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
15Offences:
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.
At present,
under section 5(2) of the 1973 Act any breach of the regulations
governing employment agencies is a criminal offence, triable as a
summary offence in a magistrates court. The experience of the
Employment
Agency Standards Inspectorate, which is the part of the Department for
Business, Enterprise and Regulatory Reform that polices this area of
labour market providers, has been that, although the present approach
has proved effective for the great majority of agencies that are
reputable and wish to comply with the regulations, it has not been as
effective as it might be for the very few agencies that seek to avoid
their legal responsibilities and refuse to comply with the legislation.
This issue was taken up by Conservative Front Benchers, who asked me
several times why there were not more prosecutions under the agency
standards rules. That lack of prosecutions has been part of the problem
in this
area. 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. Some
circumstances are quite specific to agency work, such as issues to do
with the vulnerability of workers and the powers of the standards
inspectorate to prohibit
people from running agencies. The question of whether such prohibitions
can be properly enforced when contravening them can be highly
profitable gives rise to some issues. In those circumstances, we have
to ask ourselves whether a £5,000 fine is high enough. The
judgment that the Government have made is that it is not. In those
circumstances, we seek the power to try such offences in a higher
court. 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
16Enforcement
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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