By Martin Buttle, Head of Good Work, ShareAction

On the eve of the Covid-19 pandemic, some five million people were in low-paid, insecure work.

That’s millions of people with no guarantee of work, no minimum set hours, no sick pay and few employment rights.

And as the virus sent shockwaves through our communities and our economy, these vulnerable workers were, inevitably, hardest hit.

Read our investor briefing on 'Insecure Work in Insecure Times' >>

Insecure work & Covid-19: Exposing the rift in our economy

Like many crises before it, Covid-19 was far from the “great leveller”. Instead it exposed a fragile economy built on the shoulders of low-paid, insecure workers – with young, older, female and black and ethnic minority workers bearing the brunt.

Lower paid workers – many of who are now classed as ‘key worker’ roles – are much less likely to be able to work from home. They could not afford not to work. And so, they put themselves at risk.

Not classed as employees, many are ineligible for sick-pay – leaving them the impossible choice of going to work sick or going without. For those having to cover childcare as the schools shut, there was even less support.

And where working was not possible, companies effectively offloaded the costs of social security to the tax payer, through the government’s furlough scheme, self-employment income support scheme and benefits.

One in four UK workers are thought to have been furloughed, while in the first month of lockdown the number of people claiming unemployment benefit rose by 850,000.

The consequences of failing to protect workers through the pandemic

As the country headed into lockdown, some companies did stand above the rest, moving to protect their employees. But many more, such as pub chain JD Weatherspoon, refused to pay staff prior to the government’s furlough scheme coming into place – instead urging them to take a job at Tesco.

Following a huge public backlash, the company took a U-turn just days later.

Similar can be seen across companies’ supply chains where some,like Taylor Wimpey, took moves to support suppliers and contractors, but others cancelled contracts – outsourcing the risks to their supply chains.

Companies have also faced pressure over the protection given to those still working. Amazon, for example, faced lawsuits in both Europe and the US for not doing enough to prevent the spread of Covid-19 in its warehouses.

Online food delivery platform Deliveroo faced similar criticisms for failing to protect its staff – with MPs writing to the company to urge it to not only provide staff with personal protective equipment (PPE) but to pay full pay for those that fall sick.

Meanwhile, fast fashion chain Boohoo is also under the spotlight after workers at its Leicester based supplier were paid as little as £3.50 an hour, forced to work while furloughed and not given the proper equipment to guard against the virus.

With its reputation in tatters and with huge questions to answer, Boohoo’s share price plunged, some £1.5 billion was wiped off the company’s market value in just two days. Investors have divested from the company including Aberdeen Standard who sold off £27 million shares.

An economy in crisis: Is the worst yet to come?

While the immediate impact of Covid-19 have already revealed fatal flaws in an economy deeply reliant on insecure workers, the worst could still be to come.

The Bank of England, the OECD and the IMF have all warned of a contraction to the UK economy this year – pushing the country into recession.

During the UK’s last recession hundreds of thousands of workers were driven into insecure, low paid jobs. Some 1.5 million more people were in these jobs in 2013 than in 2008 – suggesting many of those returning to the workforce, or joining it for the first time, did so into precarious employment.

As unemployment rises, the threat is that insecure work will once again explode.

A failure to do things differently this time, could lead to an even greater numbers of people exposed to economic, health and well-being risks associated with a lack of secure employment.

It is vital that companies, and those that invest in them, find a way to ‘build back better’ this time around.

The case for worker protection

A country that clapped for ‘key workers’ is unlikely to forget how these workers were treated during the pandemic.

We’ve already seen both the legal and reputational costs for companies that put their profits before the welfare of staff – and this is only likely to grow as we emerge out of the virus.

A failure to take a long-term approach to staff has left companies vulnerable during the crisis. As they look to recover, investing in their workforce will be vital to limit employee turn-over, boost productively and ensure their reputations remain intact.

Business-as-usual will no longer be an option.

Companies and investors alike will need to redefine their social purpose, or face the public backlash, protests and boycotts that come.

Building a secure future for workers – the role of investors

We are already seeing growing investor interest in how companies treat their workers – particularly on the issue of wages.

But the impact of insecure work has been laid bare by the pandemic. Investors need to look afresh at the issue and expand the view of decent work beyond just pay.

In the immediate term, it is vital that female and ethnic minority workers are not disproportionately impacted by on-going furloughs and redundancies – and that the right data is collected to monitor and act on this.

As we look to recover from this pandemic, investors and their investee companies, have the opportunity to redefine the standards for what decent work looks like – to build back better than before.

This includes a minimum standard for contracted hours, a contract that reflects hours worked, and more notice of shifts allowing workers to plan.

And while all workers deserve a fair days pay for a fair days work – this means a real Living Wage - they should also receive the benefits, such as sick pay, to support them through the unexpected.

With growing evidence that those companies behaving in a responsible way will deliver stronger, long-term returns, there is little reason for inaction.

Consumers and society will expect nothing less.

Read our investor briefing on 'Insecure Work in Insecure Times' >>