Annex 3
Briefing note prepared prior to meeting
with Beverley Hughes MP Minister of State for the Home Office,
Lord (Larry) Whitty Parliamentary Under Secretary of State for
DEFRA (11 March 2003)
BACKGROUND
The use of gangmasters and employment agencies
as providers of temporary labour is of vital economic importance
to the produce industry. They provide the industry with a flexible
workforce to meet the seasonal demands of planting, harvesting
and packing crops and the market demands of fluctuating daily
and seasonal retail requirements.
It is estimated that the industry employs some
72,000 people on this basis, 50% of whom are supplied by Gangmasters.
Although this system of temporary work is legal,
there is evidence that some providers of temporary labour and
their sub-contractors are operating outside the legislative framework.
There is also evidence of collusion between the providers, the
sub-contractors they employ and the workers they supply, with
criminal intent to defraud.
What evidence is available suggests a system
in which abusive, evasive and fraudulent activities are frequent:
— non compliance with national and/or
agricultural minimum wage;
— unlawful deductions from wages;
— use of casual workers who are DSS
recipients;
— use of illegal immigrant labour;
— use of underage workers;
— acceptance by providers of a bogus
self employment status from workers causing a loss of NICs;
— evasion of the declaration and payment
of tax and NICs;
— non-registration for VAT;
— evasion of the payment of VAT.
ACTION TAKEN
Action has been taken by both government and
industry to ensure that the providers of labour, their sub-contractors
and the workers they supply are managed in such a manner that
all their activities are brought within the current legislative
framework.
GOVERNMENT
Following an interdepartmental working party's
report, Operation Gangmaster was established to co-ordinate the
activities of a number of Government agencies involved with enforcing
the laws that were being broken. The mainstay of this initiative
has been the Agricultural Investigation Team, part of the Department
of Work and Pensions fraud investigation service.
As a result of Operation Gangmaster:
— explanatory booklets have been published;
— awareness of the issues has been
raised;
— advice has been given to businesses;
— business premises have been raided;
— prosecution of Gangmasters has taken
place;
— regular multi-agency meetings have
been held.
INDUSTRY
Voluntary Codes of Practice have been developed
in collaboration with the Government covering both field and packhouse
workers. The supermarkets have adopted the packhouse code of practice
as a supplier requirement.
— the voluntary codes have been widely
circulated;
— awareness of the issues has been
raised;
— supplier meetings have been held;
— advice has been given to businesses;
— there has been close co-operation
with Operation Gangmaster.
CURRENT SITUATION
Under the auspices of the Ethical Trading Initiative
two very well attended seminars, involving all interested parties,
were held last year to review progress on resolving this issue.
Whilst concrete evidence is difficult to obtain,
there was unanimity of opinion that the abuses, evasions and fraudulent
activities were getting more widespread. There was also unanimity
of opinion that this deteriorating situation would get worse as
organised crime becomes progressively more involved in this activity.
PROPOSALS
As a result of the seminars a working party
was established to determine what further action should be taken.
We now wish to propose the following steps that we believe are
absolutely essential if this problem is to be resolved:
(1) A Code of Practice for the providers
of temporary labour be developed.
(2) Legislation be passed to enable the statutory
registration of providers of temporary labour.
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