Clause 16

Part of Employment Bill [Lords] – in a Public Bill Committee at 5:30 pm on 14 October 2008.

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Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee 5:30, 14 October 2008

The clause relates not so much to how offences are tried as to the wider powers of the agency standards inspectors. It will increase those powers by enabling inspectors to require a person carrying on an agency to provide financial records and documents. It will enable them to require records, documents and information at a time and place that they may specify. It enables them to require banks to provide financial information regarding agencies. I will say more about that in a moment. The clause will also enable inspectors to remove documents from an agency in order to take copies. We dealt with some of those issues this morning when discussing minimum wage enforcement.

Again, there are currently problems in assessing the scale of abuses, which compromises the effectiveness of enforcement against rogue and disreputable agencies. There is an absence of powers to obtain financial records from agencies. For example, an agency worker may come forward and say that the regulations are being contravened. They might not be getting paid properly, or they might be being levied with illegal deductions. Even if that case is proved, it can be difficult for the Employment Agency Standards Inspectorate to know whether it is an isolated case or whether such practices are rife in the company.

When investigating serious complaints, the inspectorate needs to find out the scale of the illegal practices being carried out by agencies brought to their attention. If illegal payments have been made or illegal deductions taken, it must know whether those are isolated cases or whether they are widespread. Given the reluctance of agency workers to come forward, it may be that significant numbers of workers are in the same situation and have not had the courage to report it.

At present, the inspectorate does not have powers to obtain financial information from an agency that does not want to provide that information. An inspector does have the power to request any person present on the premises to inform him of the whereabouts of any record or document that is not on the premises and to make arrangements for it to be made available. Frequently, the person on the premises is not the person in charge of the agency. This is a particular difficulty when dealing with a three-party relationship in which the hirer, the agency and the worker are all involved. The person in the hiring company will not necessarily know where those records are. Inspectors have encountered difficulty in obtaining information from agencies where a former member of staff may have removed self-incriminating evidence, or where records are being withheld that may point to another person’s being involved in the running of the agency—again, in cases where there is a prohibition and so on.

So there are a number of circumstances where extra information-gathering powers can help. That is why we believe that the clause will strengthen the powers of the Employment Agency Standards Inspectorate and allow it to look not just at individual cases reported to it but, on the basis of those reports, to find the necessary information to enable it to judge whether they are isolated incidents or a wider practice that requires a wider response.