Help for vulnerable workers and
174. We heard that a major problem for many disadvantaged
workers was not necessarily a lack of employment rights, but exploitation
by the minority of bad employers that flouted labour law and denied
people their legal entitlements. As the DTI stated in its comments
to the Commission on the Green Paper (pp 85-96): "
it cannot be assumed that any category of workers is vulnerable
by definition; a whole range of factors have a bearing on whether
or not a worker is vulnerable. The root cause of vulnerability
is very often lack of skills. Basic skills (including language
skills) are more important than ever for entering the labour market".
Individual workers may also become vulnerable for other reasons.
For example, people who have suffered from a mental health problem
may experience discrimination in the labour market as a result
175. Among the people who may be exploited are
migrant workers, from elsewhere in the EU, who have entered the
UK legally in search of work. A separate issue is the situation
of workers, from outside the EU, who are working illegally in
the UK. We noted with interest the adoption on 16 May 2007 by
the European Commission of two Communications,
which, inter alia, would require that employers must check, before
recruiting an employee from outside the EU, that he or she has
a valid residence qualification. Employers who fail to do this,
and employ such a person who is illegally staying in the country,
would be liable to fines and other sanctions.
176. The Home Office also launched its Illegal
Working Action Plan on 16 May 2007 which will be coordinated through
the new Border and Immigration Agency (BIA). Key measures in the
plan include a new pilot project to help employers check migrants'
identity and right to work, implementation of civil penalties
for employers who employ illegal immigrants as a result of negligent
recruitment, and a new criminal offence for knowingly employing
illegal workers. This is subject to a consultation which
ends on 7 August 2007.
The Government will also be carrying out a national media and
direct mail campaign on illegal working, reminding employers of
their responsibilities. The measures are expected to come into
force early 2008.
177. Migrant workers unsure of their entitlements
and misinformed by employers were often those most at risk of
being exploited. With net migration into the UK from the EU currently
at a record highboosted in large part by the roughly 600,000
central and eastern European migrants that have come here to work
at one time or other since EU enlargement in 2004the issues
this raised have gained greater prominence. Indeed during the
course of our Inquiry the BBC broadcast
an exposé of appalling treatment of Lithuanian immigrants
to the UK which, the TUC told us, was a far from isolated example.
178. Hannah Reed of the TUC told us "Many
migrant workers are facing exploitation, being housed in very
cramped conditions, having very substantial deductions being taken
from their pay packet, which is often in breach not only of the
regulations but also of minimum wage laws." (Q 128)
179. Pressed on whether this reflected a deficiency
in enforcement procedures rather than in the law itself, Ms Reed
argued that there were genuine gaps in the law but also a lack
of enforcement. Although the TUC welcomed the recent establishment
of the Gangmasters Licensing Authority this only operates in agriculture,
whereas gangmasters, some illegal, were spreading to other parts
of the economy.
180. For the Government's part Mr Fitzpatrick
told us that the DTI would soon be completing a consultation on
possible measures designed to assist vulnerable agency workers
and was funding two pilot exercises to support vulnerable workers
and help their employers to comply with employment rights legislation.
There was also to be a 50% increase in resources for teams of
inspectors enforcing the national minimum wage.
181. Mr Fitzpatrick said it was essential,
however, that the Government acted in a precise way to come down
hard on rogue employers rather than impose unnecessary additional
regulatory burdens on decent employers: "We want to focus
on those who are not playing by the rules because they are not
only cheating vulnerable workers but they are undercutting decent
companies and preventing them from operating at a better profit
level because they are doing the right thing. This is a business
protection measure as well as protecting vulnerable people."
182. In similar vein, the DTI's written evidence
argued that an overly regulated labour market might itself result
in more people entering the informal/illegal economy and working
without enjoying any employment rights. In the terms of the Green
Paper this represented another example of how efforts to improve
labour market flexibility could reinforce genuine employment security
and enhance working conditions. Aside from this the best way for
the EU to combat undeclared work, said the DTI, is to co-operate
on detecting cases where this was evident and to share best practice
on enforcement methods. (pp 85-96)
183. On May 16 2007, after we had heard evidence
from the Minister, the Government launched a consultation document
with the aim of creating better enforced and more effective penalties
for employers' non-compliance with National Minimum Wage legislation
and the Employment Agencies Act. While any measures that result
from this consultation will clearly have general application,
they should, in particular, help to address the problems of illegal
exploitation faced by vulnerable groups.
184. We have noted the high rate of transitions
between different forms of employment and contractual status within
the UK labour market. We conclude that whatever market segmentation
does exist is explained primarily by social disadvantage, caused
by lack of basic skills and qualifications, rather than by barriers
created by labour law.
185. In the UK context, therefore, we recommend
that measures to improve employability, rather than modernisation
of labour law, should be the main priority of government policy
toward the labour market.
186. We are greatly concerned by evidence
of the exploitation in the UK of vulnerable groups, especially
migrant workers. We conclude, however, that the appropriate course
is to tackle abuse where it occurs and to provide vulnerable and
migrant workers with information about their existing legal entitlements.
187. We welcome the action taken by the Government
during our Inquiry to consult on the introduction of measures
which would help to strengthen the employment protection in the
UK of vulnerable groups of workers by creating better enforced
and more effective penalties for employers' non-compliance with
National Minimum Wage legislation and the Employment Agencies
Act. We will take a close interest in the outcome of this consultation
and in the effectiveness of any new measures which result from