Clause 21

Part of Employment Bill [Lords] – in a Public Bill Committee at 2:00 pm on 16 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 2:00, 16 October 2008

We move on to a different subject, which is proposed in two very similar new clauses—new clause 3 and Government new clause 8. Earlier on in our deliberations, we talked—at least, I talked—about  the Government’s vulnerable worker enforcement forum, which has met over the past year and considered a number of issues in relation to the vulnerability of people at work and their capacity to report abuses, and the enforcement agency’s capacity to act on those reports. That is important in terms of the rights of vulnerable workers, in terms of legitimate businesses, and in terms of the taxpayer, who legitimately wishes to see the most effective use of their funds in the enforcement of the law.

The forum’s report, which was published in August, sets out a programme to improve basic awareness of employment rights, to facilitate and encourage the reporting of abuses and to take steps to join up the workplace enforcement bodies and enhance their profile. One key issue that the forum identified was the need for closer working between the enforcement bodies. An important element of that is the ability of the bodies to share information about non-compliance. That is addressed in the new clause in my name and in that tabled by the Liberal Democrats.

As the forum recognised, there are currently barriers to effective information sharing between some of the enforcement bodies, including between those that enforce the national minimum wage and those that enforce employment agency legislation. The Employment Agency Standards Inspectorate can contact Her Majesty’s Revenue and Customs, which enforces the minimum wage, about potential non-compliance with the minimum wage only before it has undertaken an inspection when a complainant has clearly stated that there is a minimum wage issue or where that is clear from the complaint. Once an inspection has started, the current legal position is that it would be an offence to disclose information obtained during the inspection. In those circumstances, the agency standards inspectors can only advise the complainants to contact the minimum wage helpline.

Information about compliance with the minimum wage does not always come to light until the inspection is carried out, by which time it would be too late to pass from one agency to another. Clearly, there would be value in the inspectorate being able to contact HMRC after an inspection has been carried out, rather than having two sets of inspectors working in silos, where once they had started their work, they were not able to communicate with one another. The converse is also true: the restriction on minimum wage officers being able to share information about breaches of the law with regard to employment agencies or details of non-compliant employers represents a similar barrier in the other direction.

The minimum wage enforcement team at HMRC visited 122 employment agencies last year during the course of its national minimum wage enforcement. Of those, 30 were found to be non-compliant. Those 30 agencies may be non-compliant in other ways too, so this is valuable and important information sharing. There is really only one difference between the two clauses dealing with this issue. The new clause in the name of the Liberal Democrats deals with the particular bodies I mentioned in my remarks, that is HMRC and ASI. The new clause in the name of the Government deals with the Acts, which in terms of future-proofing, should give us a little more flexibility to ensure that, were we to go down that road, even if the bodies enforcing the provisions under these Acts change in the future, the information-sharing permission which we seek to gain through this new clause could continue.

Much of this information between enforcement bodies is not a matter of principle. It is more to do with when the founding legislation for a particular body was passed by Parliament. For example, the Gangmasters Licensing Authority which was established a couple of years ago does not have this gateway problem of information-sharing. No one has suggested that the fact it does not have such a gateway is a problem. We are seeking to bring other bodies into line with that. Nor do I pretend—and it is important to stress this—that with the passage of this new clause we will have entirely dealt with the difficulty of information-sharing between different enforcement bodies in the employment field. What we would be doing is taking the earliest possible legislative opportunity after the publication of the vulnerable worker enforcement forum report to address the issue in the context of agency standards and minimum wage. Although I am grateful to the Liberal Democrats for tabling the amendment that addresses the same issue, I believe that operating on the basis of the legislation rather than particular bodies may be a better way to do it and I hope that hon. Members agree.

Amendment No. 21 provides for a commencement by order of new clause 8 and is therefore consequential to it. Amendment No. 20 deals with the passage of time. In the dim, distant and hopeful past there was a possibility that this legislation may have completed its parliamentary passage by now and, as hon. Members will be aware, the Government take the view that when bringing in new legislation which has an effect on employers or businesses, that it is best to do that on one of two common commencement dates so that employers know when changes will come into force. Hon. Members will see that clause 21 as it stands at line 16 refers to 1 October 2008 as a possible commencement date. That date has clearly passed. By my watch, that is 15 days ago and this amendment simply takes account of that to ensure a commencement date that is in the future.