As the Gangmasters Licensing Authority (GLA) enters into a consultation between itself and the supermarkets on a protocol to fight exploitation of vulnerable workers, gangmasters are finding that margins are being squeezed, causing rogue gangmasters to cut corners.

Earlier this month, 1st Universal Services in Ilford had its licence revoked after a GLA investigation, supported by Marks & Spencer and Maple Leaf Bakery, found that the gangmaster was paying well below the GLA indicative rate — meaning that it was highly unlikely that any gangmaster being paid this rate was operating legally.

And Tony Watson, business development manager at Labour- Tech, says: “Suppliers are panicking, so they are just getting the work and putting the price down. These are companies that are supplying people to supermarkets such as Morrisons and Waitrose somewhere along the
line.”

The consultation, between the GLA and supermarkets including ASDA, Iceland, Marks & Spencer, Morrisons, Sainsbury’s, Tesco, the Co-operative and Waitrose, aims to establish common ground for how the GLA and the supermarkets can co-operate on exchanging information on workplace abuse and conduct joint visits in the supply chain.

ASDA said in a statement that the consultation is an excellent example of what can be accomplished when all relevant stakeholders pull together with one overall goal.

“As responsible members of society we have an obligation to support the remit of the GLA, and to do all that we can to protect and promote the rights of vulnerable workers,” the statement said.

A spokesman for fellow supermarket Sainsbury’s said that as a responsible retailer it requires its suppliers to comply with the Ethical Trading Initiative Base Code. This means that Sainsbury’s should look after all its workforce in an ethical manner as part of its terms and conditions, as complying with the GLA rules is UK law and not a retailer-driven issue.

A Waitrose spokesperson told Recruiter that it builds all its supplier relationships on honesty, fairness and mutual respect, and expects all of its suppliers to respect the rights and well-being of their employees, support their communities, protect the natural environment and promote high standards of animal welfare.

The spokesperson adds that the GLA has made excellent progress in addressing labour standards, and through the protocol Waitrose believes that the GLA and UK retailers can continue to work together to share experiences and reduce the number of illegal labour providers in the UK. “We are fully supportive of the formal consultation process — we have a strong history of working closely with our supply chain, and we believe that the process will allow the views of all to be taken into account.

“Alongside the development of the protocol and the consultation process, we have also been involved in the discussion of a Labour User Guide being produced, in conjunction with the GLA and other supermarkets.”

But as the supermarkets cut prices and consumers struggle to make ends meet due to the recession, Watson says that he hopes supermarkets will realise that every time they try and get a cheaper product that that money is coming out of someone’s pocket. “It is certainly not anyone making money, it is the end worker that is getting screwed and we see it all the time here. We have people coming in for work because they know we have a good reputation. I can’t compete price wise,” he admits.

“I have been trying to get involved with a company for two years now but as soon as I sat down with them, they told me they are paying £7.45 an hour. I didn’t want to say to them that you can’t pay that without someone down the line not going to have their National Insurance paid, their tax paid or paid holiday. That money has to come from somewhere.”

Competition has also intensified among gangmasters as bigger companies have been applying for licences, putting pressure on smaller firms, according to Bernard Gaughan, general manager at Total Labour Solutions. He told Recruiter there has been a proliferation of big companies expanding to undertake big contracts at minimal cost.

But whether times are tough or not, tighter margins should have no bearing on the practices of gangmasters, according to Marshall Evans, director at Staffline. “We view the GLA licence badge as way of demonstrating to our clients that we do things properly. It is a rigorous form of testing.”

Paul Whitehouse, chairman of the GLA, told Recruiter that gangmasters must obey the terms of their licence and that firms that complied with the law had nothing to worry about.

Whitehouse says that sharing intelligence to expose rogue gangmasters is a key goal of the protocol, as well as affording supermarket staff the opportunity to attend joint inspections to upskill up their staff so that faults are discovered.

And he has a sage warning for rogue gangmasters: “The only people that need to be worried about this are labour users who are not obeying the law. “If you are unlicensed, we will find you and make sure you are prosecuted.”

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