Memorandum submitted by the Association
of Labour Providers
SUMMARY
1. The Environment, Food and Rural Affairs
Committee of the House of Commons published a report on gangmasters
in September 2003. The Committee is following up this report by
monitoring the action taken by government and assessing whether
there is a need for further action.
2. The Association of Labour Providers is
the newly established trade association for labour providers—"gangmasters."
This evidence is based on the practical experience of members.
3. The main developments since September
2003 are:
— No strengthening of enforcement action
against disreputable gangmasters and no visible evidence of a
more joined-up approach.
— Progress in establishing a code of
practice for labour providers.
— The establishment of a trade association
to represent the interest of labour providers.
— The beginning of the process to establish
a statutory licensing regime.
THE ALP
4. The Association of Labour Providers was
established in February, initially by 18 companies that wish to
help improve standards in the industry further and also to have
a voice in the many public policy discussions about their industry.
Currently the Association has 23 members. While there is considerable
interest in the Association is not proving easy to sell the concept
of a trade association to this group of organisations.
ENFORCEMENT OF
EXISTING LEGISLATION
5. The activities of labour providers which
cause public concern are illegal under present legislation. The
tragic incident at Morecambe Bill has served to highlight the
issues. However, Morecambe Bay also illustrates the problem of
addressing the issues. In this case the workers appear to have
been working for the person selling the cockles and who therefore
was not a "gangmaster" but rather a farmer or fisherman.
Clearly, there was a breach of the law but little progress seems
to have been made in bringing the perpetrators to justice.
6. Regulatory bodies tend to pursue regulated
institutions and the formal parts of the economy and are not well
placed to tackle the major abuses, particularly where there is
no fixed place of work. Dealing with unscrupulous labour providers
requires multi-agency, intelligence-driven and innovative approaches
to enforcement rather than the traditional "inspection"
approach by individual government departments.
7. Members of the ALP can see no evidence
of any change in the government approach since last September.
Indeed, in some respect enforcement activity has diminished because
of lack of resources. Generally, the resources available to tackle
the problems are hopelessly inadequate, and individual enforcement
agencies are not inclined to make resources available for initiatives
from other bits of government. Members also report that enforcement
agencies are more inclined to go after "soft" targets
rather than major problems.
8. Members continue to be squeezed, on the
one hand through supply chain attempts to drive prices down, and
on the other by being undercut by labour providers who operate
illegally. A labour provider evading VAT and income tax and paying
less than the minimum wage can easily have a 40% price advantage
over a legitimate operator. Combined action by the Inland Revenue
and Customs and Excise against tax evasion is essential if the
illegal gangmasters are to be put out of business. The reputable
labour providers have the greatest interest in driving disreputable
operators out of the industry.
CODE OF
PRACTICE
9. Work continues to establish a code of
practice under the auspices of the Ethical Trading Initiative.
This will be a voluntary arrangement. However, if packhouses,
farmers and supermarkets ensure that they and their suppliers
use only labour providers that subscribe to the code then this
should help drive the unscrupulous labour providers out of business.
10. It is important that this initiative
is not slowed down by the prospect of legislation. It will take
at least two years to introduce a statutory licensing regime if
the usual standards apply, and the problems must be tackled in
the meantime. The experience with the code should also help to
inform the details of the licensing regime when this is introduced.
11. Members of the ALP agree to be bound
by the terms of any code of practice endorsed by the Executive
Committee; it is the intention to endorse the code being drawn
up under the auspices of the ETI. In the meantime the Association
is considering introducing a basic version of the code, sufficient
to help ensure that the legal requirements are being met. The
Committee will be kept informed of progress on this.
LEGISLATION
12. The Gangmasters Licensing Bill has now
been taken over by the government and will be enacted. The legislation
can be justified only if it facilitates the enforcement of existing
legislation by the existing enforcement agencies. This requires
additional resources and inter-agency co-operation. These cannot
be secured through the gangmaster legislation. Unless this is
addressed the legislation will achieve nothing and will draw attention
away from the real issues.
11 March 2004
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