Employment Bill [Lords]

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Mr. Djanogly: We support the clause and have seen significant evidence that voluntary workers have been left out of pocket because of their inability to claim expenses. I would imagine that some likely volunteers have been unable to volunteer because of that. We hope therefore that the clause will encourage more people to volunteer.
Lorely Burt: We also support the clause and acknowledge the tremendous work that volunteers do. It never ceases to amaze me just how willing people are to give of their time, and it is right that they should be reimbursed for any expenses that they incur. On the accommodation aspect of the clause, will the Minister explain the difference between someone finding accommodation and then having to get the charity to pay the bill, and paying the bill themselves and then submitting it to the charity? That could present some logistical difficulties.
Mr. McFadden: Accommodation was discussed in another place, too. If an employer or landlord is providing free accommodation in return for the work, the worker would be entitled to the minimum wage. That is the case regardless of whether the worker is employed elsewhere. We took the view that to make provision otherwise would enable employers to provide accommodation in return for work rather than pay the worker a wage. All the way through the Bill, we are trying to strike a balance between appropriately supporting voluntary work and workers without sanctioning a sub-minimum wage and a series of jobs emerging around the voluntary sector. That will apply to child care, travel expenses and accommodation, where the rent is paid directly to a landlord. In the round, we think that that is the right balance to have struck.
Question put and agreed to.
Clause 14 ordered to stand part of the Bill.

Clause 15

Offences: mode of trial and penalties
Question proposed, That the clause stand part of the Bill.
Mr. McFadden: I will try not to repeat the fairly lengthy discussion that we had about offences that are triable either way, in the magistrates or Crown court. However, clause 15 covers very similar ground, except that in this case we are talking about offences under the Employment Agencies Act 1973.
5.30 pm
As hon. Members will be aware, employment agencies and agency work have been rising higher up the political agenda in recent years. The Committee will be pleased to hear that I do not want to take us down the highways and byways of European directives. However, at the same time as we are strengthening enforcement of the minimum wage, we also want to strengthen enforcement of the regulations surrounding agency work.
There are difficulties related to the limitations of prosecution for summary offences in terms of adequacy of penalties and limitations of prosecution powers. The most significant problem occurs when an individual who has been prohibited from running an agency, because of their unsuitability on account of misconduct, ignores a ban on running an agency. The maximum penalty for breach of a prohibition order is a fine of £5,000, as we discussed before when we talked about other offences that are triable in a magistrates court. Such a fine may not be an effective deterrent where the agency is highly profitable.
We are talking about quite specific circumstances here, where someone can be prohibited from running an agency but they ignore that prohibition because the activity is so profitable and the maximum fine is £5,000. In addition, the penalties may not be adequate for cases where agencies illegally charge, or seek to charge, for work-finding services, or where they fail to pay agency workers for the work that they have done.
At the moment, under the current system there is no scope for the Employment Agency Standards Inspectorate to prosecute for “attempting” to commit offences under the legislation. Again, this means that the inspectorate needs to identify witnesses who are prepared to give evidence against the agency.
I am not someone who says that all agency work is at the dark end of the economy; I do not believe that. I believe that many agencies give very valuable flexibility and, often, highly paid work to the agency workers whom they employ or find work for. Nevertheless, in some instances we are dealing with dark corners of the labour market, and we know that in those circumstances, relying on witnesses to come forward and give evidence can be difficult. Therefore, we are again seeking here to strengthen the enforcement regime. That can be difficult because some people feel—particularly when they may need to have repeated contact with an agency to get work time after time on short placements—that if they give evidence, the work from that agency may dry up. Of course, we also often deal with migrant workers who are travelling to and from their home countries.
By making the most serious offences under the 1973 Act triable on indictment or summarily in magistrates courts, the maximum penalty will be increased to an unlimited fine when the case is tried on indictment under clause 15. The clause is important in ensuring that there are appropriate parities for the most serious cases of offences under the 1973 Act, for the reasons that I have set out.
Mr. Djanogly: On the question of the clause and the 1973 Act, we feel that the extension of criminal chargeability is valid and justifiable in these circumstances. We have seen instances where the existing powers are not adequate, just as we said that we saw that the powers were not adequate when discussing clause 11. To that extent, we have not tabled any amendments and will support the clause.
Question put and agreed to.
Clause 15 ordered to stand part of the Bill.

Clause 16

Enforcement powers
Question proposed, That the clause stand part of the Bill.
Mr. McFadden: The clause relates not so much to how offences are tried as to the wider powers of the agency standards inspectors. It will increase those powers by enabling inspectors to require a person carrying on an agency to provide financial records and documents. It will enable them to require records, documents and information at a time and place that they may specify. It enables them to require banks to provide financial information regarding agencies. I will say more about that in a moment. The clause will also enable inspectors to remove documents from an agency in order to take copies. We dealt with some of those issues this morning when discussing minimum wage enforcement.
Again, there are currently problems in assessing the scale of abuses, which compromises the effectiveness of enforcement against rogue and disreputable agencies. There is an absence of powers to obtain financial records from agencies. For example, an agency worker may come forward and say that the regulations are being contravened. They might not be getting paid properly, or they might be being levied with illegal deductions. Even if that case is proved, it can be difficult for the Employment Agency Standards Inspectorate to know whether it is an isolated case or whether such practices are rife in the company.
When investigating serious complaints, the inspectorate needs to find out the scale of the illegal practices being carried out by agencies brought to their attention. If illegal payments have been made or illegal deductions taken, it must know whether those are isolated cases or whether they are widespread. Given the reluctance of agency workers to come forward, it may be that significant numbers of workers are in the same situation and have not had the courage to report it.
At present, the inspectorate does not have powers to obtain financial information from an agency that does not want to provide that information. An inspector does have the power to request any person present on the premises to inform him of the whereabouts of any record or document that is not on the premises and to make arrangements for it to be made available. Frequently, the person on the premises is not the person in charge of the agency. This is a particular difficulty when dealing with a three-party relationship in which the hirer, the agency and the worker are all involved. The person in the hiring company will not necessarily know where those records are. Inspectors have encountered difficulty in obtaining information from agencies where a former member of staff may have removed self-incriminating evidence, or where records are being withheld that may point to another person’s being involved in the running of the agency—again, in cases where there is a prohibition and so on.
So there are a number of circumstances where extra information-gathering powers can help. That is why we believe that the clause will strengthen the powers of the Employment Agency Standards Inspectorate and allow it to look not just at individual cases reported to it but, on the basis of those reports, to find the necessary information to enable it to judge whether they are isolated incidents or a wider practice that requires a wider response.
Mr. Djanogly: Yes, we feel that the provisions are justified. It is important to stress that we are dealing with a small number of employment agencies here. The vast majority are excellent employers; in fact they are among the best because of the nature of what they do. However, in circumstances where wrong is being done, the situation could be very bad, so provisions such as this are correct and we will support the clause.
Question put and agreed to.
Clause 16 ordered to stand part of the Bill.
Clause 17 ordered to stand part of the Bill.
Further consideration adjourned.—[Claire Ward.]
Adjourned accordingly at nineteen minutes to Six o’clock.
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