Memorandum submitted by the Transport
and General Workers Union
EXECUTIVE SUMMARY
— Voluntarism has not worked and legislation
is now crucial in order to tackle rogue Gangmasters effectively
— The failure to prevent Gangmasters
operating illegally has meant that millions of pounds per year
in VAT and NI are potentially being lost
— The Employment Agencies Act 1973
has failed to work effectively in policing Gangmaster operation
— The Government has so far failed
to act in an effective and co-ordinated manner in addressing the
issue.
— Operation Gangmaster has been under
resourced, under co-ordinated and not sufficiently prioritised
— Gangmasters' operation stretches
from "plough to plate" and analysis of the situation
should not be limited to traditional agriculture
— Jim Sheridan MP has a broad coalition
of support in favour of his Gangmaster Licensing Bill. This includes
trade unions, industry organisations and retailers
— The T&G believe that the Efra
Committee should support Jim Sheridan's Private Members Bill,
and also support the principle of any forthcoming legislation
being well resourced and effectively enforced
Recommendation 6, Efra Committee Report, Gangmasters
"we conclude that it is unrealistic to
expect the voluntary codes to prevent widespread illegal activity
by gangmasters. The industry must be a major part of the solution;
it can not, however, be expected to stamp out illegal activity
by gangmasters on its own."
INTRODUCTION
1. The Transport and General Workers Union
represents over 120,000 workers employed in the food industry
stretching from "plough to plate". The T&G is recognised
by both Government and industry as the representative voice of
agricultural and horticulture workers in the UK. The T&G constitutes
the workers side of the statutory Agricultural Wages Board, represent
the TUC on the National Rural Affairs Forum and are the majority
trade union on all Health and Safety Executive bodies related
to agriculture.
2. We are therefore pleased to have been
asked—following our oral evidence to the recent Efra Committee
on Gangmasters—to submit written evidence at this particularly
important time. The recent tragic events of Morecambe Bay should
be a wake up call to all of us involved in the food industry and
its supply chain. We believe that Government can no longer afford
to take the voluntarist approach in dealing with rogue Gangmasters.
For the Efra Committee's consideration we include reports conducted
by leading lay expert, Don Pollard, of problems the T&G have
encountered when dealing with Gangmasters [Not printed]. To this
end the T&G have fully supported—along with all other
key stakeholders in industry—Jim Sheridan's Private Members
Bill to register and license Gangmasters.
3. The T&G welcomed the Efra Select
Committee Report in highlighting many of our current concerns
about this acute and growing problem. The T&G agree with Government
that failed voluntarism means "we may need to consider the
possibility of further legislation" (32., Government Response
to EFRA Report). The T&G also believe that Defra data in regard
to the number of Gangworkers could be a substantial underestimate
as the statistics are based on only one period within any year.
We could therefore be looking at a significantly larger pool of
effected workers than currently estimated, and we agree with the
Efra findings that statutory registration would achieve little
"unless it were rigorously enforced" (Recommendation
10, Efra, Gangmasters).
VOLUNTARY CODES:
WELL INTENTIONED
BUT NOT
EFFECTIVE
Mrs Day, Farmforce (Ev 11, Efra Committee Report,
Gangmasters)
"With the combination of no licensing,
no registration, various schemes being chucked in the pot and
stirred around, supermarkets dictating very low prices, I hate
to say it, but at the end of this, if we do not do something,
there is going to be a large, black hole and it is called `agriculture'."
4. The T&G as part of the ETI have welcomed
the Government's action in releasing resources in order for trial
Gangmaster accreditation and audit programmes to take place. However,
as Doug Henderson of the Fresh Produce Consortium stated, in his
oral evidence to the last Efra Committee on Gangmasters
"We have gone down the voluntary route
for the last three or four years and we have used our very best
endeavours to make the voluntary system work. Our conclusion is
that despite the work that we have done, we do need the backing
of legislation to bring this problem under control" (Ev
2, Efra Committee Report, Gangmasters). The T&G—together
with the other key stakeholders—believes that now is the
time for Government intervention.
5. One of the fundamental problems with
the voluntary codes that have been—and are being—tried
is that there is no obligation on any Gangmaster or labour user
to sign up and be involved in any accreditation process. The lack
of obligation means that there are also no fixed sanctions if
Gangmasters or labour users do not get involved in the voluntary
schemes. As we readily acknowledge, there are many law abiding
Gangmasters in operation, unfortunately under a voluntary approach
it will only be those more reputable businesses that will participate.
This creates problems for both workers and business. Workers being
exploited remain hidden as rogue Gangmasters fail to engage with
no threat of sanction, and law abiding businesses suffer as there
is a consequent failure to create a level playing field.
REVENUE: THE
MISSING MILLIONS
6. The T&G believe that the current
failure of Government to co-ordinate and regulate effectively
is costing the Treasury potentially many millions of pounds every
year. As Defra themselves prove, proactive enforcement can help
claw back large sums of previously unidentified money for the
Exchequer:
"The Inland Revenue is aware of the potentially
serious risk to revenue stemming from illegal activity by gangmasters
and it has been working to combat this for several years. Two
IR regions have already formed specialist units to tackle these
risks. During 2002-2003 these units settled 46 investigations
resulting in additional liabilities in excess of £4.3 million
being identified." (Ev 72, Memorandum submitted by Defra,
Efra Committee Report, Gangmasters)
It is important to note that this revenue was
identified from only two of the Government regions. A national,
pro-active enforcement regime would be likely to discover more
"additional liabilities". The T&G believe that creating
an obligation on Gangmasters to register and licence would help
retrieve otherwise lost revenue, by creating a "paper trail"
for officials to follow, therefore enabling a more accurate assessment
of money due, and a more systematic and targeted approach to inspection.
The T&G therefore believe that the recovery of otherwise "lost"
revenue would significantly aid any registration and licensing
scheme to be self-financing.
CURRENT LEGISLATION:
EAA 1973
7. The T&G believe that the current
Employment Agencies Act 1973 has been ineffective in policing
rogue Gangmasters. The Act itself excludes a significant number
of Gangmasters who supervise their workers, and there has only
been one identified prosecution of a Gangmaster under its auspices
since 1977 (Parliamentary Question (152098)3 February 2004:
Column 775W). It is therefore clear that current legislation
is inadequate and that new regulation is needed to deal with rogue
Gangmasters.
OPERATION GANGMASTER:
GOVERNMENT CO
-ORDINATION
8. The T&G welcomed Operation Gangmasteer
in 1998 as a clear step forward in Government thinking towards
the problem of rogue Gangmasters. The initiative brought increased
cross departmental co-operation and a greater acknowledgment of
the role of Government, however, it has been continually hampered
by a lack of resources and a lack of clear lines of responsibility
and accountability (see Efra Rec. 8 & 9). Therefore
the T&G welcomed the EFRA Committee findings:
Recommendations 8 and 9, Efra Committee Report,
Gangmasters
"We recommend that a Defra Minister take
overall responsibility for Operation Gangmaster. The Operation
should be given clear aims and objectives and it should report
regularly on these to the responsible Minister . . . Operation
Gangmaster should have a single budget derived from the budgets
of each of the relevant Government agencies and Departments"
The T&G believe that it is of paramount
importance that there are clear lines of responsibility and that
there are specific budgets for initiatives aimed at targeting
rogue Gangmasters. As has been mentioned previously Government
has already set a precedent for this by freeing resources to engage
in the ETI auditing trials.
9. By the same principle the T&G believe
that following any legislative action requiring Gangmasters to
register and licence, that there should be clear lines of responsibility
and adequate resources available for enforcement. The T&G
believe—like the Efra Committee—that unless "rigorously
enforced" legislation would be ineffective. Government
enforcement of such legislation needs to be proactive, systematic
and targeted, and therefore there needs to be clear Government
leadership. The creation of a Gangmaster enforcement unit within
Defra to co-ordinate and complement existing enforcement agencies—and
backed up by advice and guidance from industry stakeholders—would
help deliver greater focus and accountability.
GANGMASTER OPERATION:
FROM "PLOUGH
TO PLATE"
10. The scope of Gangmaster operation is
widening across the food chain. The results of Dr Jennifer Frances
survey of Gangmasters prove this to be the case (University
of Cambridge, Labour Provision Survey for Agriculture and Fresh
Produce Sector). Gangmasters now consistently supply labour
to the food processing industry, with 75% of survey respondents
stating this to be the case for their business. In the same survey
85% said that they considered Packhouse work to be one of the
most important areas of business, and 60% stated food processing.
It is clear from such evidence that any legislation enacted needs
to cover the food chain as a whole, not just land-based agriculture
and horticulture.
COALITION FOR
GOVERNMENT REGULATION
AND ENFORCEMENT
11. There is a broad and growing coalition
of support in favour of the principle of Government legislation
in relation to Gangmasters. The coalition spans trade unions,
business federations, the major retailers, welfare groups and
the religious community. The ETI working group on Gangmasters
represents a broad base of this coalition and has long been working
to find practical solutions to the problem—all members are
in favour of Government intervention. The NFU in their oral evidence
to the last Efra Committee made clear their support for legislation
and effective enforcement:
Mr Paske, NFU (Ev 16)
"I hope in our evidence that we will
be able to show you that we are prepared to make a stand on this
issue and make sure that proper enforcement is put in place and
also ask you to use your influence to have a statutory system
put into place as quickly as possible."
The support for Jim Sheridan's Private Members Bill
is equally as strong and broad.
The organisations which have signed up to the
"Gangmaster Licensing and Registration Bill" include:
— The National Farmers' Union.
— The Fresh Produce Consortium.
— The Recruitment Employment Confederation
(which represents employment agencies).
— Fusion Personnel (a legitimate labour
provider).
— Transport & General Workers Union.
— Joint Council for the Welfare of
Immigrants.
— Family Welfare Association.
— Ethical Trading Initiative.
— The Catholic Bishops Conference of
England & Wales.
— Institute of Employment Rights.
— Rt Rev Patrick O'Donoghue, Bishop
of Lancaster.
— National Association of Citizens'
Advice Bureaux.
— Keystone Development Trust.
— Portuguese Workers Association.
JIM SHERIDAN:
GANGMASTER REGISTRATION
AND LICENSING
BILL
12. The T&G would clearly be delighted
if the EFRA Committee, in light of the broad and growing coalition
of support, would itself endorse the principle of registration,
licensing and effective enforcement. The T&G believe—like
the EFRA Committee—that it is "unrealistic to expect
the voluntary codes to prevent widespread illegal activity"
and recommend that the time for Parliamentary support for legislation
is now. Jim Sheridan's Bill offers that opportunity, and the T&G
hope that the "Gangmaster Registration and Licensing Bill"
is enacted as a fitting tribute to those who died tragically at
Morecambe Bay.
March 2004
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