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Session 2003 - 04
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Gangmasters (Licensing) Bill


 

These notes refer to the Gangmasters (Licensing) Bill
as brought from the House of Commons on 24th May 2004 [HL Bill 74]

GANGMASTERS (LICENSING) BILL

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EXPLANATORY NOTES

INTRODUCTION

1.     These explanatory notes relate to the Gangmasters (Licensing) Bill as brought from the House of Commons on 24th May 2004. They have been prepared by the Department for Environment, Food and Rural Affairs on behalf of Lord Carter in order to assist the reader of the Bill and to help inform debate on it. They do not form a part of the Bill and have not been endorsed by Parliament.

2.     These notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. Where a clause or part of a clause does not seem to require any explanation or comment, none is given.

SUMMARY AND BACKGROUND

3.     The purpose of the Gangmasters (Licensing) Bill is to introduce licensing arrangements for gangmasters who supply, or in certain circumstances use, workers involved in:

  • agricultural activities

  • gathering shellfish

  • related processing and packaging activities.

There is scope in the Bill to extend this list to include gathering other wild creatures, wild plants and harvesting fish from fish farms together with associated processing and packaging activities if appropriate. The key objective behind this Bill is to curb the exploitative activities of agricultural gangmasters. The aim is to secure this objective without disrupting the flexible supply of seasonal and casual labour on which the agriculture and horticulture industry is heavily dependent.

4.     There is nothing illegal in the activity undertaken by gangmasters and some run legitimate businesses within the law. However, a number of gangmasters are meeting seasonal and casual labour shortages by supplying people who are working in the UK illegally and UKcitizens who are working whilst in receipt of benefit. Others are ignoring the basic rights of the people they employ e.g. to receive the minimum wage and are profiting at their expense. The licensing scheme that this Bill introduces will help curb these activities.

THE BILL

5.     The provisions of the Bill are arranged under seven headings as follows:

  • The Gangmasters Licensing Authority

  • Scope of the Bill

  • Licensing

  • Offences

  • Enforcement

  • Supplementary (in relation to corporate bodies, unincorporated associations and partnerships)

  • Miscellaneous and general matters (including the application of the Bill in Northern Ireland and commencement provisions).

COMMENTARY ON CLAUSES

Clause 1 - The Gangmasters Licensing Authority

6.     This clause establishes a new body to be known as the Gangmasters Licensing Authority, details its functions and gives the Secretary of State power to make regulations in respect of the status and constitution of the Authority and related matters.

7.     Clause 1(2) sets out the functions of the Authority. In particular it is to:

  • carry out the functions relating to licensing given to it by the Bill

  • carry out inspections of licensed gangmasters to ensure that they are complying with the terms of their licences

  • review the activities of gangmasters

  • supply information held by the Authority to other parties specified in the Bill (e.g. government departments and enforcement agencies)

  • review the operation of the Bill.

The Secretary of State can prescribe other functions in regulations.

8.     Clause 1(3) allows the Authority to do anything it considers necessary to enable it to carry out its functions.

9.     Clause 1(4) states that the Authority is not a servant or an agent of the Crown.

10.     Clause 1(5) gives the Secretary of State the power to introduce regulations on:

  • the status and constitution of the Authority

  • the appointment of members to the Authority

  • payment of remuneration and expenses to members of the Authority

  • other matters relating to the establishment and operation of the Authority which she considers necessary.

11.     Clause 1(6) gives effect to Schedule 1 which makes consequential amendments to other legislation to take account of the establishment of the Authority.

Clause 2 - Directions etc. by the Secretary of State

12.     This clause gives the Secretary of State the power to direct the Authority to undertake specific action. This is primarily a contingency power which the Secretary of State can utilise to require the authority to follow a specific course of action or to act in a specific way. Clause 2(1) requires the Gangmasters Licensing Authority to comply with any general or specific directions given to it in writing by the Secretary of State. Clause 2(2) requires the Secretary of State to consult the Authority before issuing directions. Clause 2(3) requires the Authority to provide any information about its activities requested by the Secretary of State.

Clause 3 - work to which this Bill applies

13.     Clause 3 defines the work to which the Bill will apply as agricultural work, gathering shellfish and processing or packaging of:

  • any produce derived from agricultural work, or

  • shellfish, fish or products derived from shellfish or fish.

The definitions of "agriculture" and "consumable produce" in clause 3(3) are based on the definitions in the Agricultural Wages Act 1948 and it is anticipated that they will be interpreted in accordance with case law that has developed under that Act.

14.     Clause 3(4) defines "shellfish" in the widest sense.

15.     It is recognised that work to which the Bill applies has been defined in very wide terms. It would for example include people working in food factories producing ready-made meals, soups etc. (assuming they were supplied by or working for a person acting as a gangmaster). The Secretary of State is therefore given the power to make regulations under clause 3(5)(a) excluding specified work from the scope of the Bill.

16.     Clause 3(5)(b) recognises that in future there may be other gathering or fish farming activities which need to be brought within the scope of the Bill. The Secretary of State is therefore given the power at Clause 3(5)(b) to make regulations bringing specified work (gathering wild creatures or wild plants and harvesting fish from a fish farm) within the scope of the work to which the Bill applies. These powers cannot be used to include gangmasters operating in other areas e.g. construction as this would go beyond the scope of the Bill as introduced in to the House of Commons.

Clause 4 - Acting as a gangmaster

17.     Clause 4 defines what is meant by a person acting as a gangmaster. This definition has been deliberately drafted in wide terms in order to bring all those involved in the supply and in certain circumstances use of gang labour within the ambit of the licensing scheme the Bill provides for. Clauses 4(2), (4) and (5) set out three circumstances in which a person is regarded as acting as a gangmaster for the purposes of the Bill.

18.     Clause 4(2) provides that a person acts as gangmaster if he supplies a worker to do work to which the Bill applies for another person. Clause 4(3) clarifies the different types of arrangements that fall within the scope of cause 4 subsection (2) as follows:

  • Clause 4(3)(a) clarifies that a person, A (primary labour provider), is caught by subsection (2) whether he employs or engages the workers and supplies the labour directly to B (the labour user) or whether another person, D (a secondary labour provider), employs or engages the workers and supplies them to A who then supplies the labour to B. These situations are caught whether or not the primary labour provider (A) supervises the work undertaken

  • Clause 4(3)(b) is intended to catch the supply of labour by sub-contract gangmasters. It clarifies that a person, D (a secondary labour provider), is caught by subsection (2) if he employs and supplies workers to A (a primary labour provider) who supplies labour to B (the labour user) and also if he employs workers and has a contract with A to supply them directly to B

  • Clause 4(3)(c) clarifies that a person, A (the primary labour provider), is caught by subsection (2) if he has a contract with D (a secondary labour provider) under which D supplies workers employed by him direct to B (the labour user)

  • Clause 4(3)(d) clarifies that in the supply of labour from A to B it does not matter whether the workers supplied are working under the control of A, B or an intermediary

  • Clause 4(3)(e) clarifies that a person, D (a secondary labour provider), who employs workers and supplies them to B (the labour user) is caught by subsection (2) whether B is the end user of the labour or another gangmaster using the workers to provide a service to the end user This will cover arrangements such as a sub-contractor supplying workers to a main gangmaster who is engaged by a third party client to clear a field of peas.

19.     Clause 4(4) provides that a person is acting as a gangmaster if he uses workers to provide a service to a client. This will cover arrangements as mentioned in relation to clause 4(3)(e) i.e. a gangmaster using workers to clear a field of peas for a client. This is intended to avoid any potential loophole under which gangmasters structure contractual arrangements so that they supply a service to the client rather than supplying the client with workers.

20.     Clause 4(5)(a) provides that a person acts as a gangmaster if, for the purposes of his business he uses labour to harvest or gather agricultural produce which he has purchased, leased or been assigned for the purpose of harvesting or gathering. The purpose of this clause is to close a potential loophole whereby a gangmaster and the labour user enter into an agreement of this type which would obviate the need for the supply of labour.

21.     Clause 4(5)(b) provides that a person acts as a gangmaster if he uses any worker to gather shellfish for the purposes of his business. This brings all shellfish gathering within the provisions of the licensing scheme. This includes an arrangement where labour is supplied to the labour user and also where gang labour is employed and used by a person on his own account.

22.     Clause 4(5)(c) provides that a person is acting as a gangmaster where, for the purposes of a business carried on by him, he uses labour to package or process agricultural produce which has been harvested or gathered by workers following a sale, assignment or lease of the produce to the gangmaster.

23.     Clause 4(6)(a) provides that for the purposes of clauses 4(4) and 4(5) a person is treated as using a worker to do work to which this Bill applies if he makes arrangements under which the worker does the work, whether the workers work for him, another or on their own account, and whether or not the workers work under a contract. This clause is intended to prevent gangmasters circumventing the licensing scheme by setting up workers as self employed businesses who supply a service or sell produce to the gangmaster.

24.     Clause 4(7) provides that regulations under clause 3(5)(b) that bring any new work within the scope of the Bill may provide for the application of clauses 4(5) and 4(6) to that work.

Clause 5 - Territorial scope of application

25.     Clause 5 ensures that the Bill applies to work done in the United Kingdom and on the shore or sea bed (above or below the low water mark) or in UK coastal waters. The reference to coastal waters is of particular relevance in relation to gathering shellfish. While most cockle beds are exposed at low water, some shellfish are gathered in the shallows just below the low water mark. It is envisaged that the regulation making powers at clause 3(5)(a) will be used to exclude the gathering of shellfish at sea e.g. scallops collected using dredgers and lobsters / crabs gathered from pots.

26.     Clause 5(3) provides that the provisions of the Bill apply to a person acting as a gangmaster in the UK or elsewhere in relation to work to which the Bill applies. This ensures that an overseas gangmaster supplying or using workers to do work in the UK must have a licence.

Clause 6 - Prohibition of unlicensed activities

27.     Clause 6 provides that a person may only act as a gangmaster if authorised to do so by a licence.

28.     The intention is that everyone acting as a gangmaster should be required to be authorised to do so by a licence. However, the definition of "acting as a gangmaster" in clause 4 is widely drawn. Consequently it is envisaged that in certain situations (e.g. where a conventional farm contracting business employs workers on long term contracts and, the supply of labour by the charities acting as operators under the Seasonal Agricultural Workers Scheme) it would be appropriate for the supply of labour to take place without a licence. Provision has therefore been made in clause 6(2) giving the Secretary of State the power to make regulations specifying circumstances where a licence is not required.

Clause 7 - Grant of a licence

29.     Clause 7 gives the Gangmasters Licensing Authority power to grant licences and deals with the way in which licences are granted. It ensures that the licence only authorises activities by persons acting on behalf of the licence holder if they are named or otherwise specified in the licence (e.g. by reference to their function).

30.     Clause 7(2) states that the licence must describe the activities authorised by it and that it should be granted for a specific period determined by the Authority.

31.     Clause 7(4) clarifies that in the case of a body corporate, association or partnership the licence authorises activities by persons mentioned in clauses 20 (2), 21(2) and 22(4) respectively.

32.     Clause 7(5) states that a licence shall be granted subject to conditions determined by the Gangmasters Licensing Authority.

Clause 8 - General powers of the Authority to make rules

33.     Clause 8 gives the Authority the power to make rules in connection with licences. The Authority has autonomy in all matters except fees. Rules will be made by a negative resolution Statutory Instrument (see clause 25).

34.     Clause 8(2) gives an indicative list of the things that might be covered by the rules. Rules may in particular:

  • establish the form and content of applications for licences and other documents

  • regulate the procedures to be followed in respect of applications for a licence

  • set time limits to be complied with when making an application and provide for extensions

  • detail the requirements which must be met before a licence is granted;

  • determine how compliance with those requirements will be verified;

  • allow provisional licences to be granted

  • prescribe the form of the licences and the information to be contained in them

  • require payment of fees

  • provide that licences must be granted subject to certain conditions (in relation to the evidence required to demonstrate that a licence has been granted and the recruitment and supply of workers).

35.     Clause 8(3) requires the Authority to consult the Secretary of State before making rules about fees.

Clause 9 - Modification, revocation or transfer of a licence

36.      Clause 9 allows the Authority to vary licences e.g. if the licence holder's business details change or the details of its employees require amendment. Licences may be revoked (e.g. if it appears to the Authority that a condition of the licence has not been complied with). All such changes must be notified to the licence holder in writing.

37.     Clause 9(3) makes provision for the licence to be transferred with the written consent of the Authority (e.g. where a business changes hands).

Clause 10 - Appeals

38.     Clause 10 requires the Secretary of State to make regulations that establish an appeals process to deal with appeals against decisions made by the Authority. The regulations must make provision for the appeals process to deal with a:

  • decision to refuse an application for a licence

  • decision about the conditions of the licence

  • refusal to transfer a licence

  • decision to modify or revoke a licence.

39.     Clause 10(2) requires the regulations to make provision for the appointment of a person to hear and determine appeals and for the procedure to be followed in connection with an appeal.

Clause 11 - Register of licences

40.     Clause 11 requires the Authority to establish and maintain a register of licensed gangmasters. It also provides that the register must contain particulars of every person holding a licence or whose activities are authorised by the licence. It gives the Authority the power to determine what particulars should be included in the register.

41.     Clause 11(3) requires the Authority to ensure that the register is available for inspection to the public.

Clause 12 - Offences: acting as a gangmaster, being in possession of false documents etc.

42.     Clause 12 makes it an offence for a person to operate as a gangmaster without a licence. It also creates offences in connection with relevant documents (which are defined as being a licence or a document issued by the Authority in connection with a licence). It makes it an offence to hold:

  • a relevant document that is known or believed to be false

  • a relevant document obtained by deception and known or believed to have been so obtained

  • a relevant document that relates to someone else

with the intention of causing a third party to believe that the person in possession of the documentation or another person is a licensed gangmaster. However clause 12(1) makes it clear that a gangmaster who breaches the terms of his licence does not commit an offence under this clause.

43.     The penalties for the offences of operating as a gangmaster without a valid licence and for being in possession of false or improperly obtained relevant documents are specified at clauses 12(3) and (4). For a summary conviction in England and Wales the maximum penalty is 12 months imprisonment (6 months until the relevant provisions of the Criminal Justice Act 2003 are commenced), a fine or both. Specific provision is also made for offences in Scotland and Northern Ireland where similar penalties apply. For a conviction on indictment the maximum period of imprisonment rises to 10 years imprisonment. Sentencing policy is a matter for the Courts. However, we would expect sentences at the higher end of the scale to be imposed for more serious offences e.g. those involving organised crime, harm to individuals, persistent / repeat offenders or a blatant disregard of the licensing regime.

Clause 13 - Offences: entering into arrangements with gangmasters

44.     Clause 13 makes it an offence for a farmer or other person to be supplied with workers or services by an unlicensed gangmaster. A defence can be established if the person who engages the gangmaster can prove that he took all reasonable steps to satisfy himself that the gangmaster was acting under the authority of a valid licence and did not know and had no reasonable grounds for suspecting that the gangmaster was not licensed.

45.     Clause 13(3) gives the Secretary of State the power to introduce regulations to clarify the "reasonable steps" necessary to establish the defence.

46.     Clause 13(4) sets out the penalties that apply to these offences. These provide on summary conviction in England or Wales for a prison sentence of up to 51 weeks (6 months until the relevant provisions of the Criminal Justice Act 2003 are commenced), a fine or both. Specific provision is made for offences in Scotland and Northern Ireland where the maximum period of imprisonment is 6 months.

Clause 14 - Offences: supplementary provisions

47.     Enforcement officers have powers of arrest under the Police and Criminal Evidence Act 1984, in respect of the offences of acting as a gangmaster without a licence and using false or improperly obtained documents, by virtue of these offences being arrestable offences under that Act. Clause 14 gives additional powers of arrest relating to those offences for enforcement officers under the Bill. These powers apply to enforcement officers in England, Wales and Northern Ireland and extend the powers of arrest to include the situation where the enforcement officer suspects that an offence has been committed or is about to committed and provides for arrest without a warrant.

48.     Clause 14 (4) amends the "Proceeds of Crime Act 2002" to ensure that where a gangmaster is convicted of an offence of acting as a gangmaster without a licence or using false or improperly obtained documents under this Bill their assets can be sold and the proceeds retained by the Crown. Such offences are known as "life style offences" under the Proceeds of Crime Act.

49.     In England, Wales and Northern Ireland a police officer has powers of arrest in relation to the offences mentioned above under the Police and Criminal Evidence Act 1984.

50.     In Scotland powers of arrest are vested in police constables under the common law.

Clause 15 - Enforcement and compliance officers

51.     Clause 15 establishes two categories of officer to police the provisions of the proposed legislation:

  • Enforcement officers appointed by the Secretary of State to deal with the offences of acting as a gangmaster without a licence or entering into arrangements with gangmasters

  • Compliance officers appointed by the Authority to deal with the need to ensure gangmasters comply with the terms of a licence granted to them.

Clause 15 (2) allows the Secretary of State, instead of appointing enforcement officers, to make arrangements for officers of relevant authorities to be enforcement officers. The relevant authorities are:

  • the Gangmaster Licensing Authority

  • any Minister of the Crown or government department

  • the National Assembly for Wales

  • the Scottish Ministers

  • any body acting on behalf of the Crown.

52.     Clauses 15(5) and (6) oblige enforcement and compliance officers to produce identification when required to do so and to make it known to the person whom they are dealing with that they have the authority to carry out duties under the Bill.

Clause 16 - Powers of officers

53.     Clause 16 sets out the power of enforcement or compliance officers to obtain information from a relevant person. This includes an ability to require the production of records for inspection, to remove them from the premises or to copy any relevant material and to request an explanation of any such records.

54.     Clause 16(2) gives an officer authority to request in writing that records are made available. He can also require a person to attend an interview to provide an explanation about records or additional information which is necessary to establish compliance with licence conditions.

55.     Clauses 16(3) & (4) deal with information held on computer and gives the enforcement or compliance officer access to any computer or related equipment which has been used to keep records.

56.     Clause 16 (5) specifies the relevant persons who can be required to provide information to an officer. A relevant person is someone the officer has reasonable grounds to believe:

  • is acting as a gangmaster

  • is supplied with workers or services by a gangmaster

  • is acting as an employee or agent of a gangmaster or a person who is supplied with services or workers by a gangmaster.

57.     Clause 16(5) defines the premises an officer may enter to exercise his powers under this clause. These include:

  • premises (including vehicles, caravans, tents etc) at which gangmasters or persons entering into arrangements with gangmasters carry on business

  • premises used by such persons in connection with their business.

Clause 17 - Entry by warrant

58.     Clause 17 makes specific provision for entry by an enforcement officer by warrant. Clause 17(1) sets out the procedures by which an enforcement officer can obtain a warrant. Under this clause the justice of the peace issuing the warrant must be satisfied by written information on oath that there are reasonable grounds for the enforcement officer to enter relevant premises to establish whether any person has acted as a gangmaster without the authority of a licence.

59.     The justice of the peace must also be satisfied that:

  • permission to enter the premises has been, or is likely to be, refused and that notice to apply for a warrant has been given to the occupier

  • it is necessary to enter the premises without prior notice

  • the case is of extreme urgency, or

  • that the premises are unoccupied or the occupier is temporarily absent.

60.     Clause 17(2) enables an enforcement officer with a warrant to:

  • be accompanied by persons and take equipment considered necessary

  • inspect and examine the premises to establish whether unlicensed activities have taken place, and

  • take possession of and retain any records or equipment necessary to establish whether any unlicensed activities have taken place.

61.     Clauses 17(3) & (4) provide that when an enforcement officer leaves any unoccupied premises he must ensure that the premises are as effectively secured against trespassers as he found them. In addition an enforcement officer must leave a statement giving details of any item removed from the premises and confirming that he has taken possession of it.

62.     Specific provisions apply in Scotland and Northern Ireland:

  • in Scotland any reference to justice of the peace being satisfied by written information on oath should be read as sheriff or a justice of the peace being satisfied

  • in Northern Ireland information on oath is referred to as complaint on oath.

 
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