The Experience of Ethnic Minority Workers in the Hotel and Catering Industry: Routes to Support and Advice on Workplace Problems

The Experience of Ethnic Minority Workers in the Hotel and Catering Industry: Routes to Support and Advice on Workplace Problems A Review of the Issues Working Paper 1 Tessa Wright Anna Pollert Working Lives Research Institute London Metropolitan University July 2005

Introduction... 2 Outline of project methodology... 4 1. Ethnic minority employment in the UK... 6 1.1 Definitions... 6 1.2 Ethnic minorities in the population... 6 1.3 Labour market participation... 7 1.4 Evidence of discrimination... 9 1.5 Equal opportunities policies... 11 1.6 Government policy... 11 2. The employment of migrant workers in the UK... 12 2.1 Definitions... 12 2.2 Migrants in the UK... 12 2.3 Labour market participation... 13 2.4 Evidence of discrimination and exploitation... 13 2.5 Government policy... 15 3. The hotel and catering sector... 17 3.1 Economic characteristics... 17 3.2 Labour market characteristics... 18 3.2.1 Overview... 18 3.2.2 Gender segregation... 19 3.2.3 Labour shortages and the Work Permit Scheme... 20 3.2.4 Regional breakdown... 21 3.3 Conditions of work... 21 3.3.1 Agency work... 22 3.3.2 Pay... 23 3.3.3 Working hours... 24 3.3.4 Working environment... 24 3.3.5 Training... 25 3.4 Trade unions... 25 3.5 Industry bodies... 25 4. Ethnic minority workers in hotels and catering... 27 4.1 Participation in the sector... 27 4.1.1 Migrant workers in the sector in London... 28 4.1.2 Sectoral growth... 29 4.1.3 Age profile... 30 4.1.4 Unionisation... 30 4.2 The experiences of ethnic minority workers in Hotels and Catering... 30 4.2.1 Self-employment... 31 5. Knowledge of rights and support and advice for workplace problems... 32 6. Research aims and objectives... 34 6.1. Key questions... 35 6.2. The Advisory Group... 36 7. Project methodology... 37 7.1 The target communities... 37 7.2 Interviews... 37 7.3 Possible recruitment strategy... 38 7.4. Analysis... 39 Bibliography...40 Appendix 1: Regional distribution of ethnic groups across England... 44 Appendix 2: SIC (2003) Section H Hotels and Restaurants... 47 Appendix 3: Employers in hotels and restaurants with union recognition... 49 Appendix 4: Provisional Timetable... 50 2

Introduction The aims of this research project on the Experience of Ethnic Minority and Migrant Workers in the Hotel and Catering Industry are to identify both positive experiences but also the range of problems encountered and routes to support and advice used to resolve them. The main objective is to inform policy to improve good-practice both in the sector and in areas of high migrant and ethnic minority employment more widely, in order to prevent problems from arising, and to improve the support and advice mechanisms and services available. This paper outlines the terms of reference of this research project, as well as further elaborating of its aims, objectives and methodology. Parts 1 and 2, which distinguish between ethnic minority and migrant workers in Britain, provide an analytic separation of two categories which, in real life, are complex, changing and overlapping. We use the Labour Force Survey definitions of ethnic minorities (EM), although what constitutes EM is a politically and socially complex, racialised, and variable concept. It is also worth pointing out that groups that are commonly referred to as ethnic minorities in Britain are often not minority groups in other national contexts. For example, members of EM groups may, or may not be British citizens, and may be first, second or later generations. They may, or may not be migrants. They may be more or less visible, and this visibility is socially constructed. Recently, the perception of EM workers has been coloured by the discourse on migrants, and this in itself has often been conflated with the discourse on refugees and asylum seekers. Many of the latter may not be visible in terms of skin colour, in the way black and Asian people are, but are visible in terms of language, cultural characteristics, and discrimination. Migrants may, or may not be defined as EM, and may, or may not be discriminated against. White Australian or Canadian migrant workers, for example, would not be. But, Kosovan people may be regarded as EM, and suffer racialisation and discrimination, and Czech or Polish people may, or may not be racialised and discriminated against. From the point of view of a research project on the experience and problems of EM workers in a sectoral study such as this, what is of relevance is less objective definitions, and more, the significance of EM and/or migrant status for their work experience. A key issue is likely to be their relative disadvantage because of racialisation, or their treatment as other than white British. But this may take different forms, depending on labour market context. Some EM groups work in particular sectors, such as restaurants, because this is a sector in which they can set up small businesses and work in relatively autonomous labour market enclaves, as in Asian or Chinese restaurants. Here, labour market exclusion from other sectors creates clusters of work/employment, in which we are likely to explore issues associated with small and family business within ethnic groups. In other parts of Hotels and Catering, such as large, British white-owned hotels or international chains, EM and migrant workers experience will be defined by their otherness in relation to the ethnicity and nationality of the employer, and there is likely to be a range of experiences, some associated with EM status, some from migrant status, some from a mixture of both. This introduction seeks to address the complexity of the problems of identity and definition, and to signal that 3

although the analytical distinctions between EM and migrant employment is an important analytical device, the two may merge in reality. For this reason, and for economy of language, the term EM workers in this study is used broadly and refers to the whole range of those who are socially defined and who identify themselves as distinct from White British workers both EM and migrant workers. Part 3 briefly outlines the Hotel and Catering sector, and the sub-sectors which we intend to explore. Importantly, much of our subject matter is sectorally based, and sector variables will cut across those of gender, age and ethnicity. Thus, the labour market and employment characteristics of the Hotel and Catering sector will inform our questions regarding the particular experience of EM workers for example, the prevalence of young workers, of short-term and part-time employment, of low pay and of high rates of dismissal. Part 4 addresses the participation and experience of EM workers in the sector. Statistics from 2001 Census are provided by ethnicity, gender and region for those working in Hotels and Restaurants. However, it is in data such as these that the problems of definition outlined above arise. We do not know who among these groups are settled and who migrant, nor do the categories give us Nationality, although these could be sought elsewhere. The most problematic group is the aggregate group Other White, which includes many migrants, including those from Eastern Europe, who, as discussed in Part 2, are identified by other means. However, the sectoral and regional distributions shown will at least provide an informed benchmark by which to assess which sub-sectors, EMs and gender compositions we shall try to address in each of the regions. What is also clear from the literature review on the experience of workers in the sector, is the lack of research here, both on the actual sector, and even more so, on the experience of EMs, about which surprisingly little is known. Such literature as exists is mainly over fifteen years old, and although there are pockets of well researched areas, such as on McDonalds and some fast-food chains, it is limited. Part 5 touches on existing research on support and advice mechanisms for workplace problems, but since a key objective of this project is to explore what these are for EM workers, the section asks more questions than it answers. Part 6 outlines the Aims and Objectives of the project, including key research questions and Part 7 addresses project methodology, drawing partly on the lessons of other research projects. Outline of project methodology The scope of this European Social Fund project is confined to England, and this research will focus on three regions: London, the South West and the West Midlands. Ethnic minority populations are concentrated in particular areas of the country (see 1.2), with London having a considerably larger non-white population than the rest of the country. Many Indians and Pakistanis, for example, are also concentrated in the West Midlands, and work in the hotel and restaurant sector. For these reasons, these two regions have been chosen for this research. In addition, initial investigations have shown that the South West the English 4

region with the smallest non-white population recorded by the2001 Census is experiencing a growth in migrant workers. It is also an area where the problems facing EM populations has been less well documented, although where studies have been done, isolation from EM communities emerges as an issue. By looking at three very different regions, this research will therefore include the experiences of workers in large urban areas with significant EM populations who may benefit from community support, as well as those in areas with smaller EM or migrant populations who may be more isolated. In depth interviews will be conducted with around 55 workers: 25 in London, 15 in the Midlands and 15 in the South West. The proportions reflect the fact that there are greater proportions, and also a wider variety of ethnic backgrounds, of EM workers in London. Group interviews may also be conducted with workers to give some indication of the existence of EM and language enclaves, and views from these groups of who are perceived as insiders and outsiders in a work context. To provide additional contextual information, there will also be interviews with key informants with experience of the sector. Employers will be asked about their employment policies, any problems they may face and support/advice they receive. In addition, employer or trade union representatives, as well as community organisations that represent workers from particular ethnic groups or nationalities, will be interviewed. It could also be useful to interview representatives of organisations providing support and advice, such as Acas, the CRE or CABx. 5

1. Ethnic minority employment in the UK 1.1 Definitions The difficulties of defining or classifying ethnic groups or ethnic minorities are recognised by academics and statisticians (see ONS, 2003) and it is clear that definitions of ethnic groups evolve over time in response to social and political developments. The category mixed for example, was only introduced into the Census in 2001. The figures presented in this section use the current Census or Labour Force Survey definitions, while recognising the limitations of these broad categories for this sectoral study in which objective definitions may be less relevant than the significance of overlapping ethnic minority and migrant status for people s work experience. Definitions of nationality add further complexity and classifications such as, White other, encompass a wide range of ethnic and national origins and may include many workers who are relevant to our study. 1.2 Ethnic minorities in the population Table 1 below shows the ethnic composition of each English region, using the ethnicity classification used in the 2001 Census, and shows that two of the regions which are the subject of this study have the highest EM populations: London and the West Midlands The South West had the lowest non-white population at the time of the 2001 Census and is therefore considered interesting for this study as a contrast to the other regions chosen, and to highlight issues of isolation from EM communities. It should be noted that EM and migrant worker populations are likely to have changed since 2001, and there is evidence that these changes are particularly affecting areas such as the South West. Table 1: Ethnic composition of the English regions North North Yorks and the East West South South East West Humber Midlands Midlands East London East West England % % % % % % % % % % White 97.61 94.44 93.48 93.49 88.74 95.12 71.15 95.10 97.70 90.92 Mixed 0.49 0.93 0.91 1.03 1.39 1.08 3.15 1.07 0.76 1.31 Indian 0.40 1.07 1.04 2.93 3.39 0.95 6.09 1.12 0.33 2.09 Pakistani 0.56 1.74 2.95 0.67 2.93 0.72 1.99 0.73 0.14 1.44 Bangladeshi 0.25 0.39 0.25 0.17 0.60 0.34 2.15 0.19 0.10 0.56 Other Asian 0.13 0.22 0.25 0.28 0.40 0.25 1.86 0.29 0.10 0.48 Black Caribbean 0.04 0.30 0.43 0.64 1.56 0.49 4.79 0.34 0.25 1.14 Black African 0.10 0.24 0.19 0.22 0.23 0.31 5.28 0.31 0.13 0.97 Black Other 0.02 0.08 0.07 0.09 0.19 0.10 0.84 0.06 0.05 0.19 Chinese 0.24 0.40 0.25 0.31 0.31 0.38 1.12 0.41 0.26 0.45 Other 0.17 0.20 0.19 0.18 0.27 0.27 1.58 0.37 0.19 0.44 All minority ethnic groups 2.39 5.56 6.52 6.51 11.26 4.88 28.85 4.90 2.30 9.08 All ethnic groups = 100% 2515442 6729764 4964833 4172174 5267308 5388140 71720918000645 4928434 49138831 Source: Census, April 2001, Office for National Statistics 6

Ethnic minorities have different patterns of settlement across England, with most groups found in greater numbers in London. Appendix 1 shows, using pie charts, how the population of each ethnic group is distributed across the English regions. While the White group is fairly evenly spread across the English regions, almost all ethnic minority groups are most heavily concentrated in London. Pakistanis are an exception to this, with greater proportions in the West Midlands and Yorkshire and the Humber than in London. Black Africans, however, are mostly located in London, where nearly 80% live. 1.3 Labour market participation Ethnic minorities continue to be disadvantaged in the labour market in relation to rates of unemployment, earnings levels, occupational attainment and levels of self-employment. However there are significant differences between and within ethnic groups, with Indians and Chinese doing better than whites in some measures such as proportions in managerial or professional posts (Cabinet Office, 2003). Unemployment rates for some groups have remained higher than average for many years, with the rate for Bangladeshi, Pakistani and black Caribbean men still 10-15 percentage points above that for white men by 2000 (although representing some improvement since the 15-20% difference in 1992). Latest government figures (presented in the Ethnic Minority Employment Task Force Year One Progress Report in November 2004) show an improvement in the employment rate of EM women of 2.2 percentage points between 2001 and 2004, while the rate for EM men has changed little (DWP, 2004). Levels of economic inactivity (defined as those of working age who are neither in work nor seeking work) are particularly high among Bangladeshi and Pakistani groups, with women especially likely to be economically inactive (activity rates were 30% for Pakistani women and 20% for Bangladeshi women, compared to 74% for white women in 1999, Dale et al, 2002). EM workers also fare worse than their white counterparts in earnings, according to the Task Force. The national average wage was found to be 376 a week ( 19,552 a year) for white employees, but only 347 a week ( 18,044 a year) for EM workers. And Bangladeshi workers do even worse, earning only 235 a week or 12,220 a year - less than two-thirds the average wage of their white counterparts (Labour Research Department, 2005a). The Equal Opportunities Commission recently found that EM women have a lower average weekly income ( 118) than white women ( 135), despite the fact that they are more likely to enter higher education (58%) than EM men (55%), white women (41%) and white men (34%) (EOC, 2004). However the difference in earnings between white women and men was greater (51% less for women) than for EM women and men (41%), possibly an indication of the lower earnings of EM men. It could also be due to the fact that a greater percentage of EM women work full-time than white women. 7

Recent figures from the Labour Force Survey for 2004, however, show that while white male workers have higher average hourly pay than black male workers, black women earn more than white women (see table 2 below). As suggested above, this may be due to the greater likelihood of white women to work parttime. Overall, according to the Low Pay Commission, the ethnic pay gap is much smaller than the gaps for gender and disability. It finds that, as the ethnic pay gap was small to begin with, the introduction of the national minimum wage (NMW) has not had a significant impact on it (LPC, 2005, pp.116-117). However it does demonstrate that EM groups benefited disproportionately from the 2004 uprating of the NMW, estimating that some 8% of the beneficiaries belonged to a minority ethnic group, compared to the 6% of the adult working population who belong to EM groups. The largest proportion of EM workers to benefit were of Pakistani and Bangladeshi origin (ibid, pp.115-116). Table 2: Median hourly pay by ethnicity and gender for employees over 18, 2004 per hour Male Female White 9.31 7.06 Non-white 7.54 7.50 Black 7.00 8.27 Indian 9.56 7.60 Pakistani/Bangladeshi 6.25 6.24 Mixed/other 7.60 7.58 Source: LFS 2004, published in LPC, 2005, p.118 There has been some improvement in the proportions of EM groups in professional or managerial jobs, although again the situation varies according to ethnic group. While Chinese men and women improved their representation among managerial jobs between 1992 and 2000, and are found in greater proportions than white workers, the proportions of black Caribbean and Pakistani managers remain low. Indian men have similar rates to white men (around 25% in professional/managerial posts) and Indian women have seen an increase in such positions, to 16% in 2000 (compared to 15% for white women) from around 6% in 1992 (Cabinet Office, 2003, p. 22). Levels of self-employment in many EM groups is high, particularly among Pakistani, Indian and Chinese men. However self-employment among black Caribbean and black African men is lower than for whites (Cabinet Office, 2003). There is considerable debate as to how far the higher levels of self-employment among some groups can be explained by factors such as cultural disposition and how far it is to do with anticipation and experience of discrimination in the labour market (Cabinet Office, 2003; Wrench and Modood, 2000; Ram et al 2001a). Nevertheless it is a significant and growing form of employment for many groups. While figures on the number of EM firms are not regularly collected, it has been estimated that Asian and black businesses represent almost 7% of all small businesses, and that in Greater London there are at least 15,000 such businesses around one in five of all privately-owned businesses in the capital - 8

which employ over 200,000 people in full and part-time work (Bank of England, 1999, P.11). Labour force data show that while EM women are less likely than men in their communities to be self employed, they have higher levels of self employment than white women. However differences exist among women entering selfemployment. Dhaliwal (cited in Bradley and Boles, 2003, p.8) identifies two types of entrepreneurs in her study of Asian women in business: independent women and hidden women. The independent women are entrepreneurs in their own right, seeing their business as a challenge rather than a financial necessity. The hidden women, however, are involved in family businesses in which they work out of financial necessity and tend to be involved in the manual rather than the business or financial operations. The restaurant sector is one of the main areas of self-employment for Pakistani, Indian and Chinese workers and this is explored in more detail in section 4. 1.4 Evidence of discrimination Despite the variety of types and levels of participation in the labour market described above, there is plenty of evidence to show that racism and discrimination in the workplace remains a common experience for many EM workers. Wrench and Modood (2000) identify five ways in which evidence of discrimination against ethnic minorities in the labour market can be assessed: statistical evidence from large scale surveys that can show indirect discrimination; discrimination testing; research into the actions of employers and employment agencies who act as gatekeepers to the labour market; research into the experiences of members of EM communities; and through the actions of aggrieved employees. The first of these statistical evidence from large-scale surveys has been discussed above in relation to EM workers overall position in the labour market, and presents a distinctive picture of labour market differences for ethnic minorities. Another method is discrimination testing, in which testers belonging to majority and minority ethnic groups with the same qualifications etc, apply for the same jobs. Such tests have provided direct evidence of discrimination, for example a CRE study in 1996 that found the white applicants chances of getting an interview were nearly three times greater than those of the Asian applicants, and almost five times more than the black applicants (Wrench and Modood, 2000, p.27). More recent evidence from a BBC test which sent CVs using traditionally white, black African or Muslim names found that almost a quarter of applications by candidates given traditionally "white" names resulted in interviews, compared to only 13% for those with black African names and 9% of the "Muslim" applications, and suggested that September 11 was causing considerable difficulties for Muslims (BBC, 2004). 9

A number of studies by the CRE and others have revealed the practices of some employers towards the employment of EM workers, highlighting issues such as stereotyped perceptions, informal recruitment practices through family members or word-of-mouth, and no-go areas for non-whites in some firms (Wrench and Modood, 2000, p.29). Employment agencies were also revealed to comply with the discriminatory attitudes of employers who requested white staff only. These findings have implications for our study in that employment agencies are used in the hotel and catering sector and anecdotal evidence from one of our contacts suggests that such attitudes and practices persist. Research in the 1990s into the experiences of Afro-Caribbean and Bangladeshi young men uncovered strong perceptions of racial discrimination in looking for work and also confirmed observations about racism avoiding behaviour, in particular among Bangladeshi respondents, who gave one reason for getting employment in restaurants as being that they felt that they would not experience racism there (Wrench and Modood, 2000, p.32). Discrimination towards ethnic minorities in access to employment is believed to be a problem by both whites and ethnic minorities. The 1994 PSI study found that 90% of all economically active white people thought that employers refused people jobs for racial or religious reasons. But ethnic minorities were more likely to believe that discrimination was widespread, with one in five believing that most employers discriminate, compared with only one in 20 whites (cited in Wrench and Modood, 2000, p.34). The PSI survey also highlighted the interaction of religious and racial discrimination, showing that a quarter of the EM persons who believed that they had been discriminated against in a job application believed that it was for a mixture of reasons to do with their race and religion. For South Asians it was even higher, with over 40% believing that this combination of factors was the cause (cited in Wrench and Modood, 2000, p.34). Evidence of discrimination and harassment once in work was provided by the TUC in 2000 when they ran a Root Out Racism hotline for five days which received nearly 450 calls from workers, revealing an appalling catalogue of verbal abuse and some reported being the victims of actual physical violence (TUC, 2000). The racist abuse that they suffered at work often resulted in them taking time off sick with stress, depression and anxiety. Callers also complained about being refused references, not being informed properly about training, overtime or promotion opportunities and being unfairly monitored. If they complained some said they were deliberately isolated at work, ignored, victimised or even sacked. Just over half (53%) of the calls came from African/Afro-Caribbean workers, 26% were from Asian workers and only 0.5% from Chinese workers. EM workers at all levels reported problems, with the greatest number (20%) from professional jobs, 17% were in clerical and secretarial jobs and 14% worked in the personal and protective services (i.e. emergency services, security guards, catering workers and hairdressers). Almost two-thirds (63%) were in the public sector, and a 10

further 9% were in each of manufacturing, transport and communications and retail, hotels and catering. 1.5 Equal opportunities policies In addition to the legal remedies that workers may have to address, race discrimination (some of the difficulties of which are described in section 5), equal opportunities policies have been introduced by most employers. However, Wrench and Modood s report (2000) finds a rather mixed experience of the implementation of equal opportunities and anti-discrimination policies in work organizations (p. 2). They point out that many major companies have high profile equal opportunities initiatives, which have had a positive impact on the profile of their workforces. However, they also note that relatively few companies have serious plans for implementing racial equality initiatives (p.2). And their evidence suggests that such policies may have had very little impact on the majority of workers covered by this research project. They say that: equal opportunities practices and diversity management are in practice virtually irrelevant for those ethnic minorities who are found in the lowest paid, least protected and most precarious sectors of employment. For this particular group of EM workers, the priority for tackling the ethnic inequality they experience is not solely via direct measures such as race relations legislation but also through indirect measures such as the introduction of legislation allowing union recognition, and the effective enforcement of a national minimum wage policy (p. 2). 1.6 Government policy The government has engaged in a number of policy and strategy initiatives to tackle the labour market position of EM workers in the last few years. In March 2001 the Strategy Unit began work on a project on Improving the labour market achievements of ethnic minorities, one result of which was a major report by the Cabinet Office in 2003, Ethnic Minorities and the Labour Market. This report contains an objective that in ten years time, ethnic minority groups living in Britain should not face disproportionate barriers to accessing and realizing opportunities for achievement in the labour market (Cabinet Office, 2003, p. 7). It focuses on 4 key areas to achieve this: education, employment, equal opportunities and delivery. The Ethnic Minority Employment Task Force was also established to improve the labour market position of ethnic minorities and it produced its first report in November 2004, containing a number of recommendations across departments covering education, employment, access to employment etc. A further strategy document was published by the Home Office in January 2005, Improving Opportunity, Strengthening Society: the Government s strategy to increase race equality and community cohesion, (Home Office, 2005b) which also contains strategies for the labour market, covering connecting people to work, workforce skill development and equal opportunities in the workplace. 11

2. The employment of migrant workers in the UK 2.1 Definitions The definition of migrants used by the Home Office in a series of recent studies on UK migrants in the UK labour market is all those who were born outside the UK (Home Office, 2002a). Other definitions of migrant workers are used, such as that employed by Bell and Jarman (2004, p.3): An individual who arrives in a host country within the last five years, either with a job to go to or intending to find a job. For the purposes of this report the Home Office definition will be used as the figures presented mainly come from research done for the Home Office. Migrants, therefore, include both whites and non-whites, as well as those who have been in the UK for some years and have acquired British citizenship. Although many workers are both from an ethnic minority and are migrants, this section presents data relating to migrants, and will, where useful, distinguish between EM and white migrants. It is also worth noting that some white groups, such as Irish and Eastern European workers, suffer worse conditions than other white migrants, and these are sometimes highlighted here. 2.2 Migrants in the UK Using the Home Office definition, migrants account for 8% of the UK population and almost 10% of the working age population (or around 4.8 million people, of whom 3.6 million are of working age). In 2002 almost a quarter (23%) were from the EU (as defined then), 20% from the Indian sub-continent, 19% from Africa, 11% from the Americas, 10% from the rest of Asia, 5% from other Western European states, 4% from Australasia, 3% from Eastern Europe and 3% from the Middle East. Almost half of migrants (47%) have acquired British citizenship. Almost a third (31%), however, arrived in the 1990s, a period when many arrived from Eastern Europe. More than 40% of migrants lived in London in 2001, making up 26% of the population of London. Ethnic minorities accounted for less than half (46%) the migrant population in Great Britain in 1997 (Shields and Wheatley Price, 2002, table 2.1, p. 13). Indians were 13% of all migrants, 7% were Pakistani, 6% black Caribbean and 3% each were Bangladeshi and Chinese. Migrants tend to be of working age and are mainly concentrated in the 25-49 age group (Home Office, 2002a). Educational attainment is polarised for migrants, who are both more likely to be highly qualified than the UK-born population (19% have degrees, compared to 15% among the UK-born) and to be found among those who have no qualifications (19% compared to 16%). 12

In addition to the migrants identifiable by the Home Office, there are also undocumented migrants working in the UK, although clearly it is very difficult to estimate the numbers. It is also the case that the distinction between lawful and undocumented migrant status is not always clear. For example, an individual on a student visa, who works more than the 20 hours permitted, would be considered to be working unlawfully, as would a migrant worker whose legal status becomes undocumented once she/he overstays what is legally allowed. 2.3 Labour market participation While the statistics show that the employment rate for all migrants is lower than for the UK-born (64% compared to 75%), the labour market performance of white migrants is very similar to that of British-born whites, according to Dustmann et al (2002). They find that EM individuals, and in particular those from the Indian, Caribbean, Pakistani, black African, and Bangladeshi communities, are significantly less likely to find employment than white immigrants. However the exception to this is white individuals from other European countries, who are predominantly from the former Eastern Bloc countries and Turkey (Dustmann et al, 2002, p. 36). Recently arrived migrants have significantly reduced employment and participation rates (Shields and Wheatley Price, 2002). Self-employment is a significant form of employment for many migrant groups, with concentration in some sectors, in particular construction and distribution, hotels and restaurants. Self-employed migrants are twice as likely to work in distribution, hotels and restaurants than the white UK-born population (36% in 2000, compared to 17% of UK-born whites). But for EM migrants the figure rises to 50%, compared to 22% for white migrants (Dustmann et al, 2002, p. 43). In terms of earnings, it has been shown that white migrants are generally more successful than white UK-born workers, with individuals from the Old Commonwealth countries earning on average 20% higher wages than comparable UK-born individuals. However for many EM groups earnings are considerably lower than average: Bangladeshis earn about 40% less than white UK-born and Pakistanis around 20% less (Dustmann et al, 2002, pp. 47-48). Perhaps unsurprisingly, English language proficiency has been shown to improve with time of residence, is higher for the more educated, and is strongly linked to the likelihood of being employed and can significantly reduce the wage gap between UK-born whites and minority migrants. There are also variations in proficiency across ethnic groups, with Bangladeshi and Pakistani groups having the lowest levels of proficiency in English (Dustman et al, 2002). 2.4 Evidence of discrimination and exploitation Migrant workers, particularly those in the low-skill sectors of the economy, are often vulnerable to exploitation in employment. The CAB has collected evidence from clients using their services of the vulnerability of migrant workers in the lowwage sectors: agriculture, care homes, cleaning, food processing and hospitality (CAB, 2004). 13

Evidence of exploitation by gangmasters and employment agencies in agriculture has been recognised by the government and the media (see for example, The Guardian newspaper 10 and 11 January 2005). But the CAB report found similar problems arising from the activities of gangmasters in the hospitality and cleaning sectors, especially in relation to motorway service stations (CAB, 2004, p. 4). A number of common themes emerged from the experiences of migrant workers in all the sectors studied by the CAB including: misleading recruitment of workers in their own country on false promises of good pay, conditions, and housing; extremely long hours, low gross rates of pay and sub-standard accommodation; excessive deductions from pay for accommodation, transport to work, utilities, and repayment of the cost of travel to the UK; failure to provide a contract of employment and/or proper pay slips, and denial of other basic employment rights; uncertainty and confusion about who is actually the worker s employer, and a frequent failure to ensure that the worker had a National Insurance number, with the apparent non-payment (by the employer) of tax and National Insurance contributions; and the summary dismissal, and immediate eviction from any associated accommodation, of workers who assert their legal rights or rock the boat (CAB, 2004, p. 5). Experiences from the hospitality sector reported by the CAB include: - a Thai man in Bristol who had entered the UK on a five-year work permit some two years previously to work as a chef in a local Thai restaurant and was being paid only 150 for a 60-hour week (just 2.50 per hour i.e. 1.70 less than the then National Minimum Wage of 4.20 per hour). He had received only two weeks paid holiday per year and no Statutory Sick Pay in respect of a two-week period of (certificated) illness; - a Ukrainian man and woman in London who had both been working at a local branch of a national restaurant chain for four years, during which time they had received no paid holiday; and - a Portuguese man in Nottinghamshire who had been working as manager of a local fish-and-chips shop for seven months without receiving a contract of employment, pay slips or paid holiday, and was being paid 200 for a 60-hour week (i.e. some 1.20 per hour less than the then National Minimum Wage) (CAB, 2004, p. 8). Further evidence of the exploitation of migrant workers is shown by a recent report, Forced labour and migration to the UK (Anderson and Rogaly, 2005), which shows how even those with work permits find it difficult to enforce their rights, and for irregular workers the situation is much worse. Although the report focuses on workers in care, construction, agriculture and contract cleaning, many of their findings will apply to the hotel and catering sector. The government s 2002 White Paper Secure Borders, Safe Haven (Home Office, 2002b) notes that the problems connected to the employment of irregular migrants are particularly severe in catering and hospitality as well (Anderson and Rogaly, 2005, p.20). The research establishes four indicators of forced labour: - Violence: including physical or sexual violence, and threats of violence; - Other forms of coercion, such as debt bondage, retention of identity documents, threats etc.; 14

- Excessive dependence on employers or third parties; and - Other practices including excessive working hours and the provision of substandard living conditions. Sub-standard working conditions documented in the report include the failure to pay workers, excessive working hours, lack of concern for health and safety standards, and the provision of poor accommodation, which in turn adds to the dependency of many migrant workers. It is common for migrant workers to face deductions from wages by employers and agencies, which are often illegal or excessive. The report identified four broad categories of deductions from wages: (i) deductions to repay migration debt including travel, visa and documentation costs, and the interest accrued; (ii) deductions for the opportunity to work; (iii) deductions for accommodation, and; (iv) deductions for work related costs such as uniforms, transportation or safety gear (ibid, p. 42). Workers immigration status, even when legal, is often used to keep them in forced labour. The retention of identity documents, as well as threats to denounce the worker to the authorities, keep them tied to the employer (ibid, p.39). Furthermore, legal controls on the worker s right to work create a dependence on the employer, as work permits are obtained by the employer not the worker, who is therefore tied to that particular employer. Permit holders are also barred from claiming state benefits, including statutory sick pay (ibid, pp.47-8). 2.5 Government policy In February 2005 the government published its five year strategy on asylum and immigration, Controlling our borders (Home Office, 2005a), which included the intention to phase out low skilled migration schemes in the light of new labour available from the European Union (in addition to other controversial proposals such as only granting refugees temporary leave to be reviewed after five years). The plans to allow only skilled migration into the UK will remove schemes such as the Sectors Based Scheme, which granted work permits to certain numbers of workers in skills shortage sectors such as hospitality (see 3.2.3). On 23 June 2005 the Minister of State for Immigration announced that the Sectors Based Scheme would cease operating in the hospitality sector from 31 July, or from when the 2004-5 quota was exhausted, whichever was sooner. As the quota was said to be nearing its limit, it was announced that no new applications submitted after 1 July 2005 would be considered. This will certainly be opposed by many employers in the industry who were instrumental in setting up the schemes. The Chief Executive of the trade association for the industry, the British Hospitality Association, has said: The government is saying that the industry will create 500,000 new jobs by 2010. It will be impossible to fill these vacancies without a more sympathetic approach to immigration. 1 1 BHA Press release 7 March 2005 15

Trade unions have also criticised the proposals for failing to deal with the welldocumented exploitation of migrants workers, and some are calling for an amnesty for illegal migrant workers currently in the UK, along the lines of that granted by the Spanish government to up to 800,000 undocumented immigrants (Labour Research Department, 2005b). Government policy is concerned to appear tough on illegal immigration. One strand of this was the 2004 Gangmasters Act, which created a compulsory licensing system for gangmasters and employment agencies supplying or using workers in agriculture, gathering shellfish and related processing and packaging activities. However it will not extend to other sectors, such as hospitality, where there is known to be exploitation of migrant workers. 16

3. The hotel and catering sector The hotel and restaurant sector, using the Standard Industry Classification (SIC) H 55, is made up of five sub sectors (see Appendix 2): - hotels (H 55.1); - camping sites and other short-stay accommodation (55.2); - restaurants (including take-away food shops) (55.3); - bars (55.4); and - canteens and catering (55.5). Within the sector there are significant variations in the proportions of ethnic minorities employed (see section 4). Whereas EM workers are found in greater proportions than white workers in the labour market as a whole in the hotel, restaurant and canteens and catering sub sectors, they are underrepresented in camping sites etc. and bars. It therefore seems clear that our research should focus on the three sub sectors where ethnic minorities are most likely to work: hotels; restaurants; and canteens and catering. For this reason, the following sections will pay particular attention to the characteristics of these sub sectors, although some of the figures will refer to the sector as a whole. 3.1 Economic characteristics A report prepared by Smith and Carroll (2003) for the European Foundation for the Improvement of Living and Working Conditions (Klein Hesselink et al, 2004), provides a detailed picture of the UK hotel and restaurant sector. It shows that the hotel and restaurant sector: - represented 3.4% of GDP in 2001 (an increase from 2.7% in 1993); - is one of the most significant in terms of employment, accounting for more than 4% of all employment (1.2 million jobs), with a growth during the 1990s; - is characterised by small establishments, with 82% of restaurants and 79% of contract catering firms having 10 or fewer employees. But for hotels the figure is 55%, with a significant decline in smaller hotels in recent years and a trend towards larger chains (HtF, 2002); - the canteen and catering sector has grown as a result of contracting out of services, with public and private sector organisations now less likely to provide catering in-house (26% of contract catering outlets were in education, 5% in healthcare and 49% in business and industry, BHA, 2002). The sector has witnessed a 7% growth rate over the past five years more than the economy overall. This growth is set to continue, with an additional 15,000 new jobs predicted to be needed between 2002 and 2012 - in addition to the 846,000 replacement jobs lost through labour turnover. Over the past four years there has been a growth of 6% in the number of new establishments (People 1st, 2005, p.6).

3.2 Labour market characteristics 3.2.1 Overview In summary, Smith and Carroll (2003) show that work in the sector is dominated by the following types of workers and contracts: - women account for 61% of those working in the sector overall (compared to 47% in employment), but are more likely to be in canteens and catering (73% of employees) than hotels (58%) or restaurants (54%); - young workers aged under 25 years account for 37% or those employed in the sector (compared to national figure of 13%); by sub sector, 44% of workers in restaurants are under 25, compared to 34% in hotels and 9% in canteens and catering; - short-term employment/high turnover: 36% in 2002 had been with their employer for less than 12 months (compared to 19% average in the labour market) (38% in restaurants, 34% hotels and 22% canteens and catering), with the effect of excluding these workers from a number of employment rights that require a year s service; - temporary employment is slightly more prevalent in hotels (8%), restaurants (9%) and canteens and catering (7%) than the national rate of 6%; - more than half of all employees (52%) work part-time compared to the national average of 26%; - the above average rate of part-time work applies to both men and women: whereas only 10% of all men work part-time, 39% of those in restaurants do so, as do 30% of male hotel workers and 15% in canteens and catering; 45% of all women work part-time, rising to 65% in restaurants, 61% in canteens and catering and 53% in hotels; - most part-time workers in the sector are either students (54% of parttimers in restaurants and 45% in hotels) or do not want a full-time job (81% of those in canteens and catering); - men and women working in restaurants are slightly more likely to be self-employed than the national average (16.4% of men in restaurants, compared to 15.8% nationally and 9.7% of women, compared to 6.5% nationally) and the last decade has seen an increase; levels of self-employment for men and women are lower in hotels (which has seen a decrease in numbers) and canteens and catering than the average; - high proportions of workers in the sector have either no educational qualifications (17% in restaurants and 15% in hotels, compared to 12% nationally) or compulsory level education only (23%, compared to 19%). Smith and Carroll are unable to provide figures, but point to anecdotal information that informal or unrecorded work exists in the sector, with some employers taking advantage of people who do not have the right to work legally in the UK to employ them under poor terms and conditions. 18

3.2.2 Gender segregation Smith and Carroll s report (2003) clearly shows the extent of occupational segregation by gender within the hotel and catering industry. The table below shows that in hotels, for example, almost a quarter of female workers are cleaners or domestics, nearly a fifth are waitresses and almost one in ten are receptionists. Men are most likely to be chefs or cooks, waiters, managers or porters. Similarly in restaurants, women are much less likely to work as chefs or cooks (9%, compared to 25% of male workers), and are most likely to be waitresses. And in canteens and catering, half of women are kitchen and catering assistants (compared with 16% of male workers), and are less likely to be chefs or cooks or managers than men. Table 3: Occupations of men and women in hotels and catering Occupation 55.1 Hotels %* 55.3 Restaurants %* 55.5 Canteens and catering %* Male Female Male Female Male Female Bar staff 8% 5% 3% 2% Chefs, cooks 18% 5% 25% 9% 27% 16% Cleaners, domestics 3% 24% 2% 2% Hotel and accommodation 9% 7% managers Hotel porters 9% Housekeepers 6% Kitchen and catering 8% 5% 24% 22% 16% 50% assistants Receptionists 9% Restaurant and 3% 2% 22% 14% 18% 12% catering managers Sales and retail 4% 12% assistants Waiters, waitresses 16% 18% 12% 30% 3% Source: Labour Force Survey 2002, taken from tables 11 (b) and (c) in Smith and Carroll (2003, p.19) * Columns do not add up to 100% as occupations with small numbers are not included Other studies (for example, Lucas, 1995; Purcell 1993) confirm the segregated nature of work in the sector on gender lines. Adib and Guerrier (2003) note that the domestic nature of hotel work means that it is commonly perceived as quintessentially women s work (p.419). However, they break this down further, saying that hotels are structured around a range of work roles that carry different expectations about gender, race, ethnicity and class (p. 414). They suggest that some jobs may be seen as only suitable for white women (for example, receptionists) as they need to be seen as sexually attractive to white men. They also find EM and migrant workers to be clustered in lowest graded work, noting that: It is common to find that all the chambermaids in a hotel are drawn from the same ethnic minority or migrant group (p. 420). 19

3.2.3 Labour shortages and the Work Permit Scheme Labour shortages have been a feature of the sector, with 33% of vacancies unfilled in 2002 (compared to 24% nationally) and particularly acute shortages in the more skilled occupations such as chefs (Smith and Carroll, 2003). However, recent reports from the sector suggest that labour shortages are less of a problem currently due to the availability of workers from the new EU states, although this could be a short-term solution, particularly as the economies of those states grow and workers may in future have more opportunities at home. 2 One attempt to address these staff shortages has been through the Home Office s Work Permits system. One particular Sectors Based Scheme (SBS) aimed to address skills shortages in lower skilled occupations in two sectors: food processing and hospitality (hotels and catering) by making available a quota of 10,000 work permits from May 2003 to January 2004 for each sector (Clarke and Salt, 2003). It was extended for a further year to 31 January 2005, with a comprehensive review, due to report shortly. Such unskilled schemes will, however, be ended under the Government s recent immigration plans (see 2.5). Further analysis of the SBS for hospitality (see table 4) shows a total of 21,334 applications for work permits between 31/05/2003 to 30/09/2004 (Kofman et al, 2005, p.42). While only 16.1% of these went to female workers, if the Bangladeshi workers, who make up the overwhelming majority of applicants for male workers in the sector, are excluded, the female proportion rises to 35%. It should also be noted that many of these applications, particularly from Bangladeshi workers, did not result in permits being issued. Table 4 shows the countries from which workers applied, and it is clear that Eastern European countries feature prominently, with women often applying in larger numbers than men. Kofman et al also point out that the number of permits granted to students is much larger than those granted for work, with education forming a significant route of entry for migrants, and possibly also a significant source of migrant labour (ibid, p.20). As has already been shown (3.2.1), young workers and students make up a large proportion of workers in the sector so it is to be assumed that overseas workers are also included among this number. Table 4: Applications to the Sectors-Based Scheme for Hospitality 31/05/2003-30/09/2004 Nationality Number % female Bangladesh 11,684 0.5% Bulgaria 864 44.7% India 965 8.4% Latvia 242 60.3% Lithuania 184 57.1% Moldova 242 38.4% Philippines 357 61.6% 2 Interview with Chief Executive of British Hospitality Association, 6 April 2005 20