Agency Labour

Issues

Why tackle the issue of agency labour?

Agency labour is vital for most businesses in all areas of food production. It is used to help supplement the core workforce and provide much needed flexibility to accommodate fluctuations in demand, and seasonal peaks and troughs.

However, there are certain aspects of using labour providers which if not properly managed expose your business to risk of media exposé, audit failure and regulatory intervention.

Suppliers of agency labour can be known as agencies, gangmasters or labour providers. These organisations vary hugely in size and in the sophistication of their operations.

Additionally, agency workers, by their nature, can be more vulnerable than permanent workers to unfair treatment, hence the need for both labour providers and labour users to have good processes in place.

The business case and what can go wrong

The key elements of law and areas which expose your business to risk are:

• Using an unlicensed labour provider - It is illegal under the Gangmasters (Licensing) Act 2004 to use an unlicensed gangmaster to supply labour into agriculture, forestry, horticulture, shellfish gathering, food and drink processing and packaging. The maximum penalty for using an unlicensed Gangmaster is six months imprisonment and a £5,000 fine.

• Lawful Rates – labour users should not be paying such low rates to labour providers so that legal requirements such as minimum wage, holiday pay, tax and NI cannot be met without breaking the law. There should be an additional margin to allow the Labour Provider to make some profit for their services. HMRC regard such low rates as an indicator of fraudulent evasion of VAT.

• Legal compliance - that agency workers receive their legal rights such as written contracts, minimum wage, payslips, SSP, paid holiday, rest periods etc.

• Right to Work - that agency workers are legally entitled to work in the UK (see section on Right to Work)

• Health and Safety - as the labour user is supervising and directing the work of agency workers the labour user has a legal responsibility and duty of care for their health and safety.

• Agency Workers Regulations 2010 - from 1 October 2011 this major piece of employment legislation comes into force which entitles temporary agency workers to the same right to basic employment and working conditions as if they had been recruited directly by the hirer - if and when they complete a 12-week qualifying period in a job.

Now take the next step through: Agency Labour.

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