of visas and permits, the Swiss decided on internal controls compliant with EU rules and based on a requirement that, for instance, in some cases firms should advertise posts with local job centres. Qualification requirements for particular jobs and ID checks on social security contributions are other options. Then why doesn’t the UK consider this alternative approach?

Construction has always been an important sector for migration and this has contributed to innovation and the development of a highly qualified workforce. The large construction firms have also become increasingly international, in particular those constructing major infrastructure and engineering projects, so that we are all now familiar with the likes of Vinci, Skanska, Holcim and Bouygues. Large infrastructure projects such as the London Underground Jubilee Line extension, Crossrail, the Gotthard Tunnel and Thames Tideway are inconceivable without the internationalisation of firms and the labour force. Following the Brexit vote, where are the estimated 31,350 new construction workers required every year in the UK and the annual recruitment requirement of 157,000 people over the next five years to come from?

One possibility is through training. However, as the industry’s reliance on free movement has increased, employers and the UK government - unlike in many other leading European countries - have slowly abdicated from responsibility for the vocational education and training (VET) of the workforce, relying instead on ‘poaching’ from VET systems elsewhere in Europe. The number of construction trainees and those undertaking an apprenticeship in the UK has plummeted and is now at an historical low, at a time of greater prefabrication, mechanisation and digitalisation, when the workforce is required to be ever more qualified. In 2015/6, for example, the number of trainees in the wood trades, an occupation in high demand, was 4,316 in Britain, down from 5,893 in 2013/4, whilst those in bricklaying declined from 3,313 to 2,614 in the same period; only 66% of those in wood trades and 44% of bricklayers are following an apprenticeship programme. Only 16% of all construction trainees too are pursuing a National Qualification Level 3 qualification, equivalent to three years training, which is the standard in much of mainland Europe and in some countries even the minimum construction qualification level[iv]. Such UK training figures are not surprising, given that 88% of construction firms employ under 13 people and only 0.8% more than 113, hardly providing a sound and broad-based training and work experience infrastructure[v]. Added to this an estimated 50% of construction workers are self-employed and thus in no position to train others.

The lack of regulation of VET by successive British governments is also evident with respect to employment rights and working conditions in construction in Britain, an area in which has relied on EU directives. The fairly comprehensive and structured set of health and safety directives over thirty years has significantly contributed to a lower number of fatalities and a safer working environment. There have been no ‘home grown’ UK health and safety laws in this period, though there has of course been UK involvement in developing these directives through representation in the Council of Ministers, the European Parliament, the European Economic and Social Committee and the Social Dialogue (representatives of the trade unions and employers associations at European level). Indeed, the Social Dialogue has been a means by which employee participation and coordination across Europe has been facilitated, another being European Works Councils. It is thanks to such procedures that we have the Construction Design and Management Regulations, to facilitate the coordination and management of health and safety issues on sites, as well as the Working Time Directive, the first attempt to regulate working time in Britain. The latter introduced paid holidays and breaks and, were it not for the ‘opt out’ demanded by the UK government, maximum working hours, and hence a better work-life balance and more inclusive working environment.

The danger is that the construction sector in Britain may pay a high price for Brexit, including chronic skill shortages, low wages, deteriorating health and safety, long hours, and continued male -domination. The puzzle remains though how a global construction sector dependent on the European labour market, regulation, and know-how can continue to thrive if external border controls instead of internal controls are imposed.

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