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The noble Lord said that he envisaged the possibility that the courts would order the Government to purchase credits. That scenario is even more improbable than one in which they make a judgment about the legality or otherwise of the Government’s actions. But much more interesting was the noble Lord’s initial comment that he shared the reservations expressed by his noble friend Lady Young of Old Scone about my amendment. She welcomed the amendment but said that it was basically not adequate. She wanted to go further and have a tougher mechanism. Indeed, she referred to the very mechanism which I had just mentioned—that proposed by her colleague Mr Clive Bates to the Joint Committee. That mechanism would have required the

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Government to purchase credits and then to create a fund for domestic mitigation to reduce emissions in the domestic economy, and thus bring us back down to the domestic threshold. I thought it was a little unkind of her to chastise me for not having produced an amendment on those lines. I would have done so if I had had a suitable draft. Indeed, I asked in the committee for the Environment Agency to work up its ideas and bring forward a suitable amendment, and to include in its analysis what the consequences of the Government acting in this way would be for UK industry and for the performance of individual organisations and so on within the economy. I did not think that I had the skill to draft that amendment myself.

The Minister said that he did not think that my amendment was adequate and that the Government would consider whether they could come up with a tougher and more effective provision. They would be capable of drafting something along the lines proposed by the noble Baroness, Lady Young of Old Scone, so I look forward to their production of a tougher compliance mechanism. However, the more I listened to the noble Lord, the more confident I became that we must insist on including a compliance mechanism in the Bill. I shall certainly try to ensure that an even tougher set of ideas are included in any amendments that I propose at Report. For the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 27 and 28 not moved.]

Lord Rooker: I beg to move that the House do now resume. In doing so perhaps I may suggest that the Committee stage do not begin again before 8.44 pm.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2007

7.45 pm

Lord Bach rose to move, That the draft regulations laid before the House on 28 November be approved.

The noble Lord said: My Lords, these amendment regulations make some modest amendments to the Conduct of Employment Agencies and Employment Businesses Regulations 2003. The regulations govern the conduct of the private recruitment industry in Britain. This industry has grown in recent years and agency work plays a key role in our flexible labour market. The great majority of employment agencies are reputable businesses that comply with the regulations and treat their workers fairly. While the conduct regulations provide a satisfactory basic framework that balances the interests of agency workers, agencies and hiring businesses, we need to take account of those agency workers who may be more at risk of being denied their rights and less able to protect themselves.

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The Government’s labour market strategy paper, Success at Work, published in March last year, identified a number of areas of abuse affecting vulnerable agency workers that we wanted to tackle. We have now consulted on these proposals and taken account of the many helpful responses to that consultation. The amendment regulations set out a series of practical measures to address abuses affecting vulnerable agency workers without adding to the burdens of legitimate agencies that would never mistreat their workers in this way. In fact, the amendment regulations also include a deregulatory measure that reduces the burdens on agencies that supply workers on very short-term assignments. In addition, by taking action to outlaw some bad practices carried out by disreputable agencies, we will benefit the law-abiding agencies which suffer from unfair competition from those who cut corners at the expense of vulnerable workers.

I should emphasise at this point that it would be quite wrong to suggest that all agency workers are vulnerable. Most agency workers are neither vulnerable nor exploited. Similarly, some employees on permanent contracts are undoubtedly vulnerable and subject to treatment that all in this House would condemn. The amendment regulations are therefore practical measures to address some key abuses affecting vulnerable workers.

We are proposing three main changes to the Conduct of Employment Agencies and Employment Businesses Regulations 2003. The first of these will give agency workers a clear right to withdraw from accommodation, transport or other services provided by their agency without suffering any detriment. It is important that if an agency worker is using such services, they can choose to do so on the basis of their own free will. While a lot of the services that agencies provide are of benefit to their workers, I am aware of others that are not. These include instances of accommodation that consists of a space in a shared room in an overcrowded house at an exorbitant rent or transport that costs far more than could be obtained in the open market. These abuses tend to affect migrant workers, but can also apply to indigenous agency workers. While it is already an offence to make an offer of work conditional on an agency worker paying for other services such as transport or accommodation, we are now proposing to strengthen this provision by giving agency workers a right of withdrawal subject to a period of notice without suffering any detriment. In that way, agency workers will not be tied to services that do not represent value for money.

These extra rights will be backed by additional resources for enforcement. It has been suggested to the Government that not enough inspectors are working for the Employment Agency Standards Inspectorate and that their numbers should be increased, and the Government have responded to these representations. In September, the Secretary of State announced plans to double the number of inspectors. In addition, the inspectorate will be given stronger investigative powers through the forthcoming Employment Bill to enable it to identify the scale of any non-compliance, and the potential penalty for breaking the law with regard to agency workers will be raised to an unlimited fine.

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The second major change will affect the taking of fees from would-be entertainers and models for including their details in publications such as casting websites and model books. Such publications are used by entertainers and models to help them obtain work. There are too many instances of unscrupulous individuals advertising for would-be actors or models to attend casting sessions and then engaging in hard-sell tactics to persuade them to pay high fees for the provision of services and the promise of work. Those wishing to enter the worlds of modelling and entertainment are often young and often inexperienced. They are vulnerable to being exploited by unscrupulous people who persuade them that they have a great future if they sign up. They are assured there will be plenty of opportunities for them to get paid work in the industry, sometimes on the basis of exaggerated claims such as the agency’s connections with popular TV shows. On the strength of these claims, unsuspecting individuals are induced to pay relatively high fees, often more than £150, to include their details in the agency’s publication or website.

This practice takes advantage of people vulnerable by virtue of their inexperience. In practice, of course, the modelling and entertainment industries are very difficult fields to get into, where even talented professionals can find it hard to get work. The amendment regulations therefore increase protection for workers by introducing a seven-day cooling-off period for contracts for placing a worker’s details in a publication or a website. To make this protection effective, any agency which takes a fee during the cooling-off period will be committing a criminal offence. The cooling-off period will apply to all contracts for placing an individual’s detail into a publication or website, whether the individual was responding to an advertisement for a casting session or approached the agency direct. The Government’s intention is to make the practice of enticing people to these kinds of casting sessions a lot less attractive. Reputable agencies do not need to use such underhand tactics and therefore will not be affected by this change. They should benefit from measures to stop such bad practices.

We are aware, of course, that there have been calls for all such fees to be banned. We have looked carefully at the responses to the consultation on these proposals and have concluded that a complete ban would have adverse impacts on reputable publications which actors and models use to find work. Such publications are valued by those in the profession and we do not want to risk such publications becoming uneconomic.

The last significant change in these amendment regulations will benefit agencies by reducing administrative burdens. Where agencies supply workers for short-term assignments of five working days or less, they will no longer have to provide written information provided that they have obtained all the required information from the worker and provided that the worker has already received information about the hirer and that information has not changed. This change should save agencies an estimated £6 million per year. It will particularly benefit agencies in the catering and hospitality sector or agencies which supply interpreters and supply teachers, where assignments are typically very short.

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This deregulatory change will not reduce the level of protection to workers as the reduced, lighter information requirements for these short-term assignments will only be available where the agency has already provided the essential information in their terms and conditions.

The measures we are introducing in these amendment regulations are practical measures to address key abuses affecting vulnerable agency workers while also reducing the burdens on the great majority of legitimate agencies. I beg to move.

Moved, That the draft regulations laid before the House on 28 November be approved. 3rdReport from the Statutory Instruments Committee.—(Lord Bach.)

Baroness Wilcox: My Lords, most of these regulations merit our support, except regulation 7 which seeks to tackle a persistent defrauding of aspiring actors and models by bogus recruitment agencies. As the Minister said, very often these are young hopefuls who are being ripped off by as much as £100 or £200 a time. It is a practice which preys on people’s hopes and dreams and it is legal because of a loophole in the 2003 conduct regulations which we are trying to amend.

The question is whether the proposal before us will do what the Government originally promised—to stamp out the practice in question. Regulation 7 would amend the original regulation by providing a seven-day cooling-off period for payment after a casting session and would entitle a work seeker to back out of any contract signed without penalty. We have been presented with a well-intentioned and, on the surface, reasonable suggestion that the provisions will improve things. However, they will not prevent the scam from occurring in the first place or address the central problem that it is often weeks, sometimes months, after the original event that people realise that no work is forthcoming.

The reactions to the Government’s propositions have been quite negative. The first negative reaction was from the Equity spokesman who said that he was absolutely livid with what was happening. Mr Spencer MacDonald, the principal representative of the Broadcasting Entertainment Cinematograph and Theatre Union, said:

Why have the Government chosen to ignore the views of Equity and BECTU on the issue? Does the Minister agree that instead of a short cooling-off period there should be a ban on up-front fees in this sector, as there is in almost any other business sector? Why have the Government turned their face against this?

Further, will the Minister explain why the Government have rejected the eminently sensible suggestion of Equity and BECTU that a distinction should be made between directories and online information services on the one hand and genuine entertainment employment agents on the other? Such a distinction would allow agents to develop the continuing relationship with artists that they need and to charge the fee in relation to work sought, not up front. The publication side would then

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be clearly distinguished from the genuine process of agency. This is important. The Minister in the other place spoke about not setting up blanket bans but he had the opportunity to distinguish between the two functions. Equity and BECTU suggested that and I suggest it now.

The rules of the House require that if we want to oppose the relevant provision in the statutory instrument, we must vote against the whole measure. We do not want to do that because the other regulations merit our support. However, I emphasise that regulation 7 is wholly inadequate. We do not want to support it and it is a great shame that Ministers have chosen to bury the proposal in such a way. As Mark Prisk, my colleague in another place, said:

I hope that the Minister can explain why he and his colleagues are happy for this con to continue. I do not believe that this is his wish but it is the net effect of what we are being presented with today.

Lord Razzall: My Lords, I share the views of the noble Baroness, Lady Wilcox. These regulations are almost entirely, with one exception, to be supported, and the points she raises on regulation 7 are particularly well made. It is not clear from the Explanatory Memorandum why the Government have gone back on their original intention. It is indicated that this is as a result of consultation, but certainly the consultation with industry leaders to which the noble Baroness referred would indicate that her points are well made.

As she rightly pointed out, one of the weaknesses of the procedure under which we are called in the dinner hour, or in the Moses Room, to debate these regulations is that we only have the opportunity to either accept them or to vote the whole lot down; there is no provision to amend them. On an issue such as this, that makes opposition and reasonable debate more difficult.

I repeat my congratulations to the Government and to the noble Lord, Lord Bach, over recent regulations and what now appears to be regular procedure. Whether or not that extends beyond his department to all departments, his department is to be congratulated on the regulatory impact assessment, as now appears with all regulations emanating from his department. I found it considerably more informative and helpful than the Explanatory Memorandum that used to accompany statutory instruments.

Again, for the record, I press the Minister in general terms on a point that is dear to our hearts on the Liberal Democrat Benches, and appeared in our last two general election manifestos: the necessity for sunset clauses in regulations. In another context, I notice, the noble Baroness, Lady Wilcox, has put down an amendment providing for a sunset clause, which we will be supporting. The Minister’s department almost

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gets there when saying—somewhere in here—that the regulations will be reviewed in two years’ time, in about 2010, to assess the benefit. That is almost a sunset clause, but does not quite have the full effect. One of the reasons that we are in favour of sunset clauses is to try and alter the culture of government, where regulation is piled on regulation.

I also ask the Minister—although he may feel this is an inappropriate moment—if, in commenting on the regulations, he is prepared to comment on the wider issues regarding agency workers that appear to be emanating from decisions or potential decisions in Europe. He will be well aware that there is a wider context. A number of people and lobby organisations in the United Kingdom are unhappy about the relationship between what an agency worker is and what an employee is—what is the definition of an agency worker? Is he in a position to comment? Also, what about the apparent dispute between his Government and their paymasters in the trade unions on the treatment of agency workers, in general terms, flowing from potential European directives?

Lord James of Blackheath: My Lords, I agree with the words of the noble Baroness, Lady Wilcox, and of the noble Lord, Lord Razzall, but I disagree with their thinking that the regulations are wrong only in respect of regulation 7. The instrument is deficient in what it does not say, rather than in what it does say. I raised my points at the Merits Committee last week. The Merits Committee would probably have asked for the instrument to be returned to the department for further consideration had it not been for the imminence of the Recess and the desire not to interfere with process. There are three major concerns for me in the instrument. One is an important point that is not there and appears to be in total conflict with the law as it stands—on the admission of the department. The other two points are serious moral hazard issues relating to young people.

The issue that is not there, which is strangely and apparently in conflict with the law, is that regulations do nothing to address the one area in which fees are charged by agencies directly to jobseekers. They have been charged on that basis for a great many years. The issue is that of out-placement agencies, where the recently redundant or people without jobs at the management and executive levels go to agencies that purport to obtain for them introductions to employers who will provide employment opportunity. The agency in that case generally takes a fee both from the employer who takes them on, if successful, and from the jobseeker, on a regular basis. Some of those fees are enormous. I have heard of job fees from out-placement operations exceeding £2,000 per month, rapidly exceeding the amount of redundancy upon which the redundant executive depended for the survival of himself and his family during the time that it will take him to get a job. That is a tragic situation. There appears to be no regulation and I seriously hope that with the Employment Bill, forthcoming after the Recess, we will see some attempt to bring those agencies under some regulatory control. That is very important.

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There is an issue where the principle of out-placement can work brilliantly—if it is worked as an integral part of a redundancy package, paid for by the employer that has declared the redundancy. In that case, there needs to be clarification about the taxable status of the fee paid on behalf of the executive—as to whether it is a benefit to be taxed or not. That is not clear, in practice, in standardisation. There is another case, where an employer has a large number of redundancies to declare—I myself have had cases of 2,000 and of 500 people at a time—and you mount your own out-placement operation inside. Some of the agencies are extremely good at coming into a firm and setting up an out-placement operation on your behalf. We did it at the Dome with wonderful effect. We had 2,000 young people, all being declared redundant on 31 December of the year of the Dome, and none of them had jobs to go to. We brought in a brilliant young woman, who set up an out-placement operation for us, for a very small fee. We got 1,620 job offers for the 2,000 people by the time that they left the Dome. That is an example that should be encouraged.

We do not want the Government to write off the whole of the out-placement industry, but, please, to put some regulations in place that allow the benefits to continue and that rule completely out of order the scoundrels who are bankrupting the redundant unfortunates. I am told that it is already illegal under the Employment Act 1978 to run an out-placement operation on that basis, so why are they not being prosecuted accordingly? There is a real mystery there.

My two questions of moral concern relate to the provision, which is recognised in the instrument, whereby an agency can take a fee for doing a block booking of a large number of agency staff to go and work, perhaps, at a sporting event—usually catering or waitress and serving staff for the hospitality and restaurants. Until recently, I have been responsible for running both the Grand National and the Cheltenham race course meetings, so I am intimately familiar with this process. In both those places, you would have hundreds of young women being bussed in from all over the country to provide the waiting staff, usually drawn from the catering colleges where they recruit whole classes. They are provided with accommodation at the locations to which they are taken. My concern with the instrument is that it now appears, according to the Explanatory Memorandum, not to allow you to terminate your short-term employment in less than five days. A lot of people, who are very inexperienced, at the ages of 15 or 16 have to have their parents’ consent to go, but I very much doubt whether the parents know what they are letting them go to. These affairs are not attractive places for young people. The accommodation is very primitive and, while there are hundreds of young women together in such places, there are also hundreds of young men—staff handling the horses or all the others handling a race meeting. There is easy access to alcohol and, I fear, easy access to drugs as well. The risk to those young people of being exposed to predatory and rather intoxicated young men is really unattractive indeed.

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