Gangmasters (Licensing) Act 2004
Encyclopedia
The Gangmasters Act 2004 (c 11) is an Act
of the Parliament of the United Kingdom
that regulates the agencies that place vulnerable workers in agricultural work, and the shellfish
collecting and packing industries (s.3). It is the most recent plank of UK agency worker law. It establishes the Gangmasters Licensing Authority
(s.1), which requires that all such agencies have a licence before they operate, and adhere to proper labour practice standards. Most of its provisions came into effect after 2005. The immediate cause of the legislation was the 2004 Morecambe Bay cockling disaster
, where 21 Chinese immigrant labourers were left to drown by their employers (the racketeers were subsequently convicted of manslaughter, and some deported back to China) off the coast of Lancashire as the tide swept in around them.
The Gangmasters Licensing Act was based on a voluntary project, the UK Temporary Labour Working Group http://www.ethicaltrade.org/in-action/projects/uk-temporary-labour-working-group, carried out by companies in conjunction with trade unions through the Ethical Trading Initiative
. The project provided a working model for how a licensing scheme could work, and also meant that ETI-member companies, including major UK supermarkets, lobbied for the new law.
. However, the Deregulation and Contracting Out Act 1994
, a wide-ranging measure designed to trim government, removed this requirement. The 2004 Act requires licences for any business involved in labour placement in the agricultural and shellfish sectors (s.7) and they are contingent on the rules that the Secretary of State lays down (s.8), found in the The Gangmasters (Licensing Conditions) (No.2) Rules 2006 SI 2006/2373.
To obtain a licence, the rules require payment of a fee linked to the agency's turnover (r.7) ranging between £250 and £4000 for businesses turning over under £1m to over £10m respectively. Agencies also have to pay for inspections of their work environment in order to obtain licensing approval (r.8). Based on turnover in the same way, the fees range from £1,600 to £2,500.
Charging fees to labourers directly is prohibited by Schedule r.4(10)(2) and by the Employment Agencies Act 1973
s.6. The rules make the end-user the only one allowed to pay the worker (r.6), restrict the agency's power to contract with the end-user to prevent the worker taking up permanent employment
(r.7), prohibit the practice of withholding pay from labourers as a sanction (r.8), require the agency to provide the end-user with a document containing the terms of the agreement on fees, and what to do if the worker is unsatisfactory (r.11); they also prevent gangmasters giving each other workers unless the worker has properly consented (r.16), and require keeping of records for each worker (r.19).
The agency must give the labourer information about his legal rights (r.15). The status of such rights is uncertain, but it would appear that under s.230 of the Employment Rights Act 1996
a worker will be considered the employee of the end-user. Certainly every worker must be paid the minimum wage, receive holiday pay, and must not be subject to discrimination.
Act of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...
of the Parliament of the United Kingdom
Parliament of the United Kingdom
The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...
that regulates the agencies that place vulnerable workers in agricultural work, and the shellfish
Shellfish
Shellfish is a culinary and fisheries term for exoskeleton-bearing aquatic invertebrates used as food, including various species of molluscs, crustaceans, and echinoderms. Although most kinds of shellfish are harvested from saltwater environments, some kinds are found only in freshwater...
collecting and packing industries (s.3). It is the most recent plank of UK agency worker law. It establishes the Gangmasters Licensing Authority
Gangmasters Licensing Authority
The Gangmasters Licensing Authority is an agency in the United Kingdom regulating the supply of workers to the agricultural, horticultural and shellfish industries...
(s.1), which requires that all such agencies have a licence before they operate, and adhere to proper labour practice standards. Most of its provisions came into effect after 2005. The immediate cause of the legislation was the 2004 Morecambe Bay cockling disaster
2004 Morecambe Bay cockling disaster
The Morecambe Bay cockling disaster occurred on the evening of 5 February 2004 at Morecambe Bay in North West England, when at least 21 cockle pickers were drowned by an incoming tide off the Lancashire/Cumbrian coast....
, where 21 Chinese immigrant labourers were left to drown by their employers (the racketeers were subsequently convicted of manslaughter, and some deported back to China) off the coast of Lancashire as the tide swept in around them.
The Gangmasters Licensing Act was based on a voluntary project, the UK Temporary Labour Working Group http://www.ethicaltrade.org/in-action/projects/uk-temporary-labour-working-group, carried out by companies in conjunction with trade unions through the Ethical Trading Initiative
Ethical Trading Initiative
The Ethical Trading Initiative is an alliance of companies, trade unions and voluntary organisations working in partnership to improve the working lives of people across the globe who make or grow consumer goods....
. The project provided a working model for how a licensing scheme could work, and also meant that ETI-member companies, including major UK supermarkets, lobbied for the new law.
Licensing
Before 1994, all such agencies were required to be registered under the Employment Agencies Act 1973Employment Agencies Act 1973
Employment Agencies Act 1973 is a United Kingdom Act of Parliament and part of a wider body of UK agency worker law. It regulates the conduct of employment agencies which recruit and manage temporary and permanent labour. It applies to approximately 17,000 employment agencies operating in the UK...
. However, the Deregulation and Contracting Out Act 1994
Deregulation and Contracting Out Act 1994
The Deregulation and Contracting Out Act 1994 is an Act of the Parliament of the United Kingdom. It introduced wide ranging measures aiming to cut government expenditure and bureaucracy...
, a wide-ranging measure designed to trim government, removed this requirement. The 2004 Act requires licences for any business involved in labour placement in the agricultural and shellfish sectors (s.7) and they are contingent on the rules that the Secretary of State lays down (s.8), found in the The Gangmasters (Licensing Conditions) (No.2) Rules 2006 SI 2006/2373.
To obtain a licence, the rules require payment of a fee linked to the agency's turnover (r.7) ranging between £250 and £4000 for businesses turning over under £1m to over £10m respectively. Agencies also have to pay for inspections of their work environment in order to obtain licensing approval (r.8). Based on turnover in the same way, the fees range from £1,600 to £2,500.
Charging fees to labourers directly is prohibited by Schedule r.4(10)(2) and by the Employment Agencies Act 1973
Employment Agencies Act 1973
Employment Agencies Act 1973 is a United Kingdom Act of Parliament and part of a wider body of UK agency worker law. It regulates the conduct of employment agencies which recruit and manage temporary and permanent labour. It applies to approximately 17,000 employment agencies operating in the UK...
s.6. The rules make the end-user the only one allowed to pay the worker (r.6), restrict the agency's power to contract with the end-user to prevent the worker taking up permanent employment
Permanent Employment
Permanent employees or regular employees work for a single employer and are paid directly by that employer. In addition to their wages, they often receive benefits like subsidized health care, paid vacations, holidays, sick time, or contributions to a retirement plan. Permanent employees are often...
(r.7), prohibit the practice of withholding pay from labourers as a sanction (r.8), require the agency to provide the end-user with a document containing the terms of the agreement on fees, and what to do if the worker is unsatisfactory (r.11); they also prevent gangmasters giving each other workers unless the worker has properly consented (r.16), and require keeping of records for each worker (r.19).
The agency must give the labourer information about his legal rights (r.15). The status of such rights is uncertain, but it would appear that under s.230 of the Employment Rights Act 1996
Employment Rights Act 1996
The Employment Rights Act 1996 is a United Kingdom Act of Parliament passed by the Conservative government to codify the existing law on individual rights in UK labour law. Previous statutes, dating from the Contracts of Employment Act 1963, included the Redundancy Payments Act 1965, the...
a worker will be considered the employee of the end-user. Certainly every worker must be paid the minimum wage, receive holiday pay, and must not be subject to discrimination.
Enforcement
The 2004 Act creates a number of offences with heavy penalties. Under s.12(4) offenders can face 10 years imprisonment for operating without a licence. Under s.13, people who deal with unlicensed gangmasters can face 51 weeks jail, unless they can show they took all reasonable steps to establish that the gangmasters were licensed.Section 29 - Commencement and transitional provision
The following orders have been made under this section:- The Gangmasters (Licensing) Act 2004 (Commencement No. 1) Order 2004 (S.I. 2004/2857 (C. 119))
- The Gangmasters (Licensing) Act 2004 (Commencement No. 2) Order 2005 (S.I. 2005/447 (C. 21))
- The Gangmasters (Licensing) Act 2004 (Commencement No. 3) Order 2006 (S.I. 2006/2406 (C. 85))
- The Gangmasters (Licensing) Act 2004 (Commencement No. 4) Order 2006 (S.I. 2006/2906 (C. 101))
- The Gangmasters (Licensing) Act 2004 (Commencement No. 5) Order 2007 (S.I. 2007/695 (C. 29))
See also
- UK agency worker law
- Agency Workers DirectiveAgency Workers DirectiveThe EU Temporary and Agency Workers Directive is an EU Directive agreed in November 2008 which seeks to guarantee those working through employment agencies equal pay and conditions with employees in the same business who do the same work...
- Employment Agencies Act 1973Employment Agencies Act 1973Employment Agencies Act 1973 is a United Kingdom Act of Parliament and part of a wider body of UK agency worker law. It regulates the conduct of employment agencies which recruit and manage temporary and permanent labour. It applies to approximately 17,000 employment agencies operating in the UK...
- Temporary and Agency Workers (Equal Treatment) BillTemporary and Agency Workers (Equal Treatment) BillThe Agency Workers Regulations 2010 are a statutory instrument forming part of UK labour law. They aim to combat discrimination of people who work for employment agencies, by stating that agency workers should be no less favourably treated in pay and working time than their full time counterparts,...