Students’ Union officers have expressed their concern about the University’s plan to use a legal loophole in order to pay workers, including many students, less.
Accommodation and Commercial Services (ACS) has set up a subsidiary company which from this month will be used to employ all of their new staff.
The company, to be known as Sheffield Trading Services, will be used to bypass University standards of pay and conditions, leaving their profits higher and workers out of pocket.
In an unprecedented move, ACS has banned this edition of Forge Press from being distributed to University-owned residences, including the Endcliffe and Ranmoor villages, in response to its intention to print this story. They have also told Forge Press that they are unwelcome at events at residences over moving-in weekend.
In 2010/11 ACS ran at a deficit of £98,000. Using this new mechanism they intend to achieve an overall profit of £223,000 by 2016/17.
In a document seen by Forge Press, ACS state the loophole company can “better manage and control direct operational costs”, allowing it to decrease its deficit and increase profit levels by 12 per cent, to a level it describes as “industry standard”, by effectively decreasing pay rates offered to staff.
ACS are using a ‘Special Purpose Vehicle’ (SPV), a business model that is created solely for particular financial transactions the front company is unable to perform, in this case, paying students outside of the University’s pay model.
In a statement to Forge Press, the Students’ Union Officers said: “We are concerned about this move by the University due to our commitment to the Living Wage Policy that was voted for by students. We will continue to support students in the Living Wage Campaign throughout the year.”
The Living Wage Policy is intended to ensure all university staff are paid a ‘living wage’, in which they are paid the amount to comfortably live on, which is said to be £7.20 an hour.
However, from this month staff over 21 employed by Sheffield Trading Services, which will include the new Endcliffe Village Store and all new casual staff at ACS outlets, as well as venues at the University House from 2013, will be paid at the rates of National Minimum Wage – merely £6.08. Workers under 21 will be paid more than minimum wage, but less than those employed through the old scheme.
Discussions have been ongoing in University Council for many months, with many high-ranking University staff members present including Vice-Chancellor Keith Burnett and several heads of faculty. However, until this time the proposal has been kept firmly under wraps, described in the University Council’s public minutes as simply “the SPV proposal” or “the structural delivery mechanism”.
The document also details ACS’ intention to “increase opportunities for casual work experience”, including apprenticeships, which they claim will assist the local community and students by “enhancing their employability skills.”
Concerns have also been raised about whether this sets a worrying precedent for local pay bargaining, which could see staff paid by local labour market standards rather than by national pay scales. This would leave employees, including Sheffield students, being paid less in Sheffield than they would be elsewhere, for doing the same jobs.
The document states ACS’ intention to reach the “hospitality sector norm” of 40 per cent staffing costs, as opposed to their current 53 per cent, making them a competitor in the hospitality marketplace.
ACS claims establishing Sheffield Trading Services will “facilitate substantial improvements in financial performance”, and consequently improve service and employment opportunities for students. However leading union, Unite, claim this is at the detriment of student welfare.
In a damning statement, Chris Daly, regional officer for Unite said: “Given the University can employ these workers directly, the only reason I can see for the SPV is to employ people on inferior terms and conditions of employment.
The University seems to be determined to drive down pay, access to sick pay and other employment rights.”
Daly continues to say the University have shown no intention to seek the recognition of a trade union, despite having four trade unions on campus and that “this can only be to the detriment of those who work there, I am sad to say that the University of Sheffield has joined the race to the bottom.”
ACS has acknowledged that they do not intend to seek recognition by a trade union, but will instead use ‘Employee Forums’ to “encourage a collaborative liaison approach with staff.”
In a statement to Forge Press, ACS said: “The establishment of Sheffield Trading Services Limited (STS) to operate brand new hospitality and retail services, commencing with a convenience store in September 2012, will enable the creation of new jobs within the city of Sheffield.
“These opportunities are for new staff, offering a comprehensive reward and recognition package that is competitive within the hospitality and retail sectors.
Whilst the casual rate of pay is lower than that offered by the University, it is the same as that available in the Students’ Union and generally slightly higher than other Sheffield hospitality and retail industry employers. In fact, STS is positively offering higher than National Minimum Wage to those under 21-years-old, which is typically not offered by highstreet employers.”
Last year, a story by Forge Press revealed ACS had been forced to pay out tens of thousands of pounds to residential mentors who were paid less than the minimum wage. Later their status was moved from ‘employee’ to ‘volunteer’ to avoid having to pay them the National Minimum Wage.
The full statement by the University is available here: http://forgetoday.com/statements/statement-from-acs/