T1-10: Wage setting and minimum wage

6 September 2019, 09:00–10:30

Chair: Thorsten Schulten


Employers and employees’ responses to the UK national living wage in non-compliant small firms

Which way out of poor work in the informal sector?

Guglielmo Meardi, Scuola Normale Superiore

Concerns with the regulation of ‘poor work’ in a context of declining collective bargaining coverage have been growing in the last decades, resulting in the introduction of national minimum wages in countries that did not have them (UK, Germany) and campaigns for generous increases in their levels (especially in the USA). The use of individual legal rights, decoupled from collective self-regulation tools, may however meet problems of legitimacy and enforcement, and increases in the levels of minimum wage might increase non-compliance, resulting in more informal forms of work. The paper addresses this issue by looking at the reactions of non-compliant small firms to the introduction of the National Living Wage in the UK in 2016, which involved a substantial increase of the minimum wage and new enforcement mechanisms. Drawing on 22 mostly longitudinal case studies of small non-compliant firms in the Birmingham area, involving interviews with both employers and employees across time, the paper addresses the finding of overwhelming continuity in non-compliance despite regulatory and economic changes. By detecting institutional sources of such continuity, as well as some factors behind the rare cases of transition to compliance, the paper proposes that non-compliant managerial practices are unlikely to be by transformed by legal regulations alone, but are susceptible to be affected in labour supply changes, and in particular better information and socialization of workers in the low-pay segments of the labour market. Implications are drawn for both labour market and immigration policy.

Transfers of undertakings and the minimum wage

Care home workers falling through the safety net?

Jereme Snook, Sheffield Hallam University
Julie Prowse, University of Bradford
Peter Prowse, Sheffield Hallam University
Michael Whittall, University of Erlangen-Nuremberg

» Full paper: ilera-2019-paper-290-Snook.pdf


This paper presents longitudinal research conducted into awareness of, and attitudes towards, the UK National Minimum Wage (NMW) as seen through the perspectives and experiences of care homes workers in the North of England. The Care Act (2014) changed the delivery of social care and local government (now commission) rather than to provide care. In the UK the major care home service is delivered by a range of private companies and providers, whose workforce are mainly support/care workers paid on the national living wage pay rates (Grant Thornton, 2014). The paper also reports upon the variation of care workers’ employment contractual rights caused by transfers of ownership (TUPE) of these care homes. The Low Pay Commission (LPC) has expressed concern about the reduction in local government funding to pay national minimum wage rates (Low Pay Commission, 2015: 216; Gardiner and Hussein, 2015; Unison, 2015).

The paper’s findings add to knowledge about the significance of a NMW to care workers and their families, focussing upon the insecurities articulated by these workers caused by the sometimes rapid changes in ownership regimes in the care homes industry. These changes cause understandable concerns about job security for care workers and pose questions about the long-term viability of the care homes model in the UK economy. The precarious nature of this work presents its own questions too about the efficacy of TUPE rules and regulations (as amended) as applied to industry and, specifically in this paper, to care home workers. TUPE rules can sometimes be presented as a ‘safety net’ to workers faced by changes in care home ownership. This paper charts developments that place in doubt the sustainability of the ‘safety net’ because of a lack of precision in the TUPE rules, coupled to the ability of business owners to vary employment contracts that threaten to undermine worker rights.

The paper is timely because it resonates with contemporary debates about establishing workers rights in the ‘gig’ economy, also the significance of the NMW and its presentation as a Living Wage (LW) by Government in a time of austerity, which together now forms part of a general literature on low wages and sustainability of income (see, for example, Prowse et al. 2016 and 2017). The structure of this paper is as follows. We present the methodology employed to explore how care home workers in the North of England have encountered variations in their employment terms, conditions and pay rates often triggered by imminent transfers in ownership in specific homes and businesses. The findings of the data and the analysis are then presented followed by conclusions and recommendations in the paper itself.


The interviews were conducted with care home sector workers in the Yorkshire Region (UK) in March 2018. The interviewees were approached via networks with the Care Home Companies, and GMB (Trade union) union officers’ access to meet care workers at work.

Seventeen semi-structured interviews with care workers via face-to-face and pre-arranged telephone conversations whilst off duty and away from the care homes premises ranged across a cross section of skills, ages, occupation and experiences. We examined the working conditions of care home workers, specifically pay rates, shifts, caring duties and responsibilities, training requirements and career paths all making demands upon their working environment and developing changing attitudes towards work. This primary data is supported by interview and ad hoc commentary in form of the secondary data from GMB officials in the field operating in an advisory capacity to the care home workers as part of a wider campaign to increase membership and to embed the NMW in both the public and private sectors (see for similar campaigns, for example, Prowse et al, 2016). Central to the paper are the care home workers’ awareness of the NMW, the experiences related to it and impact upon them. We included questions about care workers knowledge of the NMW and UK and EU law, specifically their awareness of transfers of undertakings legislation and preservation of contractual employment rights as defined by TUPE 2006 (as amended). The purpose of the methodology was to collate views, opinions and reactions of care workers with differing levels of skill, knowledge, experience and awareness of the changing nature of the care working industry in an identifiable local geographical area. The interviews were professionally transcribed, the findings catergorised, analysed and presented in this paper across a range of themes capturing orientations towards work, levels of satisfaction in work and awareness of the NMW and its impacts upon the working practices of these care workers. We also balanced these perspectives with semi-structured interviews with owner managers and employee managers in care homes in the same geographical locations.  The paper then explains the law relating to TUPE (as amended) to contextualise the circumstances of the ownership changes caused by sale of care homes by transferors (sellers of the homes) to transferees (buyers of the homes).  The findings show that care workers are trapped in a low wage, low skills, and a low training environment. Career opportunities to develop are limited by these occupational barriers. The notion of TUPE providing a safety net against losing one’s job are not proven as employment is increasingly precarious once ownership regimes change. There is very little awareness of employment rights beyond the interventions provided by trade union officers so that the safety net becomes illusory for most and non-existent for some.


  • Gardiner, L. and Hussein, S. (2015) As if we cared: The costs and benefits of the living wage for social care workers, Resolution Foundation. March available on http://www.resolutionfoundation.org/publications/as-if-we-cared-the-cost...  
  • Grant Thornton (2014) Residential Elderly Care: UK sector review. London: Grant Thornton. Available on http://www.grant-thornton.co.uk/Documents/Private-Residential-Elderly-Ca...
  • Low Pay Commission (2015) National Minimum Wage: The Low Pay Commission Report 2105, March 2015, Cm 9017, HMSO.
  • Prowse, P., Prowse J. and Snook, J., (2017), “The Living wage and the Social care sector - the case of social care homes”, Paper to the ‘International Labour Process Conference’, Sheffield, UK, April.
  • Prowse, P., Prowse J. and Snook, J., (2016),  “Austerity and the Living Wage: the Case of Care Homes in Britain”, Paper to the ‘BUIRA’ conference, ‘Living Wage Stream’, Leeds, UK. July 1-3rd.


Visible and invisible hands in the transnational wage setting in Europe

Aarron Toal, Durham University Business School

This paper addresses the question how in Europe a common transnational strategy among industrial relations actors and cooperation between actors can evolve over time and what the consequences are. More specifically, if a common transnational strategy and cooperation is beneficial not only for industrial relations actors themselves, but also for the economy and society, is a common strategy evolving by itself on basis of existing formal and informal institutional channels of interactions over time or do we need new institutions, rules and incentives from ‘outside’? And if new institutions and rules are needed which of them are politically feasible and realistic? In other words are the mutual benefits sufficient so that national actors can pull themselves towards a common strategy or, in the case of Europe, do national actors need to be pushed by European ‘authorities’? In any way a common strategy among national actors is a question of transnational coordination between actors which only works under certain conditions. On basis of results of a current research project and of previous case studies the prerequisites and conditions for transnational coordination between actors are identified and integrated in a micro theoretical model of action and interaction. With this approach, different formal and informal institutional channels of interactions are analysed in order to explain how a European ‘system’ of industrial relations can be established and maintained over time.

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