Financial Times Europe - 04.04.2020 - 05.04.2020

12 ★ FT Weekend 4 April/5 April 2020

COMPANIES & MARKETS

union representation, but groups such

as United for Respect, of which

Ms Legowski is a member, are cam-

paigning for better conditions.

A group of gig economy workers at

Instacart, the US grocery delivery serv-

ice, struck this week because they

wanted hand sanitisers, but also for rea-

sons that predate the crisis and, accord-

ing to unions, have been made the more

urgent by it: the need for higher wages

and sick pay for a flexible workforce

that receives few benefits.

The pandemic has created the rare

situation in which the balance of power

between workers and management is

under intense public scrutiny.

Last month, a chorus of outrage

forced UK retail magnate Mike Ashley

into a rare apology after he claimed the

exercise equipment he sold was essen-

tial and his Sports Direct chain should

stay open, even as the government

ordered much of the high street to shut.

In Australia, Qantas was rebuked by

health and safety authorities this month

for putting staff and customers at risk:

the airline had required cleaners to

board a plane that arrived from Beijing

on January 30 at the height of China’s

outbreak without protective equip-

ment, after staff initially refused.

In Italy, many factories initially

remained open with encouragement

from the authorities, before closing

under pressure from unions.

As countries face up to the prospect of

lengthy lockdowns, anxiety among

workers who cannot stay at home con-

tinues to rise.

Although JD Sports has reduced the

number of staff at its Rochdale site

by two-thirds, the employee who spoke

to the Financial Times worried that it

was a “breeding ground”, not least

because any one item might be touched

by many different workers as it made its

way from the warehouse floor to the

delivery trucks.

Technology introduced to monitor

staff is also seen as problematic.

The employee said: “We’re not wiping

everything down. We clock in using our

fingerprint, 400 or 500 people are con-

stantly clocking in for breaks, to go to

the toilet; it’s a constant thing. We have

sanitisers near the scanners, but some-

times they’re empty.”

Some studies have found that the

virus is viable on cardboard for up to

24 hours, and on plastic and steel for up

to 72 hours.

JD Sports said that it had increased

hygiene and cleaning processes, and

that the local authorities were happy

with its measures.

Some companies say that minim-

ising the risk to employees is not

straightforward.

Ronald Kers, chief executive of

2 Sisters Food Group, the UK’s largest

chicken producer, pointed to the

challenges of maintaining the recom-

mended 2-metre social distance

between workers on production lines.

He said: “We’ve got more than 30 sites

across the group, and every site is differ-

ent — the layout, the product, the light,

the circumstances. So we're trying to

adapt as well as possible.”

Absenteeism was “going up” for a

variety of reasons, Mr Kers said, includ-

ing self-isolation and people who

“weren’t sure about whether they

should actually be at work”.

In the absence, in most countries, of

widespread testing, which would allow

employees to know whether they were

well enough to work, some companies,

such as Swiss industrial group ABB,

have started their own testing.

Walmart, the largest private

employer, said it was installing “sneeze

guards” at checkouts and using

wipes and sprayers for shopping trol-

leys. It also said it would provide gloves

and masks for staff, supplies permit-

ting, and that their temperatures would

be taken.

“Any associate with a temperature of

100.0 degrees will be sent home,” said

Mr Furner, and anyone with Covid-

will be given paid leave.

Reporting by Dan McCrum, Antonia Cundy

and Judith Evans in London and Alistair

Gray in New York. Additional reporting by

Jamie Smyth in Sydney

See Editorial Comment and Lex

While

millions

retreat to

work from

home, many

have no

option but

to continue

heading to

warehouses,

factories

and stores

The self-employed are more likely to work

in sectors hit by a large drop in demand

 of UK workers in industries most aected by social

distancing measures

Sources: IFS; Eurostat









Employees Self-employed

Car manufacturing

Non-food retail

Passenger

transport and

travel

Accommodation

and food

services

Arts and leisure

Personal services

European employment by occupation

- year olds ()

Armed forces 

Professionals 

Service and sales



Technicians



Craft and related

trade workers 

Clerical support 

occupations Elementary



Plant and machine operators and assemblers

Managers



Skilled agriculture, fishery & forestry workers



Fewer Italians work from home

Share of employees that sometimes or usually worked

from home in * ()

* By selected EU  countries

    

Netherlands

Sweden

UK

France

EU 

Germany

Spain

Italy

F T R E P O RT E R S

Brittney Legowski had panic attacks in
the Walmart toilets as Wisconsin con-
sumers emptied shelves at the store
where she was working.
“I have been getting so stressed-out
with demands from managers,” said the
21-year-old, who has since taken unpaid
leave, fearful for her health. “It’s just
been pressure, pressure, pressure.”
While millions have retreated to work
from home, many have no option but to
continue with their daily routine, head-
ing to warehouses, factories and super-
markets in spite of the risks.
An employee at a JD Sports-owned
warehouse in Rochdale said: “I could
understand if we did things like food or
medical equipment, but we’re just doing
trainers and tracksuits. All we hear are
the slogans saying ‘Stay home, help the
NHS and save lives.’ Butwecan’t.”
It is situations like this that prompted
the Unite union to accuse drinks group
Diageo of putting profit above worker
safety by keeping production of
Smirnoff and Johnnie Walker going at its
Scottish factories.
Diageo said it had done everything it
could to protect staff and “all employees
who can work from home are doing so”.
Walmart said that it was hiring
150,000 workers to help meet demand,
and last month set out plans for a $
bonus for full-time and $150 for part-
time workers.
John Furner, head of Walmart in the
US, said he recognised that it had been
“a very uncertain and stressful time”,
and thanked staff for their efforts.
Their responses go to the heart of
the dilemma facing companies, govern-
ments and, ultimately, consumers as
the pandemic tightens its grip: what jobs
are important enough to justify the
much greater risks involved in heading
out to work?
Oxford law professor Jeremias
Adams-Prassl said: “What we’re forced
to confront is that employment protec-
tion is not just about employment, it has
a huge role protecting consumers and
society. If you’re a worker in the gig
economy and you feel a bit ill, the
chances are that you continue to go to
work due to the incentives in place.”
At the same time, the threat of conta-
gion in the workplace means many
companies have been struggling with
staff absences. Amazon, whose business
is booming, experienced a walkout by
some staff in New York this week over a
lack of protective equipment.
In Australia, dozens of wharf workers
at a DP World terminal at Melbourne
port were stood down after refusing to
unload a container vessel that had pre-
viously docked in Shanghai and Taiwan.
DP World said safety concerns raised by
the Maritime Union of Australia were
unfounded because of the length of time
the crew had been at sea.
A lack of clarity from governments
about what constitutes “essential”
work heightens the risk that lower-paid
staff, such as delivery drivers and ware-
house workers, are put in harm’s way
unnecessarily.
Hilda Palmer of advocacy group the
Hazards Campaign said: “We have a sit-
uation where people going to non-essen-
tial work could be pulled over by the
police and fined, but there is no enforce-
ment against employers.”
The group intends to use Workers’
Memorial Day on April 28 to highlight
problems of insecure work, poor
sick pay, and a lack of attention to health
and safety.
In the US, few retail workers have

Crisis shines light on worker safety

Balance of power between employees and management has come under intense public scrutiny

An employee

inspects a bottle

of Johnnie

Walker Black

Label at Diageo’s

Shieldhall plant

in Glasgow. The

group says that

all staff who can

work from home

are doing so

Mike Wilkinson/Bloomberg

H E N N Y S E N D E R— H O N G KO N G

D O N W E I N L A N D— B E I J I N G

N E I L H U M E— LO N D O N

The accounting scandal at Luckin Cof-

fee, a start-up that aimed to displace

Starbucks in China, has caught out

several of the world’s most powerful

investors.

BlackRock and Singaporean sovereign

wealth fund GIC were among those who

invested in private funding rounds in

the months before Luckin’s initial pub-

lic offering last year. Louis Dreyfus, one

of the world’s biggest traders of orange

juice and coffee, and Melvin Capital and

Centurium Capital were also backers.

Shares in Luckin crashed more than

70 per cent on Thursday after it dis-

closed that an internal investigation had

uncovered Rmb2.2bn ($310m) in fabri-

cated transactions. Several employees,

including its chief operating officer,

have been suspended and its previous

financial statements can no longer be

relied on, the group warned.

The disclosure casts considerable

doubt over the future of the unprofita-

ble group, which was founded in 2017

by Lu Zhengyao and had more than

4,000 outlets by the end of 2019.

In the prospectus for its initial public

offering last year, Luckin declared that

the coffee chain would be the largest in

China by the end of 2019 as it disrupted

the “status quo of the traditional coffee

shop model”.

Not all of the backers will have lost

money. BlackRock sold its main stake,

held by its private equity fund, earlier

this year, but retains a position via other

active and index funds.

GIC sold down its direct stake to less

than 1 per cent but still holds an indirect

stake through an investment in Centur-

ium Capital Partners, according to peo-

ple with direct knowledge of the matter.

BlackRock, GIC and Melvin Capital

declined to comment.

David Li, Centurium Capital’s

founder, was “shocked” to learn of the

alleged fabrication, his spokesman told

the Financial Times. Centurium led

both A and B financing rounds for the

group in 2018 before it went public,

investing about $180m in total.

Mr Li still serves on Luckin’s board of

directors but sold down a small portion

of his firm’s stake in the company earlier

this year for $232m, his spokesman said.

LDC said it was too early to conclude

what the allegations would mean for its

investment with Luckin. “LDC consid-

ers the quality and integrity of financial

reporting to be an essential pillar of any

business and looks forward to receiving

the full findings of the investigations, as

soon as they are available,” said a

spokeswoman.

However, several investors who

turned down the chance to back Luckin

over the past two years said stated reve-

nue growth of more than 500 per cent

had been a red flag.

“It is the typical excess that you find

at the end of a bull market,” said one

investor.

Financials

Luckin Coffee

scandal

catches out

top global

investors

In its IPO prospectus

Luckin said the coffee

chain would be the largest

in China by the end of 2019

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