The recruitment industry is split over the government's decision to include all stages of food processing under the Gangmasters Licensing Scheme, set to affect agencies from next month.

The ministerial decision, revealed to Recruiter last week and set to be announced this week, means that all businesses which supply contract, temporary or permanent labour to work in agriculture, shellfish gathering and food packing and processing will need a licence.

It will also be an offence for a labour user to take workers from an unlicensed labour provider.

The Gangmasters Licensing Authority is expected to start issuing licences on 6 April, with the offence of operating without one set to come into force on 1 October.

The Recruitment and Employment Confederation (REC) is disappointed by the decision.

Belinda Brooke, head of legal policy at the REC, believes there is little evidence of illegal practice in the second stage of food processing, which includes for example, crisp, cake or biscuit manufacture.

“From a practical point of view, this legislation is the best way to go because there are a lot of food plants where both the initial processing of raw food and the second-stage processing takes place,” she said.

“But there's not the evidence that gangmaster activity in second-stage processing is taking place to justify the regulations.”

Brooke added that the government may be forced into widening the scope of the Act.

“There is a lot of evidence that 'gangmaster' activity goes on in the hospitality, catering and construction sectors,” she said. “Will we need these to come under the Act?”

However, the Association of Labour Providers (ALP), which includes more than 100 recruiters in the agricultural, food packaging and processing industries, has welcomed the decision.

“The government has taken far too long to settle the scope of the legislation but we are pleased with the decision it has now taken,” said ALP chairman Mark Boleat.

“The ALP has joined other industry leaders to argue for the maximum possible coverage of the Act, on the grounds that any dividing lines would be arbitrary and would cause distortions.

“However, far too many employment agencies and businesses still do not seem to understand that they come within the Act and will require a gangmaster licence if they wish to continue supplying the food industry.”