Food workers and low pay

In 2021 UNITY Consulting Scotland conducted a membership survey on behalf of the Bakers Food and Allied Workers Union (BFAWU). Survey results showed a clear link between low pay, insecure work and food insecurity. This was the catalyst for the creation of the Food and Work Network (FAWN) and in this blog we examine the appalling behaviour of two major food production companies towards their former employees.

A large proportion of the people who grow, produce, assemble, package, distribute and serve our food are often unable to afford the food they are employed to produce. This is a damning indictment of our wider society and highlights the fact that food workers are treated and undervalued.

Poor treatment of food workers

We have two recent examples of the poor treatment of food production workers and the abject failure of the law to protect them. Dawnfresh Seafoods and Orchard House Foods are not connected other than both companies went into administration; did not pay their workers redundancy or any monies they were owed, and passed on their financial obligations to the state. Meanwhile their directors/owners carried on regardless with their other (money making) activities, apparently oblivious to the plight of the workers they had recently employed.

Dawnfresh

Alastair Salvesen one of Scotland’s richest people, owned Dawnfresh Seafoods in Uddingston and closed the plant down in 2022. It was reported that he was seen emptying the lavish company boardroom of his expensive art collection just before they went into administration.

Meanwhile, workers at the plant were left without wages, owed outstanding holiday pay and no redundancy was paid by the company. Mr Salvesen passed on financial responsibility to the state, who eventually paid the workers what they were owed. For many workers who did not find other employment during the intervening period, they were forced to rely on food banks to feed themselves and their families.

Orchard House Foods

Several months later, Orchard House Foods, owned by private equity firm Elaghmore, went into administration. They were one of the UK’s largest suppliers of prepared fruit, fresh fruit drinks and desserts; supplying the likes of Marks and Spencer, Morrisons, Pret a Manger, Sainsbury’s and Tesco.

Orchard House closed its Gateshead plant in August 2022 promising to ensure their redundancy was paid before Christmas. In January they also closed their plant in Corby before entering administration. All workers were left without pay and other owed monies.

The promised redundancy money from the company was never paid to the Gateshead workers. When the asked about their failure to do this, their response was that they had advised workers that ‘once an administrator was appointed former staff in the North East would be able to claim their redundancy through the Insolvency Service.”

Avoidance of responsibility

These companies have a clear strategy to avoid their responsibilities to pay workers redundancy and to pass this duty onto the taxpayer. Yet, the main owner of Orchard House Foods, Elaghmore, boast on their website about their £90m investment fund and Elaghmore directors can still buy and sell firms and are free to move on to new ventures, without any state censure.

Understandably the workers left behind and their union, the BFAWU, are angry at how fast and loose these companies have behaved with their livelihoods. This cannot be allowed to continue.

Campaign for change

The legal frameworks that allow the owners of companies like Dawnfresh and Orchard House Food to continue behaving in this way must be changed. Directors and owners, who have the means and resources to uphold their obligations, but use a flawed law to avoid them, must be held to account.

The BFAWU has dealt with these companies, watched their callous, ruthless methods and witnessed the awful aftermath for former employees and its union members. They are now campaigning for change. In the absence of amendments to the limited liability law, they are focused on campaigning for:

• Director disqualifications - to stop directors from being able to move from company to company.

• Fines – significant fines for companies that act like Dawnfresh and Orchard House Foods implementing a reverse incentive to stop companies treating workers so callously.

The next step is to convince the TUC General Council and other trade unions to make this a central campaign. Changing the law to protect the most vulnerable and low paid workers from such exploitative and heartless employers. We would like to see the involvement of the wider Labour and trade union movement, including the Labour Party.

The Labour Party is likely to form the next Government so it should be incumbent on them to deal with an obvious injustice that allows workers to be treated so badly by employers like Dawnfresh and Orchard House. The BFAWU has started this campaign, and one thing is certain, they are not going away until the law changes.