Caso individual (CAS) - Discusión: 2017, Publicación: 106ª reunión CIT (2017)

Convenio sobre la seguridad social (norma mínima), 1952 (núm. 102) - Reino Unido de Gran Bretaña e Irlanda del Norte (Ratificación : 1954)



A Government representative shared information about the welfare system in the country. As the United Kingdom had just held a general election, information could only be provided on the existing welfare law. Further information would be provided in the Government’s report on the application of the Convention in time for the next session of the Committee of Experts in 2017.

In relation to the key findings on Articles 16, 22, and 62 of the Convention concerning the adequacy of benefits, she indicated that her Government believed that its welfare safety net was adequate and that it balanced the requirements of a sustainable and affordable welfare system that supported the most vulnerable in society. Contribution-based benefits for unemployment and sickness represented one part of the overall welfare system, which included a mixture of income-related and social assistance benefits, such as housing benefits and tax credits. The main rates of the contribution-based Jobseekers Allowance and contributory Employment Support Allowance provided an income supplement to those who were not in employment. Additional support was available for those on low incomes and with limited capital. Moreover, the welfare system was based on the circumstances of those in receipt of benefits and targeted at those most in need. When assessing the adequacy of the welfare system, it was important to consider the support system as a whole.

The Committee of Experts had made comments on the inclusion of Child Tax Credits (CTCs). The CTCs were not actually a form of social assistance, but rather a form of social security. They were in the scope of the Convention and should therefore be included by the Committee of Experts in the relevant calculations when next considering compliance with the Convention. It was worth noting that many of those claiming the contribution-based Jobseekers Allowance and Employment Support Allowance were also claiming other benefits such as the Housing Benefit or Personal Independence Payment. Regarding the request of the Committee of Experts to undertake an actuarial study, she indicated that the Government regularly undertook assessments of the benefits it provided, including of the various income-related and social assistance benefits available for those on low incomes and with limited capital. Those studies indicated that working age contributory benefits along with income-related and social assistance benefits for those of working age accounted for almost 3 per cent of the GDP of the United Kingdom in 2016. Detailed explanations concerning the welfare system in the United Kingdom would be provided in response to the comments of the Committee of Experts.

The Worker members recalled that social security was one of the principal institutions that had emerged during the 20th century. For workers, it represented one of their greatest achievements and an extremely valuable heritage in that it expressed the spirit of the Declaration of Philadelphia and represented a tool for combating poverty anywhere, which constituted a danger to prosperity everywhere. Social security represented an act of civilization affirming that a truly modern society could not accept that men and women should be deprived of protection and be exposed to risk and need. The case of the United Kingdom indicated the extent to which these concepts and principles needed to be recalled and emphasized, including in the most industrialized countries, where social security had represented, and still represented, a major achievement in protecting workers from the changing fortunes of life, particularly by providing them with an income when they were out of work. Indeed, the importance of social security systems was not in question. A more common subject of discussion was the methods and means used to achieve the objective of such systems, and the extent to which these were attained.

In this regard, Convention No. 102 was a particularly original instrument, which established an internationally accepted definition of the very principle of social security by fixing the objectives to be achieved, not only the means of implementation. It established a minimum obligation for States in terms of results, and the Convention made it possible to measure progress attained on the basis of the specific results achieved. Another important feature of the Convention was that it was very flexible and offered a broad range of options and “flexibility clauses”, enabling its progressive implementation according to economic development. Moreover, each country had the possibility of combining contributory and non-contributory benefits, and public and occupational systems, so as to ensure the guaranteed minimum standard of protection. It had served as a model for the European Code of Social Security, a Council of Europe instrument which incorporated the minimum standards established by the Convention as its initial basis, the application of which was monitored by the Committee of Experts, thereby bearing witness to the independence, impartiality and objectivity of the latter.

The social security system in the United Kingdom was based on three levels: contributory benefits, income-based benefits, and various tax credits and means-tested social assistance benefits providing additional protection against poverty. This last aspect of social protection had recently been reformed, as a result of which all tax credits and means-tested social assistance benefits had been merged into a system known as “universal credit”, which was considered to be a social assistance benefit rather than a social security benefit, and did not therefore fall within the scope of the Convention. Even though a member State was free to declare benefits provided by the national social security system for which it accepted the obligations arising out of each part of the ratified Convention, this flexibility did not authorize a Government to claim that social assistance benefits did not fall within the scope of the Convention, because Article 67 of the Convention had been specifically included in order to assess whether the rate of such benefits was sufficient to meet the requirements of the Convention. The Committee of Experts had noted that the United Kingdom, by not taking account of the benefits constituting the “universal credit”, was in violation of the Convention with respect to sickness benefit, unemployment benefit and survivors’ benefit. The second point of the observation concerned the fact that contributory benefits did not reach the EUROSTAT at-risk-of-poverty threshold. The Government seemed unconcerned, as in its reply to this comment it considered that the social security net was “adequate”. However, a policy that sought to keep the basic living standard of persons who were receiving benefits and were not working below the absolute poverty threshold had the effect of using social security as a financial means of coercion towards employment. This kind of policy was a thing of the past and was incompatible with a modern vision of social security, one of whose objectives was precisely to prevent or reduce poverty.

Even though these remarks had been made in the context of the European Code of Social Security, they were still fully relevant to the present discussion and the Government should be called upon to perform the necessary calculations to establish the cost in terms of percentage GDP that would result from increasing these benefits so that the United Kingdom met its obligations. It should be noted that the “universal credit” system might prove insufficient to ensure the persons concerned a decent income since, according to the latest estimates, the reform would result in a reduction in income for a larger number of households (3.2 million) and would benefit fewer households (2.2 million). An alarm bell was sounding which needed to be taken seriously. The new forms of work and the proliferation of precarious situations needed to result in the strengthening, not weakening of social protection. The Government was therefore called upon to take the necessary steps to prevent this country, which had been the second to ratify Convention No. 102, from offering a terrible example of its application today.

The Employer members welcomed the Government’s announcement that it would report more fully on the application of the Convention in time for the next meeting of the Committee of Experts, including information on the ongoing revision of the social security system. They welcomed the inclusion of this technical Convention among the individual cases to be discussed by the Conference Committee. The Convention had been adopted by the International Labour Conference in 1952 and had been ratified by the Government in 1954. The United Kingdom had accepted Parts II–V, VII and X of the Convention. The Committee of Experts had considered the application of the Convention by the United Kingdom seven times since 1995, including in its most recent observations in 2016. This was the first time that the application of the Convention by the United Kingdom was examined in the Committee.

The Convention was lengthy and complex, which could also be said about the comments adopted by the Committee of Experts. The Employer members wished to emphasize that the role of the Committee of Experts was to make observations on the application of ratified Conventions – in the case at hand, exclusively on Convention No. 102. The Committee of Experts’ reference to other binding or non-binding instruments (including the European Social Code of Social Security and the European Social Charter) as well as to the assessment of the Committee of Ministers of the Council of Europe had created confusion as to the standards against which the Government was being assessed. They understood that there was an agreement between the ILO and the Council of Europe. However, the application of the European Code of Social Security was subject to a reporting mechanism to the Council of Europe. The mandate of the Committee of Experts in relation to the foundational work of this Committee was the basis on which Conventions had to be assessed. The assessment of the requirements of Conventions should be carried out in a clear and transparent manner. However, the manner in which the current observations of the Committee of Experts were drafted created confusion, partly because the Committee of Experts had referred to the Code and the Convention interchangeably without providing an explanation about “the Code” and why it was referenced. They expressed the hope that the Committee of Experts, in order to ensure that the ILO supervisory system was transparent and user-friendly, would take these points into consideration.

Concerning the obligations pursuant to the Convention, the Employer members noted that two main issues had been identified by the Committee of Experts which required further response from the Government. The first was whether non-contributory benefits fell outside the application of the Convention, and whether social assistance benefits fell within or outside the scope of the Convention. The second issue was whether or not the level of benefits fell below the minimum obligation under the Convention. Depending on the outcome of the first issue, an analysis of the second would be necessary. It would be helpful to know which minimum wages applied to be able to examine more fully the obligations under the Convention. In addition, the Employer members noted that the Government, in designing social benefit levels, had sought to find a balance between effective benefits on the one hand and incentives to work on the other. They had understood the Committee of Experts had to be critical of this motivation as being outdated and unreasonable. The position of the Employer members was that striving to maintain a balance between effective benefits and incentives within a sustainable system was in fact a legitimate and reasonable goal for the Government. The Convention was a flexible instrument and, in the view of the Employer members, allowed for such considerations to be made. They concluded by stating that they looked forward to the additional information and data to be provided by the Government before the next session of the Committee of Experts to enable a clearer understanding of compliance with the Convention.

The Worker member of the United Kingdom stated that current social security benefits in the United Kingdom had failed to meet the minimum requirements of the Convention. Recognizing that the Conference Committee’s consideration of the record on social security in the United Kingdom was not best timed in light of its proximity to the general election, she clarified that underlying the technical issues raised in this case were inadequacies in the existing social security provisions in the United Kingdom.

She drew attention to four areas of concern. First, the current social security benefit did not provide an adequate safety net for the most vulnerable in society, and failed to even meet the lowest EUROSTAT at-risk-of-poverty threshold of 40 per cent of median equalized income in the United Kingdom and in the European Union as a whole. The findings of the Committee of Experts had indeed been supported by the latest national statistics, which had confirmed that 70 per cent of working-age adults in working families were living in poverty. In addition, the value of out-of-work benefits had also failed to keep pace with earnings, with unemployment benefits falling from about 20 per cent of average earnings in the 1970s to less than 15 per cent at present. Second, although the Committee of Experts in their conclusions focused on out-of-work benefits, the United Kingdom was currently experiencing record levels of in-work poverty with more than 7 million people, including 2.6 million children, facing poverty despite being in a working family. Third, she stated that no attempt was being made to improve the provision of social security. Instead, recent government proposals had sought to cut the level of protection in future years, with many working-age benefit rates due to be frozen until 2020 and with reduced support for families with children envisaged. In this context, she drew attention to the introduction of Universal Credit in the United Kingdom, which would be significantly less generous than existing tax credits, with cuts to the proposed level of work allowances. Fourth, the social security system had failed to keep pace with changes in the labour market of the United Kingdom, in particular to increase in insecure forms of work such as zero-hours contracts, agency work and the emergence of online platform work (the so-called “gig economy”). Those in insecure work were significantly more likely to qualify for in-work benefits due to their low rates of pay, but such workers faced serious difficulties in accessing benefits due to the fluctuating nature of their working hours.

In addition, the current tax system in the United Kingdom might create incentives for employers to increase their reliance on forms of insecure work in order to reduce costs and avoid liability for employment-related taxation, in the form of national insurance contributions. Employers might also reduce their tax liabilities by employing individuals on a self-employed basis or even misclassifying workers as self-employed. She also addressed the question of the interpretation of ILO Conventions raised by the Employer members, referring to the mandate of the Committee of Experts as agreed by the social partners in February 2015 and March 2017. The agreement confirmed that the Committee of Experts could undertake an impartial and technical analysis of how Conventions were applied in law and practice by member States, while being cognizant of different national realities and legal systems.

In conclusion, the speaker called on the Government to take all steps necessary to comply with the Convention, including increasing the levels of benefits. The Government, in consultation with national social partners, should carry out a review of existing social security arrangements with a view to alleviating poverty levels, assessing whether existing rules incentivize the use of insecure work and ensuring that all working people benefit from effective social protection. The findings of such a review should be communicated to the Committee of Experts.

The Employer member of the United Kingdom requested the Committee to take into account the current situation in the country as a result of the elections that had been held only one day prior to the discussion of the case in the Committee. Following the dissolution of Parliament and until the formation of a new Government, civil servants could not take any action or make any announcements that showed affiliation to a political party (so-called “Purdah” rules), which necessarily restricted what the Government could do with regard to the case before the Committee. In the future, the Committee should take into account the existence of national elections to form a government when selecting countries for supervision, due to the clear risk of prejudice to the country concerned, especially those countries with rules similar to the “Purdah” rules. The Employer members of the United Kingdom had not sought the supervision of this case.

Moreover, given that the Committee of Experts had agreed to examine the European Code of Social Security, urgent clarification was required as to whether the social partners were expected to make future observations not only on the application of the Convention, but also on the Code. Clarification was also required regarding the status of the Technical Notes prepared by the Office concerning the state of application of social security provisions of the international treaties on social rights ratified by the United Kingdom. The observation of the Committee of Experts included references to the European Code of Social Security and the European Social Charter, in accordance with the arrangements between the ILO and the Council of Europe. However, the mandate of the Conference Committee was limited to supervision of ILO Conventions and Recommendations only, and the Government had been placed on the shortlist only with respect to the Convention. It was not the Committee’s mandate to supervise the observation of the Committee of Experts in respect of the European Code; this was the role of the Council of Europe. While understanding the logic of having a coherent analysis of the European Code and the Convention, the dual observation made by the Committee of Experts rendered supervision of the application of the Convention challenging.

At the time of the entry into force of the Convention in 1955, the Employers’ group had highlighted that the option of choosing branches of social security was incompatible with the principle of specific and comparable obligations in the ILO Constitution, and that there should be different Conventions for each branch of social security. As more than 60 years had passed, the supervision of obligations established in 1955 against national circumstances in 2017 was clearly unsatisfactory. He therefore questioned the up-to-date status of the Convention and whether it should be the subject of the Standards Review Mechanism process.

The Committee of Experts had observed that current sickness benefits, unemployment benefits, and survivors’ benefits fell below the permitted level prescribed in the Convention. He understood that the Government had disagreed on this point, insisting that social assistance benefits were not social security benefits and therefore should not be included in the calculation of overall protection levels. There was thus a clear conflict of interpretation; the Experts appear to concede that social assistance benefits fall out of the calculation, which was of concern because the Experts should not determine the meaning of the provisions of the Convention and then apply them. While anticipating that the Government would consider the Committee of Experts’ comments, which provided non-binding guidance, and this Committee’s conclusions in respect of Convention No. 102 only, he emphasized that the Government could balance its social security scheme in a manner determined at the national level while respecting its international obligations.

The Worker member of Australia indicated that the most significant shift in the world of work was the rise of precarious employment over the last two decades. In 2011, it was estimated that half of all jobs worldwide were considered precarious. The exponential rise in precarious employment posed a series of challenges for social security schemes. For example, where the scheme was based on a model of full-time, permanent work, it could exclude precarious workers when they were unemployed, sick, disabled, or in retirement. Even when precarious workers were formally protected, the lack of continuity in employment might result in inadequate coverage or limited benefits during unemployment and retirement. Gaps in social protection of this character led to further precariousness, as workers were forced to enter unregulated forms of employment in order to survive. This was not consistent with the obligations under the Convention.

It was therefore vital for governments to review social security arrangements to ensure that social safety nets provided the support necessary for workers in precarious or insecure employment. The level of insecure work in the United Kingdom suggested that some analysis and review should be undertaken to ensure that these workers were protected by social safety nets. The number of workers in the United Kingdom in positions where they could lose their jobs at short or no notice had grown by almost 2 million in the past decade. More than one in ten workers now faced precarious employment conditions. Half of the biggest group of precariously employed workers, the self-employed, were in low paying jobs, and took home less than two-thirds of average earnings. Two million self-employed people now earned below £8 per hour. The social partners in the United Kingdom should therefore undertake a review of the social security system to ensure that the growing numbers of insecure workers were adequately catered for by the social security system.

The Worker member of France considered it essential to recall the provisions of the preamble to the ILO Constitution and the Declaration of Philadelphia, which affirmed that universal and lasting peace could be established only if it were based upon social justice, and that poverty anywhere constituted a danger to prosperity everywhere. The Committee of Experts considered the level of unemployment benefits to be well below the minimum rate guaranteed by the Convention. Independent research carried out by the Joseph Rowntree Foundation showed that claimants of unemployment benefit had an income that was far below the minimum standard at which people could live under acceptable conditions, meet their basic needs and participate in society. The latest official statistics showed that 70 per cent of adults of working age in unemployed households lived in poverty (defined as less than 60 per cent of the median income after deduction of housing costs). Young adults received a particularly low level of benefit. In 2016, a single person of working age claiming unemployment allowance received 39 per cent of the income required for a basic standard of living. This allowance had decreased by 41 per cent since 2010. Couples with children received 61 per cent of the standard minimum income, or 62 per cent less than in 2010. The rates and terms of unemployment benefit had been amended by the austerity reforms, which had contributed to the impoverishment of the population. The press reported over 2,000 food banks in the United Kingdom that provided three meals per day for 1.1 million persons living in conditions of extreme poverty, including 436,938 children. The rising numbers of people dependent on food banks showed that poverty levels had increased, partly due to the system for calculating unemployment benefits, which was reducing benefit levels to next to nothing. Combined with the drastic rules governing entitlement to unemployment benefits (for example, requiring persons to carry out 35 hours of job search a week at the job centre, and taking away the benefits of those who arrived over ten minutes late for their job centre appointments), the situation of the unemployed was extremely precarious. Austerity policies were not only completely at odds with the provisions of Part IV of the Convention, but they also ran counter to the ILO’s founding texts, which affirmed that “poverty anywhere constitutes a danger to prosperity everywhere” and that “the war against want requires to be carried on with unrelenting vigour within each nation, and by continuous and concerted international effort in which the representatives of workers and employers, enjoying equal status with those of governments, join with them in free discussion and democratic decision with a view to the promotion of the common welfare”.

An observer representing the International Transport Workers’ Federation and the AFL–CIO emphasized that, in current times, the protection provided in the Convention was needed more than ever. The number of self-employed people in the United Kingdom had grown by 26 per cent over the last decade to 4.8 million, with 1.7 million estimated to be receiving earnings lower than the national minimum wage. An ever-increasing number of workers were misclassified as independent contractors, as many companies in the gig economy did not recognize the existence of employment relationships with their workers, thus depriving them of their rights, including those relating to social security entitlements. National courts had recognized this in some cases, finding that workers had been wrongly classified as self-employed. The British tax authority also stated that it would take all necessary steps to ensure that companies who wilfully misclassified their workers would pay the appropriate social security contributions. The speaker called upon the Government to clarify the law so as to deter the misclassification of workers in the gig economy by strengthening remedies and enforcement against misclassification, as well as establishing a strong statutory presumption of employee status. In terms of social protection, rather than redesigning the social security system to accommodate ever-increasing flexibility for employers, the Government should minimize insecurity at work. Even if platform-based drivers were classified as “workers”, they were often considered self-employed for tax purposes. Additionally, in terms of Universal Credit, it was unclear whether a “worker” would be considered as a self-employed independent contractor or as an employee. The Government had to act urgently to ensure that platform workers were adequately covered by the social security system. In this respect, he called on the Government to conduct a tripartite review of the social security system and to consider novel solutions, including the strengthening of government-managed or worker-negotiated portable benefits, in order to ensure that workers in the gig economy were given the social protection they deserved.

The Worker member of Sweden speaking on behalf of the trade unions of the Nordic countries, agreed with the observation of the Committee of Experts that the level of social security in the United Kingdom was significantly low and did not meet the minimum rates required by the Convention. There was a wealth of evidence that those on sickness benefits in the United Kingdom fell well below a minimum income standard required to provide individuals with a decent standard of living. The social security system provided for different forms of benefits for those unable to work due to sickness, subject to different qualification criteria. There were serious problems with these benefits: (i) the level of statutory sick pay was low; (ii) those in low-paid and insecure work were at risk of losing out on statutory sick pay; (iii) the entitlement was income-related and employed workers had to earn £113 per week to qualify; (iv) those employed in insecure work, including zero-hours contracts and agency work often lost out because they did not earn enough to qualify; and (v) statutory sick pay only applied from the fourth day of sickness.

The speaker deplored the fact that, despite concerns that the existing level of benefits contributed to high poverty levels, the Government had introduced further cuts in 2017. Workers receiving the Employment and Support Allowance, who were expected to be able to return to work within a rather short time, had had their benefits cut by nearly 30 per cent since April 2017. While the Convention provided for the progressive increase in the level of social security, developments in the United Kingdom seemed to go in the opposite direction. Regarding the comments made by the Employer members of the United Kingdom concerning the status of the Convention, she recalled that, although the Convention had been adopted in 1952, the case at hand had proven that the Convention and its application were very much needed for leading a life in dignity in case of illness. She therefore urged the Government to adjust the national legislation to meet the requirements set out in the Convention.

The Government representative thanked the Conference Committee for its careful consideration of the issues raised by the Committee of Experts and of the information submitted by her Government. She affirmed that her Government had taken due note of all the questions and comments made, and undertook to address these, as appropriate, in the report to the Committee of Experts.

The Employer members noted that the submissions of the Government had been brief in light of the national circumstances surrounding the recent elections. They encouraged the Government to provide the required information to the Committee of Experts, including the requested statistics to enable it to better analyse the situation concerning the application of the Convention by the United Kingdom. They looked forward to further consideration of the application of the Convention, once this information had been submitted.

The Worker members referred to a number of views expressed during the discussion to the effect that the Convention had become “obsolete” and considered that, if every country that failed to comply with a Convention used this argument, no Convention would be given effect. They also considered it useful to recall that the Social Protection Floors Recommendation, 2012 (No. 202), reaffirmed the importance of Convention No. 102, indicating in its preamble that these standards were of continuing relevance and continued to be important references for social security systems, and encouraging more ratifications of this up-to-date Convention. As reaffirmed during the last meeting of the Standards Review Mechanism in October 2016, the ratification of the Convention was encouraged. They added that the mandate of the Committee of Experts was described in detail in its report, and was recognized by employers and workers. In the case of the United Kingdom, the Committee of Experts had merely recalled the existence of Article 67 of the Convention and the meaning of this provision, based on the preparatory work. This examination concluded that the significance of this provision was beyond question. The only point worthy of attention was the violation of the Convention by the United Kingdom and the fact that the Government should be called upon to take the necessary measures to come into compliance with the Convention. This required a review of the current social security system, in consultation with the social partners, with the aim of substantially reducing poverty levels through an increase in social security benefits, and ensuring that the current system did not lead to an increase in precarious forms of work, but instead guaranteed sound and effective social protection for all workers. It was vitally important for the Government to give priority to this case, as the issue of poverty and lack of protection could not be left unanswered. Social cohesion and the balance of society as a whole were at stake.

Conclusions

The Committee took note of the information provided by the Government representative and the discussion that followed.

The Committee encouraged the Government of the United Kingdom to transmit to the Committee of Experts the additional information requested, including the relevant statistics, in order to enable the Experts to make a fresh evaluation of the application of the Convention in the country.