Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Memorandum submitted by Farmforce

  Originally, a very adequate licensing system was introduced in 1973 (document PL 919) in line with the white paper on employment. The legislation required all gangmasters/agencies to be licensed. The cost was £400 per year, which involved compliance with the Employment Agencies and Employment Business regulations (white paper 1976 No 715). Any agency applying for a license was obliged to publish its application in the local newspaper, giving the opportunity for persons with any grievances to contact the Department of Employment (who were responsible for the licensing) to provide them with relevant information.

  Under this scheme the department of employment made two visits a year to the address of the agency/gangmaster to check all relevant records, applications forms and pay deduction details were being correctly administered.

  Unfortunately, the government of the day decided to scrap the scheme in 1994. I can only surmise this was carried out by the change of legislation in the EU, making room for the development of machinery rings, which included local casual labour supplies.

  Prior to licensing, gang labour was completely out of control and in some cases very violent. The police usually accompanied inspections in areas such as Lincolnshire and Norfolk.

  The implementation of the licensing procedure was fairly successful, with the revenue from the license coverings operational costs to a large extent. It also gave the necessary powers to Tax, NI, VAT & Department of Employment to implement legislation, allowing the imposition of heavy fines to those who breached the regulations.

  It also gave a vehicle to employees to voice and complaints without retaliation by the agency/gangmaster.

  The conclusions drawn about gangmasters are similar to those on previous occasions, although overseas workers were not so prevalent at that time.

  1.  Farmers are dependent on casual workers, but do not wish to pay legal rates of pay. Demand for casual labour will expand.

  2.  Supermarkets do play an important role in this matter. Their pricing controls have created the situation where it is uneconomic for directly employed labour to exist in the horticultural/food sector. The main requirement is for as large a profit as possible at any cost. Perhaps guidance of on farm crops pricing is necessary for Supermarket buyers, which would certainly help to resolve the employment situation. Supermarkets do lay down strict requirement for produce production, but do not mirror those requirements for incoming goods produced outside the U.K.

  3.  As a company we have never heard of operation Gangmaster.

  4.  The title definition of a gangmaster/employment agency needs to be clarified. Are their rights under the employment law etc., the same?

  5.  MAFF booklet! We have never heard or seen any such booklet.

  6.  As a Company we have continued to voluntarily operate the requirements under the 1975 employment agencies white paper. We feel this sets a standard, which could easily followed throughout the U.K. with the assistance of the relevant computer programmes.

  7.  Cost, to a certain extent the licensing charges will make the system self financing.

  8.  SAWS. This is a problem area for bonafide agencies. Allowing SAWS personal to carry out work outside their remit, which is traditionally carried out by U.K. workers leads to cancellation of agency bookings, redundancies and fewer full time workers. To supply agency staff, which have Tax, N.I., holidays and work time restrictions is expensive. Staff from SAWS are less experienced and cheap.

  SAWS staff are not always provided with the best of conditions, Farmers can send them to other Farms without the necessary checks, and in a great many cases without Tax and N.I. deductions.

  Trading by our Company has been affected, with a 75% reduction for seasonal harvesting work and cultivation's. At present Dairying positions are being cancelled, with staff from Poland being supplied by a gangmaster, although these people do not have any experience they are cheap, 50% less than normal charges with probably no NI or Tax deductions. These workers will be out of work when the booking has been completed, when they will, like the rest telephone us to find them alternative work, whether or not they have the relevant visa.

  9.  It would be a great improvement if a licensing system were introduced nationally. This would improve conditions for both agencies and workers.

  10.  For assistance with information concerning gangmasters and agency work, may I suggest you contact all previously licensed businesses.

  11.  If a licensing system was introduced, a national standard could be achieved, hopefully halting the loss of full time U.K. agricultural workers.

  12.  Farmers on the whole look at the price before checking quality. When they have a fixed price contract, labour costs have to fit around the cost structure.

  13.  The NFU and Farmers overall think that legislation can be side stepped and alternatives be found. The NFU is a talking shop, lacking action on its own policies.

  14.  A structure is required to police the overseas labour situation. All labour should have Tax and NI deducted immediately they commence work in the UK. This would avoid unfair competition to the indigenous working population, in other words put a stop to artificially low priced labour.

  15.  Artificially priced labour is creating redundancies among full time workers. The long term's effect will be very serious.

  16.  Improvement of the supply of information regarding overseas workers, requirements etc. is a must.

  To surmise, reintroduction of a licensing system is an urgent requirement due to the introduction of overseas workers and the SAWS & HOPS scheme.

  The problem with people on the schemes, they are being passed around to other Farmers not within the schemes remit, has become fairly common. We now have overseas workers carrying out work which is not scheduled under the schemes, with unofficial gangmasters collecting fees eg (Farmers).

  This type of work would normally be carried out by skilled U.K. workers, but the attraction of low labour charges, which usually means no NI or Tax the UK workers are being undercut, making it very difficult for them to find seasonal harvesting, tractor work and dairywork in their locality or in some cases nationally. This is leading to an exodus of agricultural workers to other employment.

  The long-term picture for British Labour on farms is fairly bleak. When the extensification of the EU is completed with equalisation across the board, evening up pay rates, the cheap labour aspect will disappear, leaving a black hole where British agricultural labour should be, which will be impossible to fill. Action is urgently required. We look to you for this action.

7 April 2003

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