Stop Deliveroo and the gig economy dragging us back to the Victorian era
Ex-Sainsbury’s chief issues a stark warning on jobs...
JUSTIN KING has worked for some of the country’s biggest corporations at the highest level. The former chief executive at Sainsbury’s sits on the board of Marks & Spencer and holds an array of other roles at firms including Wyevale Garden Centres and Brighter kind care homes, where he is chairman until later this year.
So when he warns the relationship between Britain’s businesses and the rest of society has become ‘broken’, it will resonate loudly in boardrooms and across Whitehall.
King, one of Britain’s most prominent business leaders after reviving the fortunes of Sainsbury’s during a decade in charge, is particularly al armed by the employment practices adopted by fast-growing digital firms such as Amazon and Deliveroo.
He says many of these companies have fuelled poor working contracts, undermined the economy and driven social resentment.
‘The relationship between commerce and society is broken,’ King says. ‘I think society is less at peace with its relationship with commerce than it has been for more than 100 years. I don’t think that’s a good thing for commerce and I really don’t think it’s a good thing for society.’
King goes as far as saying some firms have now adopted ‘Victorianera’ working practices by using – and exploiting – casual labour.
Warehouses run by online shops Amazon and Asos have been criticised by campaigners who have also targeted those run by traditional retailers such as JD Sports and Sports Direct.
In one recent rebuke, dismissed by Amazon as ‘ misinformation’, the online giant was accused of failing to allow workers sufficient time to go to the toilet or for pregnant women to take breaks. At the extreme, some firms now force people to work for themselves – rather than on contracts – with few fringe benefits and no safety net at all. Uber, the taxi firm, and Deliveroo, the deliveries giant, have both drawn fire. It is something King also finds particularly galling.
King immediately sees similarities with the way dockers were paid ‘piecework’ in the 19th Century. He calls to mind a pertinent example from his time at Guy Hands’ private equity firm Terra Firma, where he was vice-chairman.
‘In my old office at Terra Firma there is a black and white photograph taken near the docks in London Bridge where the dockers used to wait queuing round the block for work,’ he says. ‘They were only getting day work, they didn’t get it if they weren’t able bodied; I suspect they didn’t get it if their skin colour wasn’t right; I suspect if they were a member of a union or a trouble maker they didn’t get any work. All of those things.’
He said ‘in that exact same spot’ he has seen Deliveroo drivers waiting to be called by the online delivery firm to carry food from restaurants to the homes of Londoners on contracts that many might consider to be indistinguishable .‘ That doesn’t feel like progress to me,’ he adds.
And it isn’t just the approach to employment contracts, he explains. Uber and Deliveroo are also examples of firms shifting what would normally be seen as company obligations on to their workers: both, for instance, ask drivers to use their own vehicles for their work. ‘Do Deliveroo feel they have any ownership or responsibility of the road worthiness of the vehicles that their drivers and riders use?’ King asks. ‘Or the extent to which their riders and drivers abide by the law?’
Deliveroo told us it provides ‘flexible, well-paid work to 25,000 selfemployed riders in the UK’ and was the ‘first company in the on-demand economy to offer riders free global accident insurance’.
But King is not impressed. He draws on his experience to formulate an answer to an increasingly complex and out-of-control problem. He ran Marks & Spencer’s food business before he left for the top job at Sainsbury’s and also held senior roles at Asda. ‘I think that the legislation, the core of this, is recognising that people are really your employees,’ he says. ‘And through doing that, recognising all of your responsibilities for them.’
However, he draws a clear distinction between necessary ‘zero hours’ contracts – used by companies which genuinely only need people at certain times of the week or even seasonally – and the exploitation he is railing against.
‘We had a rule in Sainsbury’s that we never contracted any [of our part-time workers] on less than 16 hours a week. Usually they worked 16 hours a week because that works for them and if you need an extra ten hours from someone who works 16 hours they will usually find it for you. If you need that flexibility from someone already doing 40 hours they probably won’t, and probably shouldn’t, accommodate you.’
He highlights the contrast to what he sees elsewhere: ‘Compare that to sending a white van driver 100 drops – which means, at a minimum, he’s going to drive 150 miles in a vehicle he’s hired from a place that you’ve dictated he’s hired from, to a schedule that you’ve sent him. To argue that he doesn’t work for you and that he’s in control of his own work – it’s nonsense.’
King says legislation – often set with the best intentions – has only served to drive the wedge. The minimum wage, property taxes and Apprenticeship Levy and insolvency rules t hat allow badly run firms to renegotiate leases en masse force healthy firms to take ‘retrograde steps’ such as cutting bonuses or scrapping paid breaks, he says. ‘I feel many good businesses, better business that employ people well, are doing bad things, not because they think they should because its something they have had to do – they’ve got no choice.
‘It makes good employers row in the wrong direction because the field of play is being tilted in favour of bad employers. And eventually good employers have to play the same game. That’s why it makes me angry. Because vibrant and profitable commerce, creating and maintaining great jobs, paying its taxes and paying the country’s bills has never been more important.’
Society is less at peace with business than it has been for 100 years
Creating and maintaining great jobs has never been more important