Asked by Corporate Watch how it benefited from these placements, a spokesperson from Matalan said: “we obviously get people who want to work and we are always grateful of the extra help, especially during busy times.” The discount retailer added the placements gave participants a chance to “try the job out to see if it's the right career for them,” and that they gain “a wealth of valuable experience and get a chance to engage with their community.”

The company promised to get back to us with examples of people who had moved from the placements to paid work but, at the time of publication, had not done so. TK Maxx declined to comment, while Savers and Wilkinsons did not reply to repeated requests for comment.

Matalan, which posted profits of £73 million in February this year, said it did not know how many people have participated in its placements across the country as these are managed on a store-by-store basis. However, in a further sign that the number of placements will significantly increase under the coalition's welfare reforms, the company added it was “hoping to have a national provider such as Retail Works [Seetec] or Job Centre Plus on board by early next year.”

Corporate Watch was also contacted by people with experience of placements in small businesses, charities and councils. One claimant described how two unemployed tradespeople were sent on a placement and “instructed to build a new building”. They estimated the actual labour cost to be around £3000, yet “they were being told do it for the same rate as their benefits, with the threat of them stopping if they refused. Such blatant disregard for the worth of work is rife within the system.”

A former staff member at Newham Council, who wishes to remain anonymous, described the reaction of staff when they found out that one of their colleagues was only receiving benefits for her work:

“I went to [her] leaving do ... We were all so sorry to see her go. She was an older lady and was one of the most hard-working and genuinely helpful admin staff we'd ever had. Worked her hours plus more and nothing was ever too much trouble for her. We honestly didn't know why she was leaving after only six months. She'd worked a minimum of 37 hours per week (often more) and been the backbone of service delivery. The basic starting wage for that level is around £17,000 but for the work she was doing I would have expected her to be started at a few thousand more. Yet all she was getting was JSA and the fares for her lengthy bus journeys, while people doing identical work were getting a salary, paid leave and pension contributions. We were horrified.

Wrongly, we assumed this woman would be hired back as proper staff within days. The role was needed, she'd proven herself to be a fantastic worker, was well regarded and knew the systems. But no, the post was suddenly deemed no longer required and this lady never came back to us. She did exactly the same job as paid staff, yet didn't get the same salary. This is illegal if the reason is age or race, but perfectly acceptable if someone has claimed a state benefit. It's exploitation and it's repellent.”

Newham Council has not responded to repeated enquiries from Corporate Watch about its use of placements.

A former claimant who was sent to a work placement in a charity under the previous Labour government's welfare programmes,[2] described how, after he started using a wheelchair, he was referred to a training course with a charity he was told could lead to a job in broadcast media:

“On my first day with the charity, I was told that I would have to wait because the course I was promised a place on was full. Instead, did I know how to use a computer? I confirmed that I did and was put to work creating digital versions of all of the charity’s presentational materials. It was impossible to do this work in the charity’s office, however, because their computer was ancient and unable to run modern Microsoft programs. So, I offered to do the work at home on my own computer and print the presentation materials out on my own colour printer (the charity did not have a working colour printer either). It took me several weeks to complete this work and cost me a lot more than £10 per week to print everything out.

Once I had finished this job, I asked about the media course. I was told that there was still no place available and they had no more work for me to do. I began to realise that there was no media course and that I had been exploited. Also, I had only received one payment of £10 from DWP, not £10 every week [as originally promised]! So, I had done several hundred pounds worth of work for the princely sum of £10. I was not reimbursed for any of my home working costs, nor for any of the paper and acetates I bought to print the new presentation materials on … The gallling thing about it was that the charity I was working for was one that claimed to support independent living for disabled people.”

A spokesperson for the Boycott Workfare campaign, which is encouraging workplaces to pledge not to take people on unpaid work placements[3] organised by Jobcentres or subcontracted provider companies, said:

“Huge companies making billions are profiting from people being made to work without pay while in fear of losing everything. These companies can afford to hire and pay staff yet perversely they are increasingly reliant on a workforce subsidised by taxpayers. Councils are replacing paid positions with workfare and charities are replacing paid and voluntary vacancies with unpaid mandatory workers. Workfare as a policy doesn't make sense in this economic climate. We want to see a fair day's pay for a fair day's work.”


Have you been sent on an unpaid work placement or do you know anyone who has? Contact Corporate Watch on 02074260005 or contact[at]corporatewatch.org

[1]  http://www.corporatewatch.org/?lid=4029
[2] Former Labour ministers remain enthusiastic supporters of workfare, as David Blunkett, now an employee of A4E [ http://www.theyworkforyou.com/mp/david_blunkett/sheffield,_brightside_and_hillsborough#register], one of the companies subcontracted by the government to send people to placements, showed this month[ http://www.dailymail.co.uk/debate/article-2031938/UK-riots-Why-Britain-needs-new-kind-National-Service.html].
[3]  http://www.boycottworkfare.org/?p=1

* Former Labour ministers remain enthusiastic supporters of workfare, as David Blunkett, now an employee of A4E, one of the companies subcontracted by the government to send people to placements, showed this month.