Changes in the supply of and demand
for casual labour
3. Although it is clear that the use of gangmasters
in the agricultural sector is not new, there is evidence to suggest
that the demand for labour has changed over the last twenty years,
and the supply of workers to meet it has changed accordingly.
We recognise the importance to the viability of the agriculture
and horticulture industry of a flexible supply of labour throughout
the year, especially in the light of greater calls for supply
flexibility from the supermarkets.
4. The relationship between supermarkets, their customers
and their suppliers is a key factor in the change in demand for
labour. Over time supermarkets have stopped using wholesale markets
and have begun to buy directly from suppliers, reducing the number
of suppliers with which they contract over time. Consumers now
demand cleaned and packed salads, fruit and vegetables. The supermarkets
which sell this ready-packed produce are now open seven days a
week most days of the year. The growing season has also been extended
as a result of changes in plant breeding methods.
5. The net effect of these changes has been that
the work required to provide fresh produce to supermarkets has
changed over the last twenty years. It is less dependent on the
seasons and is not confined to day-time work picking vegetables.
As a result, what was once work that suited second earners in
families, usually women in rural areas who could combine the hours
with family responsibilities, became less attractive to those
who had traditionally carried it out. Other factors, such as increasing
car use, meant that more attractive jobs, often in the supermarkets
themselves, became available to those who had traditionally provided
the main source of gang labour. Students, another source of gang
labour, also began to find more attractive temporary jobs in the
expanding service sector.
6. Packhouses require a supply of labour, sometimes
twenty-four hours per day, and for most of the year. Local communities
can no longer supply the volume of labour and flexibility of labour
required. This has led to workers being brought in from large
towns and cities, and increasingly from abroad, to meet the shortfall.
The work of the gangmasters has had to change as a result.
The role of the gangmaster
Gangmasters play an essential role in the supply of fresh produce. In a typical scenario a supermarket ordering system will identify an increase in demand for a particular product. For example, the demand for salad items increases during spells of hot weather and the supermarket may be running low on its supply of prepared and packed lettuce. The supermarket then places an order with one of its suppliers to provide the required number of bags of lettuce.
In this scenario, the packhouse which will fulfil the order identifies that it needs 30 staff for one day's work to pack the number of bags requested by the supermarket. The packhouse owner will contact a local gangmaster and negotiate a fixed fee to provide the necessary labour. The gangmaster will contact potential workers from a pool of contacts. He will contact each worker and make arrangements to transport them to the packhouse. These people will be directly employed by the gangmaster who is responsible for operating a PAYE system and ensuring that the terms and conditions which he provides comply with the relevant employment legislation.
It is not uncommon for the provision of labour to be sub-contracted further. For example, if the gangmaster in this scenario only has 18 people available to work at short notice, he may sub-contract with another gangmaster or gangmasters to provide the other 12 workers required. The relationship between the original gangmaster and the gangmasters to whom he sub-contracts the supply of the additional labour will be similar to that between the lettuce producer and the first gangmaster. That is, the first gangmaster will pay a fixed price to the subsequent gangmaster to provide the necessary labour. The first gangmaster will probably take a cut. The responsibility for the terms and conditions of the extra workers falls to the second gangmaster.
In some cases such a scenario will involve a number of sub-contracting exercises. Thus the link between the product supplier and the labour employed may be three or four contractual relationships removed.
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Our inquiry
7. There have been longstanding concerns that some gangmasters
are engaged in illegal activity ranging from non-payment of taxes
and National Insurance, to recruiting people from abroad who are
working in the United Kingdom illegally. Sir Richard Body, former
MP for Boston and Skegness, repeatedly highlighted criminal activities
by certain gangmasters in his constituency. In an adjournment
debate in 1997, he described abuses by gangmasters and intimidation
of those who spoke out against them.[3]
Similarly, an investigation for the BBC's Panorama programme in
June 2000 also raised awareness of the problems and particularly
the conditions in which workers were being housed.
8. Recent anecdotal evidence passed to members of
the Committee suggested that these problems are getting worse.
We therefore decided to examine the extent of the problems and
the Government response to them. The terms of reference of our
inquiry were:
"The Committee will examine the activities
of 'gangmasters' in the agricultural and horticultural industries.
It will in particular consider the activities of some gangmasters
in employing illegal immigrants and benefit claimants, and who
flout the Working Time Directive and the National Minimum Wage.
The impact of illegal activities on:
- legitimate gangmasters;
- farmers and other hirers;
- the competitiveness and viability of certain
agricultural practices; and
- supermarkets and other retailers will also be
considered.
The Committee will also look at what might be
done to combat illegal activity by gangmasters, and to improve
the lot of casual workers".[4]
9. We received written evidence from 17 individuals
and organisations. We took oral evidence between May and June
2003 from a range of organisations including the principal trades
union; the Fresh Produce Consortium; the main enforcement agencies,
under the aegis of Operation Gangmaster; and Lord Whitty, Parliamentary
Under-Secretary of State at Defra. We also took oral evidence
from Dr Jennifer Frances from the Institute of Manufacturing at
the University of Cambridge.
10. In addition to the public oral evidence sessions,
representatives of the Committee also met privately with five
gangmasters at two meetings held at Cambridge and Westminster.
We are grateful to all those who gave evidence to the Committee,
particularly Dr Jennifer Frances who arranged our meeting in Cambridge
and those gangmasters who took time from their work to discuss
their experiences with us.
1 In some parts of the country, we were told that the
term 'ganger' is used. The terms appear to be interchangeable. Back
2
Ev 66, para. 2 Back
3
HC Deb 21 May 1997 cc 677-684 Back
4
Environment, Food and Rural Affairs Committee Press Notice of
17 March 2003 Back
