The responsibility of gangmaster licensing has finally extended to reach the shoulders of fruit and vegetable suppliers. New legislation coming into force dictates that, from December 1, it will be a criminal offence to use an unlicensed gangmaster.
Failing to do this and employing the services of unlicensed labour providers after this date will become an offence punishable by up to 51 weeks imprisonment or a £5,000 fine, or both.
The impact that gangmaster licensing will have on the fresh produce industry has been subject to hot debate in recent months. And while most agree that action was sorely needed to greater protect the interests of workers in the sector, whether the act fairly answers the needs of all affected parties has been a bone of contention.
With the December 1 requirement now upon the industry, concerns have been raised as to whether suppliers are aware of their newfound responsibilities.
Paul Whitehouse, chairman of the Gangmaster Licensing Authority (GLA) is confident the fresh produce industry is prepared for what is expected of it is confident that the act in its entirety will bring welcome changes to the industry. “We believe that the vast majority of suppliers are aware of the new offence and, as their responsibilities are relatively simple, we believe they should be prepared,” he says. “All they have to do is check their provider is licensed on the GLA website or by phone, or to additionally protect themselves they can register an interest in the provider and we will inform them of any changes or if there is a problem. Regulation will improve the image of the industry, with the licence being a mark of approval, especially as we will ensure that standards do not drop even for those with a licence. By doing this we are providing the suppliers with a simple list of labour providers they can use who they know are meeting all legal requirements, which in turn will provide reassurance for their own customers.”
And as well as efforts by the GLA to promote information on the new regulations, the industry is lending a hand in spreading the word. Some of the industry’s top names, including many multiple retailers, have been working to make their suppliers aware of their responsibility. Supermarkets too are supporting the Act’s implementation and directing their suppliers to ensure their labour providers are licensed.
However, Mark Boleat from the Association of Labour Providers (ALP) has some concerns about the message’s reach. “All labour users have to do is make sure they are dealing with authorised providers - it’s not very onerous on them. However, I would be amazed if more than a small proportion of labour users understand this as no one’s told them. Big companies, such as food packers will be aware of the requirement, small ones might not be,” he says.
“Food businesses such as small farms that employ workers for two months of the year have heard nothing about the Act. They may go to the Yellow Pages to get their labour and they are supposed to know they are committing an offence.”
Boleat is also concerned about how effectively the Act is being enforced. He suggests that the likelihood of these kinds of cases actually resulting in prosecution are slim. “If they get caught they will only be prosecuted if the provider they are using is not licensed and they are complicit in this,” he says.
Defra has issued guidelines on how the industry ought to go about employing authorised labour providers called ‘reasonable steps’ (see page 16). They include checking the GLA register and keeping records of all communications with your labour provider. While none of these steps are obligatory, they are a useful defence in if the user is taken to court.
“Although the effort required to make the checks are minimal, it is an essential part of stopping the rogue providers,” says Whitehouse. “If users are willing to hire the rogues there will always be somebody willing to supply, but from December 1 we can stop this and create a level playing field for all concerned.”
But whether a level playing field is entirely achievable is debatable. Boleat says that members of the ALP are suspicious that there are still a large number of unlicensed providers, such as field gangs and gangmasters in eastern Europe, operating outside of the law.
But those labour users that are aware of the December 1 requirement, and are not willing to hire “rogues” may find themselves facing a shortage of employees, according to some industry experts.
While the GLA says that since legislation was introduced requiring labour providers to be licensed, there has been no impact on the supply of staff to the fresh produce industry, others beg to differ. The amount of labour providers that have applied for licensing is short of the mark, according to Terry Waite from Vital Recruitment. “The only thing suppliers do not appreciate is how few providers have a licence,” he says. “If they find out their current provider is not licensed they may find that it is not easy to find another especially in what will be the busiest time of the year. I have heard there were up to 4,000 providers before licensing operating in the UK. If you consider that only 641 had licences in October, then you can only assume that there will be a lot of suppliers looking for new providers.”
Problems may arise too for smaller firms in isolated areas of the UK where no operators have applied for a licence, it has been suggested. But the GLA refutes this. “We have had no suggestions so far that there has been a shortage of labour in the industry and licensing will never directly affect the amount of workers who are legally allowed to work in the country,” says Whitehouse. “Where the GLA will make a difference and will force some labour users to look at their labour supply, will be the number of providers who can supply these workers,” he says.
Another area where trouble is foreseen is cost, however, the general consensus is that costs for labour users will be minimal. Where they may find cost increments is switching from providers that are not trading ethically to ones which may charge more, Waite says. “Any extra cost all depends on the provider the supplier was using before the introduction of the licence. Vital did not need to increase our charges to our customers as we did not need to introduce too many changes to meet the GLA criteria. If a supplier was using a provider that was not trading ethically they would have been getting a cheap price, if they then changed over they will find that they would be paying more.”
A key concern raised in anticipation of the new laws has been the monitoring of labour provision from outside the UK. A lot of the exploitation of labour actually occurs in the foreign country before workers come to the UK. However, the Act itself does actually extend to foreign suppliers. Where the GLA is coming into trouble is the enforcement, according to Whitehouse: “The Act already covers everyone who ‘supplies’ workers to the regulated sector. This includes foreign providers and those who assist in recruitment who often call themselves agents. The issues the GLA have in this area are purely practical - we would have concerns about taking enforcement action without the support of the host government, but we are making progress in this area and are currently in discussions to resolve these issues. Meanwhile, all labour providers, wherever they are based, have to be licensed and all labour users should bear this in mind.”
Measuring the Act’s success so early on in its implementation is difficult, but many are already finding fault. The level playing field described by the GLA will not be achieved as the act stands, Boleat says. “It needs to benefit labour providers by removing those who are operating unlawfully and those that are undercutting other labour providers by not paying tax. And we’ve no evidence that that is happening. My members are still facing competition from those who are not paying tax, so there has been no benefit to labour providers yet. I hope there will be in the future.
“What we want to see is proper action taken against labour providers cutting corners on things like tax and making it hard for the good labour providers to get business.”
Another concern raised by the industry is the scope of the Act. “It is illogical because it covers such a narrow sector,” he says. “This covers the provision by labour providers of labour to the food and agricultural industries, not direct employment by farmers themselves.
“There are also many other sectors [it needs to cover], such as construction, office cleaning and the hospitality industry. The Act is badly constructed in that respect.”
Waite thinks the Act should include the cost of rates charged by labour providers, in order to highlight malpractice. “If you follow the rules under the legislation there is a set amount of cost and work that you must do, irrelevant of how big or small your business is. For example you start with the minimum wage £5.35, add national insurance, tax, holiday pay, sick pay, transport, overhead etc and you will get to a minimum figure that you need to charge for your service before profit - the ALP has quoted a figure of £6.96 before adding profit.
“If licensed providers quote less than this, it should raiseeyebrows at the GLAand be lookedinto. At the moment the Act does not cover what providers charge and I think it would be good if it did.”
However, unlike some critics, he thinks the idea of giving responsibility to the labour to ensure they use an authorised provider can only help the GLA more successfully reinforce its laws.
“Suppliers must be committed to the Act for it to work. If providers can still get work without a licence it makes a mockery of the whole system, the fact that suppliers are included gives the Act some teeth, if they have no responsibility under the Act they can simply be unaware of the new legislation.”
Whitehouse is positive about the new requirement and the progress of the Act itself. However, he says that its widespread success depends on the co-operation of every party involved. “It is a very difficult task to stamp out all exploitation although that is what the staff of the GLA would like to do. The GLA may have to be content with massively reducing the risk of future exploitation,” he says.
“Where there are vulnerable workers there is always likely to be somebody who sees this as an opportunity. The GLA will find most of them, but sometimes we need information from the workers or the industry to let us know where to look for the others.
“We are an intelligence-led organisation, the more information we have the more effective we can be in targeting those who exploit the workers and it is in the industries’ interest that we work together to end this abuse. You should expect to see some action shortly.”
EVERY STEP YOU TAKE
As outlined in Defra’s ‘reasonable steps’ guidance, no more than 10 working days before an agreement with a labour provider is entered into you should:
• Check the GLA register to see whether the business is licensed (www.gla.gov.uk).
• Note the names or job descriptions of the authorised persons or postholders and keep a copy of the register entry.
• Use the telephone number and/or address given in the register to make initial contact with a labour provider.
• Where a labour provider business has a number of branches, use the telephone number of your local branch given in the telephone directory. Keep a copy of the telephone number, address and source.
• If during the agreement you doubt the identity of the business you are dealing with, contact the named principal authority using the telephone and address details shown on the register and tell the GLA of your concerns.
• If you still have reason to doubt the identity of the business you are dealing with, you should withdraw from the agreement with the labour provider and inform the GLA.
• You can keep either a printed copy or an electronic copy of the document or record concerned, but all records should be retained for a minimum of one year, or until the contract ends.
• Where a labour provider initiates the contact, do not take their assurance that they are licensed at face value - check the GLA register, and contact the labour provider using the details shown on the register. Keep a record of all checks made.
• When dealing with contractual matters, only deal with an authorised person or postholder and be able to demonstrate that you have done so.
• If you have an arrangement with a labour provider that continues for more than three months, check the GLA register at three-monthly intervals and keep a copy.
• From December 1 you can use the GLA’s Active Check Service to register an interest in a specific labour provider. You should keep a copy of your registration.
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