Electronic copy available at: http://ssrn.com/abstract=2649403

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Workfare Revisited

Amir Paz-Fuchs, Anja Eleveld¥

1. Introduction

On 28th April, 2014, the British Department for Work and Pensions (DWP) announced ‘new

intensive measures to help the long-term unemployed into work’.1 The central plank of the

DWP’s initiative was the Community Work Placement scheme, referred to, mainly by its

opponents, as workfare. Workfare schemes, developed originally in the United States and

Australia, require claimants to ‘work for their benefits’. But despite the use of the term ‘work’

(for benefits), participants in workfare schemes are not, in fact, entitled to the statutory

protections as workers. In this paper we intend to explore and problematize the exclusion of

workfare participants from the scope of employment legislation and to rethink the scope of the

labour protection. As the UK and the Netherlands have been at the forefront of the European

activation turn that catalysed the introduction of workfare programs in European welfare states,

this paper focuses on the employment protection of workfare participants in these two

countries.2 The fact that current workfare schemes in the UK may be extended for up to two

years, and in the Netherlands for up to four years, suggests that they may have a significant

impact on the employment trajectories of many individuals. For example, as we were finalising

this paper, the Guardian reported that an electronic specialist, John McArthur, was let go at the

end of a temporary job and then was ordered to return to the same firm for six months without

pay.3

But one may dismiss such examples as anecdotal and demand a more general response to

the question: why does employment protection for workfare participants matter? In regular

employment relations the employment contract assumes an asymmetry in power relations, which

stems from the inequality in bargaining power. Labour law, therefore, is meant to address this

inequality, if not to annul it completely.4 Relationships between the citizen and the state, on the

other hand, assume a different type of asymmetry in power relations, and a set of legal rights and

¥ Respectively, Senior Lecturer in Employment Law, University of Sussex; Lecturer, Faculty of Law, University of

Amsterdam. 1 DWP, ‘Help to work: nationwide drive to help the long-term unemployed into work’ (London 1 May 2014).

https://www.gov.uk/government/news/help-to-work-nationwide-drive-to-help-the-long-term-unemployed-into-work 2See Anja Eleveld, ‘The duty to work without a wage. A legal comparison between social assistance legislations in

Germany, the Netherlands and the United Kingdom’ (2014) 16 European Journal of Social Security, at 206-207. 3 Shiv Malik, ‘DWP orders man to work without pay for company that let him go’ The Guardian (3 November 2014)

http://www.theguardian.com/society/2014/nov/03/dwp-benefits-electrician-work-placement-

labour?CMP=EMCNEWEML6619I2 4 Guy Davidov, ‘Re-Matching Labour Laws With Their Purpose’ in Brian Langille and Guy Davidov (eds) The Idea of

Labour Law (OUP 2011) 179.

Electronic copy available at: http://ssrn.com/abstract=2649403

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procedures have been developed by parliaments and by courts to safeguard public and private

interests in a variety of scenarios, from environmental hazards to the criminal law. And yet, in

the case of workfare we find a third type of relationship. One that seeks, through the image of

the contract, to escape the clutches of the relationship between the state and the individual. The

asymmetry in these ‘contracts’ is evident when compared to employment contracts.5 It has even

given rise to several human rights based challenge of aligning workfare with forced labour,

suggesting that requiring claimants to work for benefits is tantamount to forced labour, and thus

in contravention of Article 4 of the ECHR. This argument was rejected by the European Court

of Human Rights,6 by American Federal Courts,7 by the UK Supreme Court,8 and by the Dutch

Central Appeals Tribunal.9

Workfare programmes were also challenged through the route of administrative law. This

route was much more successful, but short lived. In the 2013 case of Reilly,10 the UKSC accepted

that the 2011 Regulations were ultra vires sections 17A and 17B of the Jobseekers Act 1995, as

they did not describe the schemes, prescribe the circumstances requiring a person to participate

in the schemes, or prescribe the period of the schemes, as the 1995 Act required. In response,

Parliament introduced new regulations which followed the Courts’ instructions.

We find, then, that between narrow (and thus successful, but short lived) challenge of

administrative law, and the broad, ideological, human rights based challenge of aligning workfare

with forced labour (which never had a chance to succeed) lies a vast terrain that was not

addressed: the substantive area of employment rights and employment relations. Workfare is,

after all, an extremely harsh employment measure. Within the family of human rights violations,

even within the ambit of Article 4 ECHR, it is a far cry from being a serious violation

(incomparable, for example, with the case of Siliadin v France).11 Administrative challenges, on the

other hand, when established, are easy for courts to accept, but also for governments to amend.

Between the two, at the heart of the matter, lie the effect that workfare has on the employment

prospects of the participants, and on the terms and conditions of other workers, who are now in

impossible competition with unpaid labour. It is that gap which we seek to address.

5 Mark Freedland and Desmond King, ‘Contractual governance and illiberal contracts: some problems of contractualism as

an instrument of behaviour management by agencies of government’ (2003) 27 Cambridge J of Economics 465. 6 Talmon v the Netherlands (1997) EHRLR 448; Schuitemaker v the Netherlands (2010) ECHR 820. 7 Brogan v San Mateo County, 901 F.2d 762 (9th Cir. 1990) . 8 R (Reilly and Wilson) v Secretary of State for Work and Pensions [2013] UKSC 68 [‘Reilly’]. 9 Central Appeals Tribunal 8 February 2010, LJN BL 1093. 10 Reilly (note 8). 11 (2006) 43 EHRR 16.

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We are not suggesting that these are unchartered waters. The status of participants in

similar programmes, such as make-work and training programmes, was, to an extent, decided in

the 1980s. And yet, theoretical and judicial developments which are more flexible in their

approach to worker status, and to rights outside worker status, make this discussion worth

revisiting. Moreover, while workfare is analogous to training schemes, the particular

characteristics of participants, of the aims of the schemes, of its traits and of its consequences,

merit special inquiry, which has been absent in the European context.12

We open with the forest: an overview of the general rationales in favour (section two)

and against (section three) workfare programmes. But a concrete analysis demands concrete

information regarding the gap between statutory protection awarded to wage workers and the

terms of engagement that workfare participants are subject to. Such a comparison is offered,

with respect to the UK and the Netherlands, in section four. In section five we critically assess

the reasons why employment status or, at least – employment protection regardless of status, is

not granted to workfare participants; and in section six we highlight the similarities between

workfare participants and wage workers, thus suggesting that accepted doctrine on this matter

should be revisited.

2. Why Workfare? The Rationales

To an extent, workfare in the form of ‘work for your benefits’ has been a staple of benefit

provision since their inception, in the early days of the poor laws. Claimants were sent to Labour

Yards and were required to undertake tasks such as stone breaking, oakum picking, road making,

gardening and boot repairing.13 What is the reason for workfare’s enduring appeal? Though it is

difficult (and possibly overly simplified) to identify one particular reason that animates public

discourse and motivates policy makers, it is possible to outline four interrelated rationales that

have been influential in this respect. These are deterrence, self-realization, enhancing structure

and discipline or human capital, and reciprocity. We shall provide only a brief overview of the

first three, and focus on the latter, which we find most interesting, and most relevant for

contemporary programmes.

12 The US literature has made some interesting contributions to the study of this matter: Noah Zatz, ‘What Welfare Requires

from Work’ (2007) 54 UCLA L Rev 373, Vadim Mahmoudov, ‘Are Workfare Participants Employees: Legal Issues

Presented by a Two-Tiered Labor Force’ (1998) 1998 Annual Survey of American Law 349. Matthew Diller, ‘Working

Without a Job: The Social Messages of the New Workfare’ (1998) 9 Stanford L Rev 19; Vee Burke ‘Welfare Recipients and

Workforce Laws’ (Congressional Research Service Report for Congress, 2004). 13 Desmond King, In the Name of Liberalism (OUP 1998) 242.

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i. Deterrence: The idea here is that workfare is simply one more measure to make

dependence on benefits as unattractive as possible.14 Sidney and Beatrice Webb, for example,

find that Poor Law workhouse was designed so that a person would not be willing to admit

himself ‘except in the direst necessity’,15 while others have identified Labour Yards tasks, such as

those noted above, as designed ‘purely for deterrence’.16 But despite its long history, it would

seem that this rationale is not as persuasive as it used to be, and that contemporary programmes

are at least partly motivated by other principles.

ii. Self-Realization: this moralistic, and blatantly paternalistic, rationale suggests that work

improves the moral constitution of the individual. The workhouse, for example, was seen to

infuse “new life, new energy into the constitution of the pauper; he is aroused like one from

sleep; … He begs a job—he will not take a denial”.17 Its religious antecedents are made clear by

the fact that contemporary versions of this rationale suggest that welfare institutions have

replaced “Christian morality … by affirming right and wrong conduct”.18 Prominent advocates

of welfare-to-work programmes in general, and workfare in particular, routinely view any work

as instrumental towards improving one’s character.19 These critics do not take into account that

jobs in general, and workfare tasks in particular, may be “routine, low-skilled, or mind-numbingly

exhausting [and thus] may fail quite dramatically to offer anything close to self-realization”.20

iii. Structure and Discipline, or Human Capital: This may be viewed as the pragmatic version of

the moralistic rationale just noted. Where long-term unemployed individuals are concerned, there

may be a real need to assist their re-integration into the labour market by encouraging them to

get out of bed, shave, dress up and arrive on time. Instilling discipline and structure through

workfare requirements would thus be instrumental, if not vital, for future workers. While this is

not the place for an extended discussion of this rationale, it is worth noting that many workfare

participants have extensive job experience, and thus have no need for discipline enhancement

measures. In addition, as Noah Zatz explains, while discipline and structure are fundamental for

14 Amir Paz-Fuchs, Welfare-to-Work: Conditioning Rights in Social Policy (OUP 2007) 77-80, 103-104. 15 Sidney Webb and Beatrice Webb, English Poor Law History: Part I — The Old Poor Law (Cass: London, 1963) 243. 16 MA Crowther, quoted in Desmond King, Actively Seeking Work (Chicago University Press 1995) 240. 17 Report from His Majesty’s Commissioners for Inquiring into the Administration and Practical

Operation of the Poor Laws (1834) [the Poor Law Report] cited in King 1999 (n 16 above) 227. 18 Frank Field, ‘A Rejoinder’ in Alan Deacon (ed), Stakeholder Welfare (IEA 1996) 107, 111 19 See, eg, Charles Murray, The Emerging British Underclass (IEA 1990) 23; Lawrence Mead,

Beyond Entitlement (Free Press 1988) 48. 20 Zatz (n 12) 436.

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menial tasks, the modern workplace tends to value other traits, such as creativity, spontaneity,

flexibility, adaptability and risk-taking, which may be viewed as freedom from discipline.21

The European version of this very rationale is couched in the popular terminology of

human capital. Here, we find the idea that workfare should be conceived as vocational training

and non-paid work experience which aims to improve the employability of the workfare

participant in a more substantive way. This human capital approach to workfare is currently

celebrated in welfare state literature.22 However, the question can be raised as to whether people

need years of ‘on the job training’ before they are able to perform (very) low-skilled jobs. In

addition, the research that exists does not provide evidence of the re-integration into regular paid

employment because of a (long-term) participation in workfare.23

iv. Reciprocity, Conditionality and Contractualism: Over the past two decades, political philosophy,

social policy and legal relations between citizen and state have been caught ‘in the grip of

contractual thinking’.24 In many cases, workfare schemes are but the foremost derivatives of the

contractual paradigm. The first scheme that earned the appellation ‘workfare’—the American

Community Work Experience Program - was introduced as part of the JOBS programme,

justification of which, in turn, was presented in the language of contractual obligation.25 In

Britain, the Employment Committee indicated its support for workfare measures, declaring it

appropriate to expect reciprocal activity from benefit recipients on contractual grounds.26

This was apparent in the language chosen: in the UK, ‘A New Contract for Welfare’ was

the title for a series of consultation papers.27 The political rhetoric relating to welfare reform was,

and still is, strikingly contractual, with Conservative ministers in charge of welfare, in particular,

routinely making the case that conditions must be put in place in return for benefits. For instance,

in 2008 the Conservatives, in opposition at the time, claimed that they would ‘not allow anyone

claiming Jobseekers Allowances over a long period to do nothing’.28 And in 2013, the Chancellor

George Osborne, announcing the new Community Work Placements Programme, reiterated the

21 Zatz, (n 12) 433. 22 Anton Hemerijck, Changing Welfare States (OUP 2013). 23 Richard Crisp and Del Roy Fletcher, “A comparative review of workfare programmes in the United States, Canada and

Australia”, Department of Work and Pensions, Research Report No. 533, (London 2008); Brian Kroch Graversen and Jan C

Van Ours, ‘How to help unemployed find jobs quickly. Experimental evidence from a mandatory activation program’ (2008)

J of Public Economics 92; Jonas Maibom Pedersen et al, ‘Experimental evidence on the effects of early meetings and

activation’ (2012) (Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit, No 6970). 24 Virginia Held, Feminist Morality: Transforming Culture, Society and Politics (Chicago University Press 1993) 193. 25 King, (n 13), 275. 26 ibid 239. 27 DSS, New Ambitions for our Country: A New Contract for Welfare (1998); DSS, A New Contract for Welfare: Principles

into Practice; DEE, A New Contract for Welfare: Gateway to Work. 28 Conservative Party, Work for Welfare: REAL Welfare Reform to Make British Poverty History (2008) 34

http://www.conservatives.com/~/media/files/green%20papers/welfare_policy_paper.ashx?dl=true.

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language, proclaiming that “There is no option of doing nothing for our benefits, no something-

for-nothing anymore”. 29 The language found its way from the speakers’ podium to formal

government documents. The Mandatory Work Activity Provider Guidance, for example, states

that “A community benefit placement must be of benefit to the community over and above the

benefit of providing a placement to the individual”.30 In addition, according to the government’s

guidance on Mandatory Work Activity, “There is no work experience element for the MWA

scheme, instead there is a work placement for community benefit”.31 The wording suggests that

the central aim of workfare is not to contribute to the claimant’s chances of finding a regular job,

but rather to coerce her into a reciprocal act for the benefit of the community. Moreover, in a

manner that would be relevant for the discussion that follows, this statement is an express

affirmation of the fact that these schemes are not to be viewed as training schemes, with all the

legal implications that this categorisation implies.

The Dutch workfare schemes, perhaps more explicitly than those in any other country,

manifest a similar agenda. In 2012 the Dutch government introduced the ‘civil community job’

in social assistance legislation.32 The civil job entails a ‘civic obligation in return for the solidarity

people receive from the community’. 33 As the government contended, the principle of

reciprocity is more appropriate in a more participative society in which everyone contributes

according to his or her ability and where citizens take responsibility not only for their own lives,

but also for the society in which they live.34 Hence, the primary goal of civil community jobs is

not to reintegrate claimants into regular jobs, but instead to get them to do something in return

for their allowances. According to the Participation Act which will be implemented from 1

January 2015, the municipalities will be required to develop municipal policy on civil community

jobs.35

3. Principled objections to workfare

The above analysis suggests that workfare signifies a substantive, as opposed to an

incremental, change in the philosophy that governs social policy in general, and benefits in

particular. Although unemployment and subsistence benefits were always conditioned on being

29 Francis Elliot and Philippe Naugthon, ‘No more “something for nothing”, says Osborne on welfare scheme’ The Times,

(30 September 2013) http://www.thetimes.co.uk/tto/news/politics/article3882763.ece. 30 DWP, Mandatory Work Activity Provider Guidance (2014) Ch 1, Annex 1, A1.3 (emphasis in original). 31 DWP, Advice for Decision Making, Ch K3, K3037. 32 Art. 9(1c) WWB2003. From 1 January 2015: art. 9 (1c) Participation Act 2014. 33 Parliamentary Papers II, 2011-12, 32 815, No. 3, at 14-15. 34 Parliamentary Papers II, 2013-14, 33 801, No. 3. 35 Art. 7 (3) Participation Act 2014.

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‘available for work’ or ‘actively seeking employment’,36 workfare embodies a different level in the

contractarian paradigm of citizenship. For this very reason, even proponents of the activation

agenda have viewed workfare as a step too far. Thus, in 2009, the British Secretary of State for

Work and Pensions assured Parliament (and the public) that workfare will not be put in place,

since ‘[w]orkfare is a system whereby people are punished and distanced from the labour market

by removing their entitlement to work search and by stigmatising them’. 37 As such, it is

reminiscent of an earlier structure which ‘gave expression to a dense network of reciprocal

obligations which linked together wage labour, the family and the wider social order’38 – the poor

laws. Deakin and Wilkinson are right to suggest that ‘social security inverted the poor laws’.39

This is made manifest in several ways: by tempering the duty to work at whatever wages the

market provides; by guaranteeing the right to refuse work below collectively bargained wage

rates, thus exhibiting a different understanding of the link between social security and the labour

market; and by viewing unemployment as a ‘problem of the industry’ rather than a matter of

‘personal responsibility’. 40 In all three facets, workfare seems to have reversed the trend,

promoting as it does ‘a new relationship between the state and the beneficiaries of social

policies’.41

But workfare is not only a manifestation of a philosophy. Potentially, it may have serious

implications on individual rights and interests, two of which may be mentioned here: the effect

on wages in the labour market at large; and the implications for the right to freely chosen work.

We address them in turn.

While most workfare programmes, such as those in the UK and the Netherlands,

explicitly forbid replacing workers with workfare participants, there are no provisions that

protect collectively negotiated employment conditions which may be undermined by such

schemes. Addressing the Youth Training Schemes of the early 1980s, Mark Freedland

highlighted this ‘problem of substitution’, voiced most prominently by trade unions. 42

Interestingly, it is noted that those schemes, unlike contemporary workfare programmes, were

agreed to under the acceptance not to undercut collective labour standards. The political

36 Simon Deakin and Frank Wilkinson, The Law of the Labour Market 177-178 (OUP 2005); Mark Freedland et al, Public

Employment Services and European Law 208 (OUP 2007) 37 Hansard, HC Debs, col.192 (January 27, 2009). 38 Deakin and Wilkinson (n 36) 110 39 Id, 149 40 Id, 197 41 Thierry Berthet and Clara Bourgeois, ‘Towards “Actively Friendly Integration”? Assessing the Progress of Activation

Policies in Six European Countries’ (2014) 23 International J of Social Welfare S23, S27, S31; also Deakin and Wilkinson

(n 36) 194. 42 Mark Freedland, ‘Labour Law and Leaflet Law: The Youth Training Scheme of 1983’ (1983) 12 Industrial Law Journal

233.

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bargaining power of unions at the time was incomparably stronger when compared to the

current state of affairs, and they at least viewed themselves as holding veto power over the

decision to roll out particular schemes.

Trade unions do not command similar influence over social decisions today; and while,

formally, contemporary programmes may not include the more obvious substitution (dismiss a

worker; incorporate a participant free of charge) the undercutting of collective labour standards

may proceed in incremental fashion, but may have far more serious, long term effects. Briskin

and Thomas open their article with the example of a meat factory in Joslin, Illinois, where

welfare recipients from California have replaced local, unionised workers who once earned over

twice the pay.43 They later (rightly) observe that a court considering statutory protection of

workfare participants ‘must look at not only the attributes of work, but also the ramifications

that protecting that work in order to sustain the welfare of workers as well as safe and fair commerce

in the labor market’.44 Indeed, assuming that the vast majority of workfare participants will be

assigned low-skill roles (even when they, themselves, have considerable qualifications) the

increase in the supply of low-wage ‘workers’ will have the likely effect of driving down wages in

these sectors.

Could this ‘vicious circle’ 45 be mitigated if courts would assess benefit conditionality in

general, and workfare programmes in particular, against the right to “free choice of

employment”, a component of the right to work?46 Notwithstanding the unsuccessful challenge

that relied on Article 4 ECHR, this argument may be worth pursuing, according to the ILO’s

Committee of Experts on the Application of Convention and Recommendations (CEACR) and

the European Committee of Social Rights (ECSR). Thus, in 2003, the ECSR ruled that while the

obligation to perform civil service does not constitute forced labour, it may amount to a

restriction to earn one’s living in an occupation freely entered upon’.47

In examining the application of Employment Policy Convention No 122, the CEACR

expressed concern that the British Mandatory Work Activity programme falls short of the need to

assure the right to full, productive and freely chosen work, guaranteed under Section 2 of the

43 Craig Briskin and Kimberley Thomas, “The Waging of Welfare: All Work and No Pay?” 33 Harvard CR-CL L Rev

(1998) 559. 44 Id, 570 [emphasis added] 45 Anne Gray, ‘European perspectives on welfare reform: A tale of two vicious circles?’, European Societies 4, 376. 46 For example, Article 23§1 of the Universal Declaration on Human Rights provides that “everyone has the right to work, to

free choice of employment, …”; and similarly – Article 6§1 of the ICESCR; Article 1§2 of the ESC 47 Quaker Council for European Affairs (QCEA) v. Greece, E.C.S.R., Decision No. 8/2000, 25th of April 2001, complaint

No. 8/1999, at [23].

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Convention, and invited the Government to supply more information.48 While some restrictions

on the right to freely chosen work could comply with Article 2 of the Convention, they would

have to increase the participant’s general, real freedom to enter the labour market in freely

chosen work. This, it has been argued, is often not the case.49 The CEACR cited the TUC’s

reservations relating to the programme, which include not only its principled failure to be

considered ‘freely chosen’, but also its implementation. In particular, the TUC notes that the

Government’s own equality assessment shows that is more likely to be applied to older, disabled

and ethnic minority claimants.

Similarly, the ECSR has shown interest in the adverse effect that activation policies may have

on the right to freely chosen work, requesting further information on the implementation of

workfare programmes from the governments of Germany, Italy, Belgium, Luxemburg, Norway

and the United Kingdom. The ESCR’s first efforts to address activation programmes seemed,

according to some, ‘timorous and even underdeveloped’ 50 when compared to the CEACR’s

observations and recommendations. However, after the relevant governments failed to supply

the necessary information by its 2012 control cycle, the ECSR issued a more assertive statement

of interpretation. This statement includes a list of circumstances under which activation schemes

may constitute a restriction to the freedom of work.51 This new approach may suggest that the

systematic analysis of the implementation of activation schemes may lead the ECSR to a more

general ‘potential change in jurisprudence’ which may lead it to revisit its decisions on the

compatibility of these schemes with the right to work.52

But more importantly, it is worth noting that while the ECSR and the CEACR were not

convinced that activation policies in general, or even workfare schemes in particular, are in and

of themselves violations of the right to (freely chosen) work, their facets, including their

duration, the rights of participants, the ease of subjecting them to sanctions and the

consequences of those sanctions – could, when considered jointly, lead to a different conclusion.

This result may add additional weight to the need to further safeguard participants’ rights.

48 International Labour Organisation. Report of the Committee of Experts on the Application of Conventions and

Recommendations (International Labour Conference, 102th session, 2013) 661-662 49 Amir Paz-Fuchs, ‘The Right to Work and the Duty to Work’ in Virginia Mantouvalou (ed) The Right to Work (Hart 2015)

177, 188; Guy Mundlak ‘The Right to Work, the Value of Work’ in Daphne Barak-Erez and Aeyal Gross (eds) Exploring

Social Rights 341 (Hart, 2007); Philip Larkin, ‘The legislative arrival and future of workfare: the Welfare Reform Act 2009’

(2011) 18 JSSL 11, 30-31. 50 Elise Dermine, ‘Activation Policies for the Unemployed and the International Human Rights Case Law on the Right to

Freely Chosen Work’, in Elise Dermine, and Daniel Dumont (eds.), Activation Policies for the Unemployed, the Right to

Work and the Duty to Work 139 (2015). 51 E.C.S.R., Conclusions 2012, Statement of Interpretation of Article 1, §2 of the ESC, December 2012. 52 Dermine (n Error! Bookmark not defined.)

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The previous two sections addressed the general rationales for and against workfare

programmes. We now move to the particulars of the schemes, focusing on British and Dutch

cases. A comparison between the protection awarded to wage workers and the terms that

workfare participants are subjected to is instructive not only in its own right, but also feeds into

the subsequent legal arguments against and in favour of expanding statutory protection.

4. The Schemes

A. The British Workfare Schemes

The British workfare programme is, in fact, an array of different schemes that vary in their

duration, criteria, target population and responsibilities laid on participants. The first

contemporary ‘work for your benefit’ schemes were established by the Welfare Reform Act 2009

[‘the 2009 Act’], which added sections 17A and 17B to the Jobseekers Act 1995. Section 17A

delegated to regulations the power to

(1) … make provision for or in connection with imposing on claimants in prescribed

circumstances a requirement to participate in schemes of any prescribed description ….

(2) Regulations under this section may, in particular, require participants to undertake

work, or work-related activity, during any prescribed period with a view to improving

their prospects of obtaining employment.

The regulations purportedly made under 17A are the Jobseeker’s Allowance

(Employment, Skills and Enterprise Scheme) Regulations 201153 [the ‘2011 Regulations’] which

succinctly (indeed, too succinctly) provided in Reg 2 (‘Interpretation’) that

The Employment, Skills and Enterprise Scheme’ means a scheme within section 17A

(schemes for assisting persons to obtain employment: ‘work for your benefit’ schemes

etc) of the [1995] Act known by that name and provided pursuant to arrangements made

by the Secretary of State that is designed to assist claimants to obtain employment or self-

employment, and which may include for any individual work-related activity …

In other words, the 2011 Regulations made no effort to describe the schemes, to

prescribe the circumstances requiring a person to participate in the schemes, or to prescribe the

period of the schemes, as the 1995 Act (as amended) arguably requires. On this basis, the 2011

Regulations were found by the Court of Appeals and the Supreme Court in Reilly to be ultra vires

53 SI 2011/917.

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section 17A of the 1995 Act.54 In response to the judicial decisions, Parliament repealed sections

17A and 17B,55 and later introduced the Jobseekers (Back to Work Schemes) Act 2013, which

validated the 2011 Regulations retrospectively until the coming into force of the Jobseeker’s

Allowance (Schemes for Assisting Persons to Obtain Employment) Regulations 2013 (‘the 2013

Regulations’). The 2013 Regulations followed the Courts’ instructions, by prescribing the

necessary details for the workfare schemes which, prior to the Regulations, were left to the

discretion of the Secretary of State. The 2013 Regulations included details of seven schemes,

their extent, and the duties required from participants, two of which featured in the individual

claims in Reilly: Regulation 3(6) of the 2013 regulation outlines the sector-based work academy

(sbwa) scheme which may last up to 6 weeks; and Regulation 3(8A) the Community Work

Placements (formerly, the ‘Community Action Programme’), is a placement which lasts up to 30

weeks, in which participants undertake work placements for the benefit of the community and

work related activity”.56 In addition, of special note is the Work Programme (Reg 3(8)) which

may include ‘work placements for the benefit of the community’, potentially for up to two years.

To complete the portrayal, claimants referred to the Mandatory Work Activity (MWA)

scheme, established in 2011 and expanded in 2012, are required to participate in 4 weeks of

placement, of up to 30 hours per week. The MWA scheme was put in place by the Jobseeker’s

Allowance (Mandatory Work Activity Scheme) Regulations 2011 which, following the Supreme

Court decision in Reilly, were challenged on similar grounds.57 This challenge, however, was not

successful, Hickinson J distinguishing the Supreme Court ruling and determining that “the

MWAS Regulations do adequately prescribe the description of the MWA Scheme, and are thus

not ultra vires”.58

B. Workfare Schemes in the Netherlands

In the Netherlands the duty to work without wage was extended for the first time in 1996 when

the social assistance act (Abw) was turned into an activation provision. Social assistance

recipients were encouraged to accept subsidized jobs or voluntary work. In 2004 the Abw of

1996 was replaced by the ‘Work and Welfare Act’ (WWB), which transferred the decision-

making power from the state to the municipalities. Compared to the Abw, the WWB puts even

54 Reilly (CA) at [75] per Sir Stanley Burnton, approved and adopted by the Supreme Court at Reilly (SC) at [48]; see Philip

Larkin, ‘A permanent blow to workfare in the United Kingdom or a temporary obstacle? Reilly and Wilson v Secretary of

State for Work and Pensions’ (2013) 21 JSSL 110. 55 Welfare Reform Act 2012, Schedule 14, Part 4. 56 This scheme was included as an amendment in late 2013: SI 2013/2548. 57 R (Smith) v Secretary of State for Work and Pensions [2014] EWHC 843 58 Ibid, para 26.

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more emphasis on work as a condition of welfare benefits. The obligation to work without pay is

firstly regulated under Article 9(1b) of the WWB, which requires beneficiaries to participate in an

employment programme if this is offered to them as part of their reintegration plan for a period

that usually does not exceed 6 months.59 In 2008 the WWB was amended so as to increase the

maximum period for which social assistance beneficiaries can be obliged to work without wage

to four years.60 Article 9(1c) WWB which was introduced in 2012 reflects the aforementioned

shift to the reciprocity rational as this provision stipulates that beneficiaries can be obliged to

perform non-remunerated activities that serve the community without necessarily being

supportive of the re-integration into regular employment.

The Dutch court has put some limits on the competency of municipalities to send social

assistance beneficiaries to work projects. In 2008 the Court of Arnhem decided that the

obligation to work without wage may be imposed only if work activities are necessary for the

acquiring a regular paid job. 61 The decision should be, above all, a carefully individualized

consideration.62 In practice this means, for example, that there should be a re-integration plan63

and that the municipality investigates whether the client is physically and psychologically able to

perform the job.64 The educational background of the social assistance beneficiary is not relevant,

so placement could be for a position for which a participant is over qualified, with respect to her

background and skills.65 Following the introduction of art. 9 (1c) WWB in 2012, municipalities

may now also send social assistance beneficiaries with recent work experience to work projects.

However, in such cases the length of these activities must be limited and municipalities must take

individual circumstances into account 66 Whereas these latter conditions are not explicitly

stipulated by law, in practice social assistance beneficiaries can be required to work for 36 hours

a week or more without knowing for how long they will be required to perform a specific ‘civil

community job’.

C. Scope of Protection for Workfare Participants – the UK and the Netherlands

Against this background, we ask what coverage do, and should, workfare participants

enjoy? At the outset it is clear that workfare participants in the UK and the Netherlands enjoy

59 Parliamentary Papers II, 2005-06, 30650, No. 3. 60 Art. 10a WWB. 61 Court of Arnhem 8 October 2008, LJN BF 7284. 62 Central Appeals Tribunal 26 April 2011, LJN BQ 3331. 63 Court of Alkmaar 1 November 2012, LJN BY 3327. 64 Central Appeals Tribunal 9 August 2011, LJN BR 7044. 65 Court of Amsterdam 3 July 2008, LJN BD 7134. 66 The Court of Breda has ruled that art. 9 (1c) does not allow for a work week of 32 hours (Court of Breda, 25 February

2013, LJN BZ 5171). In addition, according to the explanatory Memorandum, the civil community job are short-term work

activities for the sake of the community (e.g. snow removal), which for that reason are excluded from the prohibition of

forced labour of ILO Convention no. 29.

13

some projection, in particular in the field of health and safety.67 We highlight some areas where

the disparities between the two categories, in the UK and in the Netherlands, are obvious. These

are remuneration; working time, dismissal and fundamental rights.

Cluster 1 Remuneration: Wages and Sanctions

The most obvious difference between workers and workfare participants concerns pay. In both

countries, workfare participants are not entitled to minimum wage. While this may seem obvious

to most readers, it is worth noting that the American programme, not usually mentioned for its

liberal approach, restricts social service districts to determine the number of hours a participant

may be assigned to a Work Experience Program by reference to a participant’s benefit, divided

by the federal or state minimum wage.68

In the UK, the exclusion of participants from protection is not made explicit in the National

Minimum Wage Act 1998 (in contrast to voluntary workers or prisoners, for example69), but

rather by virtue of (lack of) status: workfare participants are not workers. Similarly, the Dutch

Minimum Wage and Holiday Allowances Act limits the personal scope to employees working in

on an employment contract in accordance with the Dutch Civil Code (7:610).70

What does this difference amount to? At the time of writing, the UK national minimum

wage for those aged 21 and older is £6.50 per hour, or about £228 per week, for a 35-hour work

week. In contrast, income based Jobseeker’s Allowance amounts to £57.35 per week for singles

under 25 and for lone parents under 18; £72.40 for singles 25 or over and for lone parents over

18; and £113.70 for couples over 18. Benefits are, therefore, between one third and one fourth

of the minimum wage.

In the Netherlands, the net minimum wage is equal to social assistance benefits of two

cohabiting adults (€1291.52 per month). This means that a married or cohabiting workfare

participant aged 21 and older earns half of the net minimum wage (€645.76 per month).71 Singles

aged 23 years and older who are on welfare receive 70 per cent of the net minimum wage.72

67 With respect to health and safety in the UK see Simon Deakin and Gillian S Morris, Labour Law (6th ed, Hart 2012), at

175 and in the Netherlands see J Van Drongelen, Arbeidsomstandighedenrecht Deel I Een introductie (Zuthpen 2010) at 97. 68 The U.S. Department of Labor issued a guidance that stated plainly: “[t]he minimum wage and other FLSA requirements

apply to welfare recipients as they apply to all other workers” - U.S. Department of Labor, Department of Labor, Guidance:

How Workplace Laws Apply to Welfare Recipients, 1997 Daily Lab. Rep. (BNA) No. 103, at E-3 (May 29, 1997); Stone v

McGowan 308 F Supp 2d 79 (2004). See discussion in Briskin and Thomas (n 43) 566-568 69 Arts. 44, 45 of the NMWA 1998. 70 Art. 2 Minimum Wage and Holiday Allowances Act. 71 Notice that the other partner also receives half of the net minimum wage. 72 In case single social assistance beneficiaries share their living costs, they may receive only 50 % of the net minimum

wage.

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Hence, whereas a 23 year old (single) employee working fulltime earns at least €1291.52 per

month, a 23 years old social assistance beneficiary on workfare only earns €904.06 per month.

Workfare participants are also far more exposed to sanctions in the form of deductions

when compared to workers. In the UK, section 13 of the Employment Rights Act 1996 provides

that an employer shall not make a deduction from wages of a worker employed by him unless

the deduction is required or authorised to be made by virtue of a statutory provision or a

relevant provision in the worker’s contract, or the worker has agreed in advance, in writing, to

the deduction. In contrast, as of December 2012, jobseekers who do not comply fully with work

requirements are subject to an escalating sanctions regime: for the first infraction, a claimant’s

Universal Credit will be reduced for a period of 13 weeks; if a claimant did not meet another

requirement within 365 days of the first sanction, the reduction will last for 6 months; and if

there were 2 sanctions within 365 days, the third infraction will result in a sanction of 3 years.73 It

should be noted that a private provider is responsible for the initiation of the sanction process,

and a DWP Decision Maker makes the final decision to apply the sanction.74

In the Netherlands, from 1 January 2015, sanctions for misconduct during re-integration

activities will be at the level of 100 per cent of the benefit, and for a length that is no less than

one month, and no more than three months.75 In contrast, an employee’s misconduct will usually

result in suspension with pay.76 Alternatively, a penalty may be imposed if the employment

contract includes an explicit provision to that effect.77 Of course, such penalties are conditional

on the employees’ prior consent.

Cluster 2 Working time

In both the UK and the Netherlands it is unclear to what extent workfare participants can rely

on general Working Time regulations. The Working Time Regulations 1998 in the UK apply

primarily to ‘workers’,78 but are extended to Crown employees, House of Lords and House

Commons staff, the police and members of the armed forces.79 However, the DWP “Provider

Guidance” refers to the Directive (but, notably, not to the Regulations) in a confusing, and

somewhat contradictory, fashion:

73 Jobseeker’s Allowance Regulations 1996 SI 1996/207, reg 69. 74 DWP, Community Work Placements – Provider Guidance (2014) para 3.12.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/314475/community-work-placements-

provider-guidance.pdf . 75 Participation Act (2014), art 18 (4). 76 Art. 7:628 Civil Code. The employer and employee may contractually opt out of Art 7:628 for the first 6 months

(paragraph 4). Collective arrangement may allow a deviation of art. 7:628 Civil Code after 6 months. 77 7:650 (2) Civil code. 78 WTR 1998, reg 2. 79 WTR 1998, regs 36-43. With respect to the latter group, the scope of the regulations is restricted –reg 18(2)(a).

15

The days and hours of the work placement are not prescriptive but they must adhere to the EU

Working Time Directive (2003/88/EC) including requirements regarding rest breaks. This

requirement is imposed because DWP views the directive as useful guidelines on working

time, rather than being legally binding for those placements.80

Whereas the UK does not consider the Working Time Directive legally binding for

workfare participants, the Dutch Working Time Act, which implements the Directive, seems to

apply to workfare participants, as the personal scope of the law extends to all persons working

under the authority of (as opposed to working for) another person. 81 However, neither the

Working Time Act, nor the WWB/Participation Act, explicitly refers to workfare participants.

Moreover, since volunteers are excluded from its scope, 82 and since some effort has been

devoted to the distinction between trainees (who are covered) and volunteers (who are not)83

participants may fall between the two categories.

Even if we assume that beneficiaries are covered by working time provisions, there are

still two important differences between the rights of the employee and the working social

assistance beneficiary in the UK and in the Netherlands. First, whereas employees have a right to

four weeks of paid annual leave in the Netherlands,84 and 28 days in the UK,85 no such right is

stipulated for social assistance beneficiaries. A second difference concerns flexible working time.

An employee who has been employed for at least one year in the Netherlands or 26 weeks in the

UK can request an increase or decrease of her working hours.86 In the Netherlands, the employer

must respond positively unless weighty reasons would oppose this change,87 and in the UK the

employer may refuse only if one of the stated grounds apply.88 These rights are, however, not

available to social assistance beneficiaries. In addition, while employees in the Netherlands and

workers in the UK have a right to short-term leave in case of emergency (e.g. a child has fallen

ill),89 beneficiaries do not enjoy these rights.

Cluster 3 Dismissal

80 DWP (n 74) para 2.10; see similarly DWP, (n 30), para 4.15: “The days and hours of the placement are not prescriptive,

but they should adhere to the Working Time Regulations 1998.” 81 Working Time Act (1995), art 1:1 (2)(b). 82 Working Time Regulations, art. 2.1:2(1). 83 J. Van Drongelen Arbeidstijdenwet (Zutphen 2013) at 41, 48-50). 84 7:634 Civil Act. 85 Regulations 13, 13A of the Working Time Regulations 1998 (UK). 86 Employment Rights Act 1996, s 80F, Flexible Working (Eligibility, Complaints and Remedies) Regulations 2002, reg 3;

Commotion Ltd v Rutty [2006] IRLR 171. 87 In a new amendment it has been proposed to extend the personal scope to employees working 26 weeks for the same

employer. 88 Employment Rights Act 1996, s 80G. 89 Article 5:1 Work and Care Act; Employment Rights Act 1996, s 57A; Qua v John Morrison Solicitors [2003] IRLR 184.

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There is a significant difference between workfare participants and employees with respect to the

extent of protection against dismissals. This seems obvious from a British perspective, where job

security has declined dramatically, and where even ‘workers’, as opposed to ‘employees’, are not

protected against ‘unfair’ dismissal.

In contrast, Dutch civil law and public law offer a fairly elaborate dismissal protection for

workers. The Work and Security Act 2014 reiterated the position that all workers may be

dismissed only for a limited number of reasons. 90 In contrast, workfare participants in the

Netherlands (and, of course, in the UK) are subject to the whims of the provider and/or the

field level worker deciding when a work activity starts and when it ends, which adds to feelings

of insecurity on the part of the workfare participant. In the Netherlands this problem arises in

particular with respect to civil community jobs which do not require the participant to enter a re-

integration contract.

Cluster 4 Fundamental rights: The right to equality and the right to information and consultation

Do workfare participants enjoy protection from non-discrimination on the grounds of sex, race

or ethnicity, religion or belief, disability, age and sexual orientation? Although the UK Equality

Act 2010 makes use of the term ‘employee’, suggesting a narrow personal scope for its

application, its interpretation clause clarifies that the term also includes “a contract of

apprenticeship or a contract personally to do work”.91 And yet, in X v Mid-Sussex Citizen Advice

Bureau, 92 the UK Supreme Court held that volunteers were not protected by the Disability

Discrimination Act 1995. Since the DDA 1995 defines ‘employment’ in a manner that is almost

identical to the wording used by the Equality Act 2010,93 it stands to reason that a similar

conclusion would have been reached with respect to the latter. Moreover, the Supreme Court

held that this interpretation should not be affected to give regard to the European Framework

Employment Directive, since the CJEU repeatedly understood the concept of ‘worker’ to have at

its core the requirement that an individual perform services for remuneration. 94 This

interpretation could possibly be extended to workfare participants, thus excluding them from

non-discrimination protection.

90 This part of the Work and Security Act will be implemented on 1 July 2015 (Stb. 2014, 274). 91 Equality Act 2010, s 83(2). 92 [2012] UKSC 59. 93 Compare s 68(1) DDA 1995 to s 83(1) EqA 2010. 94 Allonby, at [66]; Lawrie-Blum v Land Baden-Württemberg (66/85) [1986] E.C.R. 2121; [1987] 3 C.M.L.R. 389 , 488, at

[17].

17

In contrast, however, the Provider Guidance issued by the DWP instructs the work

programme provider to comply with the Equality Act 2010.95 Though the legal authority granted

to the Guidance remains to be determined, it is at least arguable that, if taken at face value,

workfare providers must not discriminate against participants on grounds relating sex, sexual

orientation, race, religion or belief, disability or age.

In the Netherlands, all those working under the authority of another person fall under

the personal scope of the general Equal Treatment Act (AWGB)96 and other equal treatment acts

(i.e. WGB m/v, WGBH/CZ and WGBL). In principal this means that workfare participants fall

under the scope of equal treatment legislation, which prohibits discrimination on the same

grounds as in the UK. However, participants whose work is classified as volunteer work – which

is odd as they are forced to perform these activities to retain their benefits - may, again, fall

outside the scope of anti-discrimination legislation. In addition, whereas the material scope of

the AWGB notes the period of equality protection as between the start and the end of the

“employment relationship”, it does not include the start and the end of a ‘workfare contract’.

But even if we overcome the preliminary question concerning the application of the

principle of non-discrimination, the practical question of the comparator needs to be addressed.

In other words, can the provider treat participants ‘less favourably’, when compared to workers

who are employed directly by the provider? After all, the relationship between government,

provider and beneficiary is a tripartite relationship, not far distinct from contract, or agency,

workers. 97 And in Allonby, the Court of Appeal and the ECJ rejected the possibility of

comparisons across undertakings. 98 If applied by analogy, this would mean that if workfare

participants are not ‘employed by’ the provider, they have no legal argument for a claim of

discriminatory treatment when compared the provider’s workers.

The right to information and consultation, prescribed by Art. 27 of the Charter, was

applied in the UK through the Information and Consultation of Employees Regulations (ICE

Regs), 99 introduced in 2005. These Regulations give employees the right, subject to certain

conditions, to request that their employers set up procedures to inform or consult them about

95 DWP, (n 60), paras [8.6]-[8.8]; DWP Generic Provider Guidance (2013) ch 2, para [47].

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/304518/pg-chapter-2.pdf. 96 Including wage, working and rest times, work performance [arbeidsprestatie], expenses, one-time grants, other benefits

related to work, pension, clothing requirements, leave, scheduling, health and safety conditions to return to work after

pregnancy leave – Parliamentary Papers II 1990-01 22 014, No 3, at 6. 97 See similarly the application of ‘contract worker’ provisions in a franchising arrangement: Harrods v Remick [1997] IRLR

583, 585-586; and the discussion in Deakin and Morris (n 67) 185. 98 Allonby v Accrington and Rossendale College [2001] EWCA Civ 529 [‘Allonby CA’], at [39]-[46]; Case C-256/01

Allonby v Accrington and Rossendale College [2004] IRLR 224 [‘Allonby ECJ’]. 99 SI 3426/2004.

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changes to the organisation, including the business’s economic situation, its employment

prospects and decisions that will likely lead to substantial changes. The ICE Regs apply to

workplaces of at least 50 employees, and not to workfare participants.

Similarly, in the Netherlands, workfare participants do not have an independent right to

information and consultation granted to employees. Articles 1 and 6 of the Working Council Act

prescribe that employees working for at least 6 months or as temporary agency workers for at

least 24 months in the company may elect workers for working council elections. Employees

working for at least 12 month in the company and temporary agency workers for at least 24

months in the company may themselves be elected. Workfare participants are dependent on the

good will of the working council and/or the employer for their right to information and

consultation. Then, according to art. 6 (4) of the Working Council Act, the employer and the

working council may decide to extend the group of workers who are allowed to elect or be

elected to workers who are not working on an employment contract.

In concluding this section, it is worth repeating that the disparity in the coverage of statutory

labour protection granted to workfare participants when compared to wage workers would not,

of course, be an issue if the former were recognised as ‘workers’. Had that been the case, the

central core of labour rights, including the right to minimum wage, to equal treatment, to

working time protection, and the right to information and consultation, would be awarded by

virtue of the individual’s status. We turn now to address the legal arguments that established this

position.

5. The Legal Arguments Against Employment Protection to Workfare Participants

Can workfare participants be seen as workers? In the UK a series of cases in the 1980s have

seemed to close the door on that possibility.100 These decisions attracted immediate criticism,

which seemed to be focused less on their legal logic, which was well within the confines of the

jurisprudence at the time, and more for the policy implications. Addressing the Youth Training

Schemes, for example, Mark Freedland argued that the administrative scheme and the judicial

decisions created “a kind of second-class employment citizenship in which the young people

concerned engage in work for employers without the benefit of the structure of employment

100 Daley v Allied Suppliers [1983] IRLR 14; Wiltshire Police Authority v Wynn [1981] QB 95.

19

protection legislation which applies to other workers”.101 Similar concerns were expressed with

respect to the Employment Training Scheme, launched in 1988.102

We submit that, over 25 years later, the position that workfare participants are not

awarded certain rights should be subject to a fresh look, for two main reasons. First, the

administration of the current workfare scheme is quite different from the one which governed

training schemes in the 1980s. The layers of outsourcing and subcontracting; 103 the strong

control over the work being done; the fact that the vast majority of participants are adults; and

the possibility of keeping a participant in a role for up to two years – are all traits that may have

legal ramifications. Secondly, the jurisprudential development of a more flexible, purposive

outlook towards the question of ‘who is an employee’,104 alongside the more recent scholarship

that favours guaranteeing rights irrespective of employee status should, we suggest, have an

impact on the rights of workfare participants as well.

The case against employment protection for workfare participants has traditionally

focused on one or more of two central arguments: first, that workfare is akin to training and

work experience, which are distinct from employment; and second, that participants are awarded

benefits from the government, not wages from an employer. We address them in turn.

a. Work (and not training)

In the UK, courts and tribunals in the 1980s had the opportunity to address the

protection awarded to participants in training schemes, and their decisions are unambiguous. For

example, in Daley v Allied Suppliers,105 the EAT held that a trainee under the Youth Training

Scheme could not proceed in her claim for race discrimination since, even if there was a

contract, it was one for training, and not a contract of employment. The dividing line between

the two rests on the fact that the primary purpose of such schemes is to benefit the participant,

and not the employer. This reasoning was followed, and expanded, by a Dutch court: even where

it was clear that a welfare claimant and an employer agreed on an employment contract (and not

a workfare contract), the court decided that the relationship did not constitute an employment

relationship, because such a contract emerges only where the participant performs activities that

101 Mark Freedland, ‘Labour Law and Leaflet Law: The Youth Training Scheme of 1983’ (1983) 12 Industrial Law Journal

220, 230. 102 Nick Wikeley, ‘Training for Employment in the 1990s’ (1990) 53 Modern Law Review 354, 365-366. 103 Larkin (n Error! Bookmark not defined.) 18 104 Most prominently in Autoclenz v Belcher [2011] UKSC 41 105 [1983] IRLR 14;

20

are predominantly for the productive end of the company, and not for the development of the

worker himself.106

This reasoning may be criticised on three levels: analytic, normative and empirical. First,

one may question whether this dichotomy between productive activities for the company

(=work) and activities for the development of the worker himself (= not work) truly holds. Take

the case of James, a first year lawyer in a major law firm. James is trying his best to cope with the

magnitude of the work, but is simply overwhelmed, and is, frankly, a poor employee. However,

at the end of the first year he has undoubtedly improved dramatically, and learned a great deal.

The firm may decide to discontinue his employment, but would it be reasonable to say that,

because he benefited from the work more than the firm, he should be seen as a trainee? Such a

conclusion would seem far-fetched. 107 Normatively, the slogan ‘lifelong learning’, which has

become central in EU social policy, dominates the European discourse on social policy reform,

and implies the importance of the worker’s personal development, thus normatively

incorporating work, education and training.108

And finally, is it really obvious that workfare programmes do not benefit the end users?

The evidence suggests otherwise. Indeed, in one analogous case (work programmes for homeless

people in New York), Judge Sotomayor found that participants filled in for staff employees who

were late or absent, and even required them to work overtime or back to back shifts.109 The court

also noted that that the programme was ‘particularly lucrative’ for the council, generating

revenue of $840,000 a year.110 The court concluded that the Fair Labor Standards Act, and the

duty to pay minimum wage, applies to the programme participants. In the UK, a Freedom of

Information request filed by Boycott Welfare revealed that local councils benefit from more than

half a million hours of unpaid labour through back-to-work schemes, in areas such as cleaning

and rubbish collection, library services, parks department. The councils denied that the

placements were used to replace members of staff, despite the fact that jobs were lost during the

same time frame.111 Moreover, John McArthur’s story, noted in the introduction to this paper,

suggests that there is reason to be sceptical about employers’ adherence to DWP guidelines,

106 Central Appeals Tribunal 23 June 2010, LJN BM 9286; Also see Court of Hertogenbosch 13 June 2006, LJN AX 8905. 107 See a similar example offered to the EAT, and accepted by Elias P as relevant (albeit not sufficiently persuasive in this

case) in Ellis v HM Prison Service EAT (2008) at [81]. There, the plaintiff argued that if a mother wants her son to work, to

stop him from being fickle and idle, that in itself would not suggest that the son is not engaged under a contract of

employment. 108 For example see, Lifelong Learning Programme 20017-2013, Decision No 1720/2006 EC of the European Parliament

and the Council of 15 November 2006, OJ No. L327, 24 November 2006. 109 Archie v Grand Central Partnership, 997 F Supp 504 (1998) 110 Ibid [138]. 111 Shiv Malik, ‘UK councils found to benefit from half a million hours of unpaid labour’ The Guardian (3 January 2014)

http://www.theguardian.com/politics/2014/jan/02/councils-benefit-half-a-million-hours-unpaid-labour-foi-request.

21

which forbid using workfare participants to replace regular members of the workforce. 112

Similarly, in the Netherlands, employers have been accused of using workfare participants for

activities which used to be conducted by paid employees but which jobs has been whittled

down.113

b. Wages (and not benefits)

An additional objection to viewing participants as covered by employment protection

emerges from the fact that the employment relationship, at its core, is a wage-work bargain. In

contrast, in the workfare context, wages are ‘replaced’ by benefits. In Thorpe v Dul, for example,

the EAT found it relevant to state that no monies came from the government to the employer to

cover the cost of remuneration, thus supporting the claimant’s case (albeit not conclusively).114

Should this factor be of importance? Not according to the CJEU, which held, in Birden,

that ‘the fact that the remuneration of the person concerned is provided using public funds’

cannot ‘have any consequence in regard to whether or not that person is to be regarded as a

worker’.115 In that case, the applicant took part in a scheme which included a job sponsored by

the state (Germany) and so – paid for with public funds, with the intention of enabling him to

enter or re-enter the labour market. In short, not dissimilar to the situation of workfare

participants. The CJEU held (and not for the first time) that neither the level of productivity of

the person concerned, nor the origin of the funds from which the remuneration is paid (e.g.

subsidies from public funds) nor the limited amount of the remuneration can be of consequence

as to whether or not the person is a “worker” for the purposes of Community law.116

Recently, the UKSC in O’Brien accepted the CJEU’s instruction according to which the

‘spirit and purpose’ of the relevant directive is to make a distinction between the ‘worker’

category and that of self-employed persons.117 While this was not a case involving workfare

participants, it is worth noting that the Court held that while it is for national law to determine

whether a person has an employment relationship that awards her statutory protection, it “may

not remove at will, in violation of the effectiveness of a Directive, categories of workers from

protection”.118 It is therefore arguable that, at least when implementing EU directives, domestic

112 A similar, American, version of the phenomenon is recounted in Briskin and Thomas (n 43) 589 113 FNV Werken in de Bijstand. Allesbehalve Gewoon Goed Werk, Amsterdam, FNV (2012); FNV Beter Zicht op Werken.

Vervolg op het FNV Zwartboek ‘Werken in de Bijstand’, Amsterdam, FNV (2013). 114 Id. 115 Case C-1/97 Mehmet Birden v Stadtgemeinde Bremen. 116 Case 53/81 Levin [1982] ECR 1035; Case 344/87 Bettray [1989] ECR 1621]; Case C-188/00 Kurz [2002] ECR I-10691,

paragraph 32); and Case C-456/02 Trojani v CPAS [2004] ECR I-7573. 117 Ministry of Justice v O’Brien [2013] UKSC 6, [39]. 118 Id, at [30]

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courts must bear in mind the wider definition, which grants protection to all but those who are

self-employed.

Hence, provided that public allowances are considered remuneration (subsidized by a

public fund), the workfare participants fall under the scope of the directives which have been

adopted under art. 153 TFEU (social and employment law). This may entitle participants to

rights under national measures implementing the health and safety directive, the pregnant worker

directive the working time directive, the equal treatment directives and the information and

consultation directive.

5. The Positive Case for Employment Protection

Addressing the objections to guaranteeing workfare participants employment protection

is necessary, but not sufficient. To complete the case, we need to show that workfare participants

have much in common with wage workers, thus justifying at least partial protection. First,

doctrinally, we argue that the central foundations of the contract and of control are present in

the workfare relationship. The second group of arguments is more principled, suggesting that the

scholarship, case law and legislation of recent years suggests a trend that favours a more

expansive approach to statutory protection, and one that may and should be applied to workfare

participants.

a. The Contract

To those who have not followed workfare programmes closely, it may be strange to note

that an administrative programme has such a strong contractual element. Here it worth referring

to the general discussion on the contractual paradigm that governs workfare programmes

(section 2 of this paper), and highlighting the fact that in Britain, the Jobseeker’s Act 1995 (‘JA

1995’) required, for the first time, that claimants sign a Jobseeker’s Agreement (now the

‘Claimant Commitment’119 (CC)) as a condition for benefits.120 Obvious concerns were raised as

to the degree of true voluntariness exhibited in the contract. Thus, one Member of Parliament

characterized it as ‘an abuse of language in an abuse of power’.121 Now, it is worth pausing to

determining why the insistence on the ceremonial signing of a contract, 122 in the UK and

elsewhere,123 where it is abundantly clear that the lack of bargaining power of welfare recipients

119 Welfare Reform Act 2012, s 14. 120 JA 1995, s 1(2)(b). 121 Hansard col 600 (26 June 1995). 122 Joel Handler, Social Citizenship and Workfare in the US and Western Europe (CUP 2004) 12. 123 Under the American programme, claimants must sign an ‘Individual Responsibility Plan’.

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vis-à-vis the government casts the ‘contract’ between the two as ‘take it or leave it’?124 The reason

is quite clear: positing the relationship between claimants and the government in such a manner

places them in a no-mans-land of statutory protection. But should the insistence on contractual

ceremony not have legal implications?

A claimant who has signed a jobseekers agreement may then be referred to a scheme

provider. As part of the outsourcing agenda, these providers are large, private companies,

including Atos, Ingeus, Seetec, and others. A representative on behalf of the provider then

contacts the claimant, and notifies her where and when her placement is to commence.

Consequently participants are required to sign an ‘Individual Action Plan’ (IAP) with the

provider, outlining the mandatory activities that participants must undertake during their

engagement in the workfare scheme.125 Failure to participate in any activity as mandated by the

agreement may result in the loss of benefits for a certain period (see section 3.C of this paper).

The initiation of the sanction process is delegated to the private provider of the work scheme.126

Could one still object that neither the IAP nor the CC can be construed as a contract? In

the analysis, we can detect three levels of irony in play, all under the heading of ‘trying to have

the cake and eat it’.

First, it may well be that the IAP can be subject to the same criticism, noted above,127

levelled by critics of the Jobseeker’s Agreement at the time, to wit – that to refer to the IAP as a

contract is an “abuse of language”. But advocates of workfare insist that the contract is

meaningful, and not strictly ceremonial. Second, denying the IAP its status as a contract may be

grounded on the argument that it lacks true voluntariness. And, again, the irony is apparent: for

this was the precise argument presented by opponents of workfare who claimed its association

with forced labour, or at least – violates the right to freely chosen work. The former argument, as

noted, was rejected by courts time and time again. Finally, it may be that contracts with

administrative bodies should not be viewed as entailing the same legal consequences as contracts

with private bodies (an argument that dovetails the distinction between wage and benefits,

discussed above). And, again, the decision to outsource the administration of workfare schemes

to private providers – a decision which, again, was subject to criticism by opponents of workfare

– undermines this third objection. If private providers run the schemes, assign responsibilities,

are party to the Action Plans and initiate sanctions – they are significantly distant from the public

administration to undermine this third reservation as well.

124 Mahmoudov (n 12) 378. 125 DWP, Community Work Placements, Section 2.59. 126 DWP, Community Work Placements, Section 3.10. 127 Text to note 121ff.

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b. Subordination and Control

While it is not to be viewed as a ‘mystery ingredient,’128 Dutch and British courts assessing

whether a claimant is a ‘worker’ put much emphasis on the ‘subordination’ test, arguably a

combination of the long used ‘control’ test (performing service under the direction of the

employer129) and ‘economic dependence’ – whether or not the claimant depends on the employer

for her livelihood.130 The question here, then, is whether the services were performed ‘for and

under the direction of another person’.131 Now, even a cursory look at DWP Provider Guidance

for the Community Work Programme suggests that workfare participants have signed a contract

under which they are required to work, obey orders (as relayed to them by the provider and by

the placement-employer) and are acutely dependent on performing their duties for their

livelihood. Indeed, the guidance notes that “Work placements must be supervised, with tasks

similar to those that a claimant might experience in a normal working environment”.132 And

when instructing the participant, the guidance clarifies that she is to “meet the same standards of

behaviour expected of anyone working for the organisation that provides your work

placement”.133

c. The Interpretative Trend

In recent years, legislation, case law and scholarship have all been, to different degrees,

challenging the strict boundaries that constrict statutory employment protection to some

workers, but not to others. This path, originally identified by Bob Hepple,134 was trail blazed by

Mark Freedland,135 and later in conjunction with Nicola Kountouris.136 The new project posits

the ‘personal work relation’ as the central category in labour law, thus doing away with the binary

dichotomy between the contract of service and the contract for services, and the implication of

that dichotomy. A similar approach suggests that, when assessing statutory protection, we must

recognise that ‘each piece of legislation has its own purpose, which corresponds with the general

128 Bates van Winkelhof v Clyde & Co LLP [2014] UKSC 32, at [39], per Lady Hale. 129 Allonby ECJ (n 98) at [67]. 130 Byrne Brothers (Formwork) Ltd v Baird [2002] IRLR 96; Guy Davidov, ‘Who Is a Worker?’ (2005) 34 Industrial Law

Journal 57, 62. 131 Jivraj v Hashwani [2011] IRLR 827; Christopher McCrudden, ‘Two Views of Subordination: The Personal Scope of

Employment Discrimination Law in Jivraj v Hashwani’ (2012) 41 Industrial Law Journal 30, 51; Mark Freedland and Nicola

Kountouris, ‘Employment Equality and Personal Work Relations—A Critique of Jivraj v Hashwani’ (2012) 41 Industrial

Law Journal 56. 132 DWP, Community Work Placements: DWP provider guidance Annex 1 (May 2014) 133 Id, Annex 2 134 Hepple (n 89) 74 asking “whether statutory rights should continue to rest on the foundation of the common law contract

of service”. 135 Mark Freedland, ‘From the Contract of Employment to the Personal Work Nexus’ (2006) 35 Industrial Law Journal 1.;

Mark Freedland, ‘Application of Labour and Employment Law beyond the Contract of Employment’ (2007) 146

International Labour Review 3. 136 Lord Wedderburn, ‘Labour Law 2008 – 40 Years On’ 36 ILJ 397, 411 (2007).

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values that labour laws are aimed to protect and promote’.137 Following this approach, it may be

suggested that equal protection legislation, working time or pay measures, for example, were

intended to protect individuals precisely in the position of workfare participants.

Legislation has played a role in this trend as well. This is made clear in the UK, first and

foremost by the highly relevant, if not immediately applicable,138 fact that the Employment Rights

Act 1996 posits the apprenticeship contract as included within the contract of employment.139

While the traditional definition of apprenticeship would suggest that workfare participants do

not fall within their boundaries, it may also be suggested that the substantive distance between

the two categories does not merit the all (apprentice as employee) or nothing (workfare

participant) legal conclusion. This position is strengthened with the formal introduction of

‘worker’ as an intermediate category, between the self-employed and the employee; and with the

‘bold and radical’140 extension of the continuum in the scope of the anti-discrimination laws of

the 1970s, which (in the language of the Equality Act 2010) to cover all those under a ‘contract

personally to do work’.141 Moreover, legislation has expanded the scope of protective rights to

trainees in areas such as health and safety, working time and, perhaps, equal treatment.142

Finally, the judiciary may be playing its part, if it is willing to accept that a relationship of

employer-employee may have strong training elements, and that the latter does not undermine

the former. 143 Since the courts have considerable discretion when asked to apply statutory

protection, and have adopted, more than once, the approach according to which the scope of

statutory protection should be governed by its purpose, which is ‘to extend protection to workers

who are, substantively and economically, in the same position’, 144 we argue that the general

principles and concrete legal analysis support the expansion of such protection to workfare

participants, if not wholesale, than in particular instances.

137 Davidov (n 2) 180-81; Zatz (n 12) 377; Guy Davidov, ‘A Purposive Interpretation of the National Minimum Wage Act’

(2009) 72 Modern L Rev 581. 138 The contract of apprenticeship is narrowly defined in British law, as one that is for a fixed term, cannot be terminated by

either party, and guarantees particular skills and/or a certificate of completion – see Dunk v George Waller & Son [1970] 2

QB 163. The role played by government bodies also separates apprenticeship contracts from other institutions, such as

training – see Deakin and Morris (n 67) 173 139 Section 230(1). 140 Paul Davies and Mark Freedland, ‘Labor Markets, Welfare and the Personal Scope of Employment Law’ (1999) 21

Comparative Labor Law and Policy Journal 231, 234. 141 Sec 83(1). 142 Respectively: Health and Safety (Youth Training Scheme) Regulations SI 1983/1919, Reg 3; Working Time Regulation

1998, reg 42; Equality Act 2010, s 83(2)(a). The cautious language with respect to equal treatment stems from the fact that

sec 83(2)(a) refers to ‘apprenticeship’, which is narrower than training. However, prior to the EqA, the EAT expanded the

scope of the Race Relations Act even beyond ‘training’ schemes, to include participants in work experience and work

placement programmes - Treasury Solicitors Department v Chenge [2007] IRLR 386 143 Thorpe v Dul [2003] ICR 1571, at [17]; but cf M&P Steelcraft v Ellis [2008] ICR 578. 144 Byrne Bros (n 130) [17].

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6. Conclusion

The traditional association between employment status and access to employment rights has

weakened over the past few decades. Strictly speaking, it was never the case that employees

under the contract of employment enjoy the full range of rights, while those who are not bound

by the contract of employment are deprived of any access to all labour and social security rights.

And yet, for most of the 20th century the contract of employment did form a real boundary that

allowed some, and denied others, access to employment rights. Like many other boundaries and

borders, this has diminished over the past two decades.

This paper outlines the employment law realms that, both the UK and in the

Netherlands, workfare participants enjoy either no protection at all, or considerably less

employment protection compared to regular employees. The principled arguments against

workfare, which include the effect on collectively bargained rates and the impact on the right to

freely chosen work, highlight the social costs that may result by creating a black hole of

employment protection, in the form of workfare schemes. The ‘positive’ arguments in favour of

expanding protection underline the similarities between workfare and wage workers, by reference

to their contracts and to the elements of subordination and control. Finally, we noted that the

legislative trend and the academic scholarship have already overcome the barrier, or perhaps

bridge the gap, between some insiders who enjoy legal protection, and some outsiders who do

not. [Anja – can you include the reference to insiders/outsiders here; it didn’t fit where it was

originally, so I deleted it, but it may fit here? I’ve now lost it]

How can courts fill their role? It is tempting to argue in favour of acknowledging worker

status for workfare participants. But that need not constitute the be-all and end-all of this trend.

The case law concerning the right to freely chosen shows that it is the implementation of the

programmes that may lead them to be perceived as legitimate, or not, in this regard. And the nice

example of American courts taking into account minimum wage restrictions to limit the number

of hours that may be demanded from participants is another original way to implement statutory

protection. It may well be that such challenges will appear before the courts, and one can only

hope that the developing academic structure will allow for imaginative, progressive decisions.