To be a gangmaster

8-Mar-2006

Thousands of recruiters face the dubious privilege of being known as a 'gangmaster' after the government's decision to regulate the food packaging and processing industry.

As revealed in our 8 March issue, labour providers to the agriculture, horticulture, food packaging and food processing industries must now obtain a licence from the Gangmasters Licensing Authority (GLA) to operate after 1 October.

The government has decided to draw the line at food retailers, distributors and wholesalers, meaning that recruiters supplying staff to a sandwich bar, for example, won't need a licence.

But the stigma of the gangmaster name could yet cause wide-ranging problems for the recruitment industry. The name came about from the Private Members' Bill submitted to Parliament by MP Jim Sheridan following the deaths of 21 cockle-pickers in Morecambe Bay in 2004, and retains sinister connotations.

Recruiters can apply for a licence from 6 April, but many may not see themselves as 'gangmasters', or may wish to in future.

Mark Boleat, chair of the Association of Labour Providers (ALP), which includes more than 100 recruiters in the agricultural, food packaging and food processing industries, sees problems ahead.

“The scope of the legislation is widely misunderstood, mainly because of the title of the Act,” he said. “The Act does not apply to gangmasters as such. There are many gangmasters that will be outside the scope of the Act, for example those in construction and catering.”

Mike Wilson, chief executive of the GLA, admits that the recruitment industry may be misled by the name. “A lot of labour providers will not recognise themselves as gangmasters. We have a big public relations exercise to deal with,” he said.

Recruiters will also have to undertake a major PR exercise with their clients, as from 1 December, it will be an offence to take labour from an unlicensed labour provider.

From the autumn, the maximum penalty a recruiter could face for operating without a gangmaster's licence is 10 years in prison and a £5,000 fine. A client using workers from an unlicensed gangmaster could face 51 weeks in prison and a £5,000 fine.

Recruiters are divided over the licence. Andy Hogarth, managing director at blue-collar recruiter Staffline Employment, said: “In the long-term, these licensing conditions will do our business good because agencies like ours cannot compete with the operators who ignore current laws on minimum wage, employing illegal workers and health and safety requirements.”

However, Marcia Roberts, deputy chief executive of the Recruitment and Employment Confederation, warns that reputable agencies will have to pay for the actions undertaken by their illegal counterparts.

“Those who supply across all sectors will have to decide whether the cost of the licence is too prohibitive to continue,” she said.

Large recruiters will certainly face a hefty bill for the licence, with the fee calculated on turnover. Firms with a turnover of more than £10m will have to stump up £4,000.

Smaller recruiters won't be hit as hard. Agencies with a turnover of less than £1m will pay just £250.

A Code of Practice detailing minimum standards for labour providers has been drawn up by the Temporary Labour Working Group (TLWG), a consortium of retailers, food producers, growers, suppliers and trade unions.

Labour providers that have had an audit from the group will qualify for a £250 discount provided they apply for a licence by 31 May.

Therefore labour providers with a turnover under £1m, and who have had the TLWG audit, will obtain a licence for nothing.

However, those labour providers that haven't had a TLWG audit will need to undergo a GLA inspection, which could cost up to £2,500.

Angel Human Resources is a recruiter facing the £4,000 bill, and managing director Russell Crawford is unhappy with the extra piece of legislation for this industry.

“Everyone associates 'gangmasters' with the cockle pickers,” he said. “This legislation was set up to deal with that scale of worker supply, which is a world away from accredited and reputable agencies.

I think this is all very unnecessary.”

The government believes the new licence will protect about 600,000 workers from exploitation by rogue employers - but ironically, the regulations for shellfish gathering, which started the whole debate, are on hold for six months.

Like it or not, recruiters will have look at how they view themselves, and decide whether it's worth the financial risk and education exercise needed for clients to be associated with the term 'gangmaster'.