Gangmasters have hit out at supermarkets and packhouses for what labour providers described as “condoning” illegal working.
Mark Boleat, chairman of the Association of Labour Providers, said the rates some packhouses are paying encouraged illegal activity. He said the rates are too low to allow all legal requirements to be met.
“Labour providers are being squeezed at both ends of their business. Packhouses and, through them, supermarkets are requiring labour providers to comply with all legal requirements,” said Boleat.
“At the same time, some are refusing to pay a rate which allows this to be done. With the new minimum wage at £4.85, any packhouse paying less than £6.30, or farmer paying less than £7.02, an hour for labour is knowingly condoning illegal working.”
He said the figures were based on calculations in the regulatory impact assessment for the Gangmasters (Licensing) Bill, prepared by Defra.
The analysis estimates non-wage costs of supplying legally compliant labour add around 30 per cent to the minimum wage.
Boleat added: “This is without any allowance for management costs or profits which add a further 10 per cent.
“There is, rightly, pressure on labour providers to act within the law. The association has been working with other partners to introduce a code of practice which will mark a huge improvement in this respect.
“This will be of little value if the rates paid to labour providers make it impossible for them to act legally. Labour users must recognise the minimum wage has gone up and they have an obligation to ensure that they are not out-sourcing and condoning illegality in an effort to drive down costs.”
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