Equal treatment of agency workers

I beg to move amendment No. 1, in clause 1, page 1, line 2, leave out ‘, or employment agency,’.

I had wanted to table an amendment to deal with the lack of a definition of “temporary worker” in the Bill, and thus to leave out any reference to the term. I have been unable to do so because such a description is part of the long title, but I will table an amendment of that nature in the future. A “temporary worker” could be a synonym for an agency worker, in which case it is not required, but it could be something else, such as a worker supplied on secondment by an employer to a client. It could be a temporary worker engaged directly by the employer, but it is difficult to make progress on a Bill when we do not know what the reference to “temporary worker” means. I should therefore be grateful if the hon. Member for Ellesmere Port and Neston would explain what he means by a temporary worker as that may enable us to make progress on the Bill.

This amendment would leave out the reference to “employment agency”. That expression is not appropriate and it is an example of the confused thinking that unfortunately is found in the Bill. Employment agencies find employment for employees with employers. They do not employ workers, so how we can compare whether they have meted out less favourable treatment in employment when the relationship between themselves and the worker ceases when the worker has the job?

I am also unsure why employment agencies have been included in the provision. Under the definition in the Employment Agencies Act 1973, an employment agency provides services for the purposes of finding individuals employment or of supplying employers with employees. When that service is being carried out, the individual seeking work has no contract with the employment agency. It therefore makes no sense to compare the treatment of the said individual by the employment agency with a person who is employed under contract as a direct worker.

Amendment No. 2 is a strike-out provision with which we agree, but we consider that it should be discussed in the context of the clause as a whole. I therefore intend to include it in my comments on the clause stand part debate.

This is an important amendment, and I hope to explain in a few moments why it should be opposed. It would leave many unprotected, because only employment businesses would be covered. The previous Bill on the same subject that the House looked at last year was confined to employment businesses, but it is not entirely clear from the record why that was the case. These businesses employ workers on a temporary basis for an end-user, so it follows that an employment business is responsible for paying their employees. Colleagues will remember that on Second Reading I dealt with an example of exactly that circumstance from Calor Gas, where two people had been employed as temps for 12 and eight years respectively.

Confusingly, the employee of an employment business is often referred to as an agency worker. An employment agency will introduce a work seeker to a hirer or end-user. The hirer may take the work seeker on with a permanent contract as an employee at the outset and pay a fee for that introduction. There is a reputable agency in my constituency that prides itself in doing just that: seeking to place people into temporary situations with a view to planning their progression into permanent employment with that employer. That is a welcome approach by that agency, and fees will be paid for that introduction.

I am trying hard to follow exactly what the hon. Gentleman is saying. The idea of permatemps is very welcome, and it is one that many employment agencies use, as he has just mentioned. However, at the same time, he is encompassing within the net all employment agencies, whether or not they supply temporary workers, so I am still concerned that employment agencies who have nothing to do with temporary workers will fall within the compass of the Bill.

That is precisely why I referred to the example I gave on Second Reading regarding Calor Gas, when it transpired at the closure of the depot that two people had been employed through an agency for 12 years and eight years respectively. I am sure that the hon. Lady, in tabling her amendment, is not seeking to justify that kind of employment practice.

Indeed, not. I hope that the discussions between the Government, the TUC and the CBI will result in some sort of resolution for the workers that have been referred to as permatemps. Their status should really be that of employees. However, that is not what we are referring to here.

The hon. Lady is right and wrong simultaneously. I understand where she is coming from in relation to certain categories, and it may be that the scope that is set out later in the Bill for defining categories of workers through secondary legislation could be finessed so as to take on board that legitimate concern and to address some of my observations at the same time.

I am grateful, because the hon. Gentleman is being very patient with me. Does he agree that it is not necessary to include the term “employment agency” in the Bill because we can finesse temporary agency in definitions to include temporary staff who are then taken on as employees?

I cannot see the merit in doing what the hon. Lady says. I would rather do it the other way round and ensure that all categories can be encompassed by the Bill, and that any class of employee who should not be covered by our attempts to address the needs of vulnerable people in difficult situations is covered through secondary legislation allowing groups to be excluded.

An agency workseeker might be required on a temporary or fixed-term basis, and the hirer might pay the agency, on an hourly basis, a proportion of what is passed on to the worker. In addition, a contract between a worker  and an agency often states specifically that the worker is not an employee of the agency and that the agency does not guarantee work. There will be no contract between the worker and the hirer in most cases.

Those circumstances are incredibly unsatisfactory, and while it is feasible to identify areas, as the hon. Lady has done, in which one might question the need to use an all-embracing approach, as I have sought to do in the Bill, it would be inappropriate at this stage to exclude any category.

I am grateful to the hon. Gentleman for giving way because I am becoming confused. I certainly support the points made by the hon. Member for Solihull. Is not there a distinction between employment businesses that employ temporary workers and then place them with specific companies, and employment agencies that simply point people in the right direction of a post and have no employment for them? I do not understand how on earth there can be a requirement on employment agencies when they have nothing to do with the employment.

That is because, as I tried to explain earlier, that simple definition does not hold because not all employment agencies are like Jobcentre Plus. They are not just placement agencies, and therein lies the difficulty. I understand what the hon. Gentleman is saying about people who are appointed to a temporary or permanent job when the agency no longer has any responsibility for them, other than perhaps to collect a one-off fee. That category of person is not the same as the category that is appointed through an agency and continues to have a daily relationship with the agency. The categories are different and both can come through employment agencies. There is confusion about what happens in the marketplace.

But does the hon. Gentleman accept that without the amendment his Bill would cover all those businesses, irrespective of where they are, and would put unnecessary, burdensome and unfair regulations on businesses?

The Bill would put no burden on someone who placed an employee in a temporary or permanent post and no longer had a relationship with them after collecting a one-off fee. I do not think that it would have any bearing on them, and it would certainly not be burdensome. If they were on a nice little earner, however, by collecting money from their relationship with that employee for a period of time, they ought to be covered. Some categories of agency could fall within the scope of the Bill, but others act in the same way as Jobcentre Plus.

In a nutshell, is the hon. Gentleman’s fear that the distinction between an employment agency and an employment business could be used by unscrupulous end users as a means of avoiding the requirements of the Bill?

That is exactly correct. It is incumbent on Parliament to create definitions that will work. It is easier to exclude people later than to return to the  House and say, “We did not get it right, because we did not include a category of employee.” We need to cover all categories that might be involved.

I am further confused. The clause covers employment businesses and end users. The amendment would simply remove employment agencies, so it would not reduce or diminish any responsibility on end users or employment businesses. It would merely remove the anomaly of including employment agencies that have nothing to do with the employment of the people concerned.

I do not know at what point either of us will get stamped on for repetition. I thought that I had just responded to that point. An agency might use part of its business to provide permanent or temporary work to people with whom it has no further contractual relationship, and another part to place people with whom it has a continuing financial relationship. I do not think that I can be any clearer than that, and that is why I urge the Committee not to accept the amendment.

The discussion has been useful, and I take the point of the hon. Member for Solihull that we need to be cautious and ensure that we get the definitions right, but as I indicated to the hon. Member for Carmarthen, East and Dinefwr, my preferred route is to start with all-encompassing definitions from which we exclude groups, rather than having to return to Parliament to build a list.

The debate has highlighted the importance of definitions. As far as I can see, the debate about fair treatment for agency workers has been focused on people in temporary placements who work alongside permanently hired staff. There is perceived injustice and unfairness. There are some confusing terms because while we talk about agency workers and employment agencies, we also talk about employment businesses. The type of business that conducts a three-way relationship among the supplying organisation, the hiring end user and the worker in between is often an employment business, whereas employment agencies can include organisations, usually called head-hunters, that are engaged in the recruitment business, but in a different way. This is about having a client group of businesses and a client group of individuals, and matching up the two for the purposes of permanent employment.

As I understand my hon. Friend’s Bill, its aim is to legislate for equal treatment for those hired on a temporary basis, which can extend for longer than would normally be considered a temporary placement, and permatemps, as described by the hon. Member for Solihull. We are all concerned about people who have been engaged in placements lasting for years and years. On any normal understanding of the term, they would be regarded as permanent, but they do not have the status, protection and rights of permanent workers. That is somewhat different from someone who might be filling in on a sort of seasonal basis or to cover for short-term leave, or perhaps just working for events where there is a build up over a significant period although the event itself might last only a few days.

The first question that we must ask is what are we trying to legislate for. My understanding, both of the European directive and my hon. Friend’s Bill, is that there is an attempt to legislate for temporary placements and people who are covered by that. We will go on to  have many discussions about qualifying periods during our consideration of the Bill, but we must start by saying that we are talking about people who are placed on a temporary basis.

The Committee might be interested in the fact that as far as I can find out—I am prepared to be proved wrong—the Bill does not include a definition of a temporary worker.

This is the heart of what we are discussing. If the Bill covered the activities of head-hunters, it would take us into a new field. It is one thing to try to regulate and legislate for the pay relationship—essentially we are talking about the pay relationship—between temporarily placed agency workers and permanent workers whom they work alongside. That in itself may be difficult, and sometimes there are no permanent workers working alongside. There is a difference between those people and those who are placed in a permanent post. I think it would take this legislation into a whole new area if we attempted—

What about the construction industry, in which there are agencies that recruit people who are technically self-employed? They are not employed by the end user or the agency. They have many of the characteristics of employees—they have set hours and their tools are provided—but the difference is that they have lower workplace rights than employees working side by side with them on the same construction site. That is why employment agencies should be kept in the Bill.

The issue of self-employment in construction is often raised with the Government. Such people may or may not be supplied by employment agencies. There are a whole series of Inland Revenue issues associated with the question the hon. Gentleman raises, but I am thinking of people who are placed in what we would normally regard as permanent jobs. The point I am making is that if the Bill covers—it appears that it does given what my hon. Friend the Member for Ellesmere Port and Neston said, although that is unclear—the activities of head-hunters who place people in permanent jobs, that would take us into a whole new field of legislation, as that is certainly not covered by the directive. I am not sure whether it is my hon. Friend’s intention to go beyond the directive, but if it is not, he might need to look again at the issue so that whatever differences we have, we can at least be clear that we are talking about people who are placed in temporary posts, rather than the activities of head-hunters. If he does not wish to include head-hunters, perhaps he might outline that and suggest how he will deal with the definitions to ensure that the Bill does not unintentionally stray into that area.

I am becoming increasingly confused. I think I understand the difference between an employing business and the end-user and some employment agencies, but if an employment agency is of the sort that the Minister describes and might head-hunt and so on, how would the Bill affect it anyway if the provision is kept in?

The fear is that the inclusion of both employment agencies and employment businesses in the definition would affect such agencies.

What would be the effect on employment agencies? If an agency does not have any employment issues, there is no problem. It is not going to happen.

The concern is that the unintentional effect of the Bill could be that we imposed on head-hunters an ongoing relationship, in terms of equal pay and treatment, between those that they place and other permanent staff in the organisation in which they were placed. That has never been the intention of the European directive, which has always focused on temporary workers. I do not wish to put words in the mouth of my hon. Friend the Member for Ellesmere Port and Neston, but I do not believe that it is his intention to do so here either. The provision as it is drafted could stray into that area, and if that is not his intention, my question to him is how would he deal with that.

It seems to me that if the employment agency has no contractual relationship with the workers in the first place—that is the sort of agency that the Minister is talking about—the Bill would not apply. The purpose of including employment agencies is to pick up those employment agencies that have some sort of contractual relationship with the worker and to ensure that employing businesses do not have a loophole whereby they can say, “Oh, we’re an employment agency.”

I understand my hon. Friend’s point, but elsewhere in the Bill there is talk of joint and several liability between end-users and employment agencies for infringements of the Bill. Although he is right to say that our normal understanding would be that there is no ongoing relationship between the head-hunter and the person that they place in a permanent post, I am not sure that the Bill clearly excludes those head-hunters from its reach. Whatever other differences there are between us, I hope that my hon. Friend agrees that we should focus the discussion on people who are placed in temporary posts, however they are defined.

It is surely not our intention to start legislating for equal pay, perhaps unintentionally, in the field of head-hunters and permanent placements. Whether the amendment is the right way to deal with that, or whether my hon. Friend the Member for Ellesmere Port and Neston wishes to table his own amendment is a matter for him to consider. Both the draft European directive, which serves as the backdrop to the Bill, and any discussions around it have always focused on temporary agency workers. It has never been the intention to legislate in a way that would affect the recruitment industry as a whole when it places people in permanent posts.

Definitions are important, but I am not sure that they are clear at the moment. At the least we should ensure that the Bill focuses on temporary agency workers, which I believe is its intent given what it says in its long title. Whether the definitions do that is at least open to question.

I agree with the hon. Member for Ellesmere Port and Neston when he says that we need to get this right. This is not a debating society; we are legislating. I share some of the concerns that the Minister has expressed and the concerns expressed by my hon. and astute Friend the Member for Shipley. It seems that the provision that we are now being invited to support goes far wider than perhaps the hon. Gentleman intended and would indeed include head-hunters.

When I was studying law, to earn extra money, I undertook part-time work with an employment agency that dealt exclusively with the entertainment sector. It provided comedy acts as well as musicians and bands for venues. Occasionally, bands asked it to supply temporary musicians when a musician was ill. For example, the late Syd Lawrence had a large—I think 35-piece—orchestra and, occasionally, if a trombonist fell ill, an employment agency dealing with musicians would be asked to send a musician to deputise. Invariably in my experience, in that scenario, the dep-musician was paid less than the permanent members of the band.

It seems that the Bill would go into the entertainment area in a way I am sure that the hon. Member for Ellesmere Port and Neston did not intend. If an employment agency dealing with musicians supplied a dep-musician to a band on a lower salary, the Bill would enable that deputising musician to sue the employment agency because the band leader did not pay him same as a valued and perhaps long-term member of the orchestra. For those reasons, the hon. Member for Solihull is right to seek to remove from the Bill the inclusion and encompassing of employment agencies.

If the Bill is passed, it will be illegal for the end-user to pay the lower salary to the temporary worker in any case. Therefore, would it not be right to ensure that employment agencies were aware of that and that they did not enter into any kind of relationship with an end-user that was seeking to do something against employment legislation?

That is all very well and it probably would be reasonable if we were discussing staff who were employed as cleaners given that cleaning a floor is the same job whether someone has been there two or three years or two or three weeks. But applying that same rule where we are dealing with artistic ability and talent would be oppressive in the extreme. It would be saying, for example, to a trumpeter of the ability of the late Harry James or the late Eddie Calvert that they could be paid only the same as the most mediocre trumpeter in an orchestra. That goes against the whole history of show business. To win wider support for the Bill, the hon. Member for Ellesmere Port and Neston has to get over the fact that the clause is too wide. It goes too far.

I understand where the right hon. Gentleman is coming from, particularly as we now see the genesis of MP4. At the time he is talking about, a zero-hours contract essentially provided for him to slot in to make up the numbers in a band from time to time when someone was sick. Had he decided to take the more radical line of some of his colleagues on MP4 and tried to recruit people to the Musicians Union, or some such organisation, he could legitimately have been sacked for doing so as he had a zero-hours contract. That  problem goes back to 1983, which perhaps I will tell the Committee about, if I catch your eye, Mr. Hancock.

That is a totally different point. I am not saying that temp musicians who work on a temporary basis should have no rights at all, but there is a justifiable argument for paying some musicians in a band or orchestra more than others, because of the talent that they bring to that entertainment unit.

There is a contradiction here. If we were talking about the general hierarchy of an orchestra, we could understand that point. However, if I have understood the circumstances outlined by the right hon. Gentleman, we are talking about circumstances where, if someone was ill or indisposed, and someone else was needed to take their place at short notice, that person would be obtained from an agency. Surely, if that person was not up to the skill or standard required, they would not be an adequate replacement. The thrust of the Bill is that where people are of similar skills and abilities, one should not be disadvantaged simply because they acted in a temporary capacity, compared to those who are there full time. It is not a question of comparative skill across the piece.

That argument cannot apply when one looks at the entertainment industry. There will always be situations where someone is of exceptional talent and is paid, because of that talent, to remain in a band or orchestra. During a period of illness, the orchestra leader is willing to carry on engagements, perhaps with a slightly reduced ability in his band, but all he needs is a replacement musician who can play in tune and read music. He may still wish to maintain the higher salary for the permanent member of the band who is ill. What is wrong with that? Why should he or she not be allowed to do that?

I agree entirely with my right hon. Friend. Does he agree that in relation to the amendment, even if one accepts the arguments given by the promoter of the Bill, the issue is about whether it is the end-user who should be held responsible for ensuring that terms and conditions are met, or the employment agency that merely signposted the person into the job? Even with the amendment, the end-user would still be included in the clause; it would merely take away any responsibility from the employment agency that does not actually employ them.

That is a very good point. The amendment moved by the hon. Member for Solihull is not perfect, but it is a step in the right direction. That is why I indicated my support. My hon. Friend is right. In the scenario that I have described, the Bill would mean that the bandleader would be legally responsible, as would the entertainment agency that supplied the temporary musician. Once his two or three-week engagement was over, the temporary musician could then sue the bandleader for discrimination under the Bill, and sue the agency that provided the job. That is not right, and I would like to think that the hon. Member for Ellesmere Port and Neston did not intend that scenario to be covered by the Bill.

For a moment I thought that these circumstances were the exception that proves the rule, but the music and entertainment industry is different  from most other things. However, one thing is similar. The point is that if somebody was at lower level, the bandleader might want to carry on with what would probably be a different format—if there was no Eddie Calvert to do the solos, it would be a different show. Under those circumstances, if he employed someone else directly instead of going to a temporary agency and did so on a lower salary, there would be no conflict. We need to consider if there will be a difference if someone is employed directly or on a temporary basis because they should be treated the same. If the intention of the bandleader was to employ somebody directly on a lower salary, the right hon. Gentleman could legitimately justify what he says about someone below standard being paid less on a temporary basis.

These interventions show that if the Bill goes ahead in its present form, the whole subject will become a lawyer’s paradise. If the Bill looks as if it will get on the statute book, perhaps I should renew my practising certificate because I can see dispute after dispute arising.

My right hon. Friend raises an important subject. Perhaps we should consider a less glamorous, more straightforward form of employment than the one he clearly knows a great deal about, such as teaching. Let us consider the example of someone taking over from a teacher who had been at the school for many years, and who was on the enhanced salary offered by the Government to encourage good teachers to stay in the classroom. Would it be reasonable to employ someone who might have just come out of college to teach that class for that term, at the same enhanced pay rate that the teacher who was destined to teach the class for that academic year would have received?

I thank my hon. Friend for her intervention. The example she gives is more difficult to deal with because it could be argued that clause 1(2) addresses that issue, whereas the music industry would be caught by the Bill, which would lead to a lot of difficulties. Everything is capable of being resolved, and I would be much happier if the hon. Member for Ellesmere Port and Neston said that he would accept from me an amendment to exclude the entertainment industry from the Bill in cases where the differentials relate to the circumstances I have described.

I understand the right hon. Gentleman’s concern, but clause 1(2)(b) states that the provision applies only if

“the treatment is not justified on objective grounds.”

He is quite right: the example of the measured capacity of a teacher or a nurse could easily be covered by that. Some of the examples that he gave related to subjective judgments about artistic value; nevertheless, the training, skill and earning capacity of the musician are objective measures that could be used. How does he separate his example of an arts teacher from an artiste in a band?

This is a difficult area, and that is why my hon. Friend the Member for Huntingdon got a bit excited when I said I would be less unhappy with the Bill if it excluded entertainment, to which he said sotto  voce, “Only entertainment?” The entertainment industry will have real difficulties with the Bill because musicians are paid not only in accordance with their merit, but with the history of where the band, orchestra or group comes from. For example, I know of cases where an act had minor national success in the pop charts and then a member left. a new member was recruited—sometimes through an agency—to take the place of that person, but because the band was established before that new member joined, they were put on a salary and received no percentage of the profits from the sales of the record that was a hit before they joined. It could therefore be argued that that person was treated unfavourably, and that they have a right of action under the Bill and could sue the employment agency for offering them a contract on terms less favourable than those of any other band member, when their musical ability may exceed that of other members of the band.

I hope that the hon. Gentleman will reflect on the difficulties that the Bill would present for the entertainment industry. I have used musicians as an example, but the difficulties would apply to other areas such as circus acts and dance troupes, which need to be exempt from these provisions. All that we have before us is the modest amendment moved eloquently by the hon. Member for Solihull, and as that is all that is on offer, I will support it.

There are a lot of red herrings flying around. I was interested in the approach taken by the right hon. Member for East Yorkshire, who is himself a musician of some standing—a rock giant to some of us. He knows the industry much better than I do, but I am old enough to remember Eddie James and Eddie Calvert. They were never looking around for work and never used anything other than their agents to get them prime appointments, not fill-in appointments in a band. There may be problems with other aspects of the music industry.

I want to talk about my experience in this field, which is mainly as an employer. Like the right hon. Member for East Yorkshire, I am a former solicitor. I no longer have a practising certificate, but he is absolutely right that there could be lucrative work here. Often in my practice, I had to use agencies. I always used registered employment agencies, because I knew that there was at least some scrutiny of the way in which such businesses operated. I always looked for businesses that I thought were reputable, because I thought that that would give me the best chance of getting the sort of person whom I wanted.

Usually, I needed people such as secretaries for short fill-in jobs. I do not think that many solicitors were available from the employment agencies that I used, but I know that agencies now exist in specialised areas such as engineering, accountancy and law. All sorts of professions and skills are now available in the market. The contract was between me and the agency—I had no say in what the individual was paid. Very few of them stayed long enough for me to find out what they were paid. As I understand it, that remains the case.

I would not have been interested in what is described in the Bill as “an employment business” because I wanted something that had scrutiny and a registered regulation process attached to it. The Bill tries to deal with the sorts of agencies that come under less scrutiny, and such businesses might come into that category.  However, that does not exclude employment agencies, the requirements on which seem to have loosened over the past 20 or 30 years. The scrutiny that used to be available when I was a practising solicitor in the ’70s and ’80s seemed to be quite a serious and onerous requirement. I am not sure whether that is the case now.

The Minister was right to raise the point about head-hunters. My only experience of working with a head-hunter came recently when working in this place. I was on the interviewing panel for a very senior Official of the House. Head-hunters were appointed, and as I recall, the House was responsible for the advertising. The head-hunters’ job was to scrutinise the people who applied, to put tentacles out to find other people and to encourage people to apply. The result of that process was selection by interview by a panel of people appointed by the House, including Officers of the House; myself, representing Members; and an independent person representing outside industry. The contract with the head-hunting agency was simply to do the trawl and the filter. The relationship with the person employed is between the House and the individual, with a normal employment contract featuring statutory terms and conditions and so on. I do not see why head-hunters come into this process at all. The vast majority are employed to find employees, not to act as an agency in the sense that I understand it. That is quite a different situation.

Head-hunters potentially come into the process because of the definition of “employment agency” in the Bill. An employment agency is a business that provides services

“for the purpose of finding workers employment with employers”.

That is what head-hunters do, and that is the definition of employment agencies in the Bill.

My recent experience, which I admit is not profound or wide, is that the head-hunter is involved in the search for the employee, but the employer makes the final choice. That is the difference. In my view, head-hunters do not come within the definition of employment agencies in the Bill. It is open to argument because some head-hunters may operate differently.

The definition of employment agency uses the phrase

“finding workers employment with employers”.

That clarifies the position, in that head-hunters find the individual, not the employment.

I agree entirely with my hon. Friend. Such matters are open to debate and argument, which is why we are here.

I believe strongly that employment agencies should be included. If they are excluded, there would be a route for disreputable business to get underneath the terms of the Bill and to avoid the provisions that we trying to implement. That would be unfortunate and it would completely undermine the process. I am sure that we will have plenty of opportunity to discuss later the serious problems facing those at the lower end of the employment spectrum who do not get the rate for the job, who operate under appalling terms and conditions, and—going against one of the Government’s main employment objectives: to improve the skills of the work force—who tend not to be trained. We have a substantial cohort of vulnerable workers. If removing  the legislation’s application to employment agencies drove a coach and horses through that protection, I would be extremely concerned.

All Members of the House have enormous sympathy with exploited, vulnerable workers. The hon. Gentleman talked about unscrupulous employment agencies trying to get underneath the Bill. Does existing employment legislation not cover the activities of unscrupulous employment agencies? Does he not agree that the problem is not with the law but with its enforcement, and that the unscrupulous agencies to which he referred are breaking the existing law, which we need to enforce?

The hon. Lady makes a good point, but a huge amount of money is invested by the Government to enforce, for example, the minimum wage provisions. A lot of the exploitation that we are talking about takes place under the radar. We need tougher measures to ensure that existing regulations and legal requirements are met. The Bill is part of that process, which is one reason why I support it.

I want to ask my hon. Friend to go back to what he was saying about head-hunters. Does he accept that the Bill should not cover head-hunters? That is a different issue from what we normally talk about in the field of agency workers. Does he accept that if, inadvertently, the Bill covered them, it would have to be changed?

If head-hunters along the lines that I described in my earlier comments were covered, I would be concerned. It seems to me that they are not operating as employment agencies, but as agents to find employees of a particular brand and definition. We can look at the issue as the Bill progresses.

Is it not the case with the head-hunters that the commercial and contractual relationship is between the potential employer and the head-hunting company? There is no commercial relationship between the head-hunting company and the individual identified for potential employment by the employer.

That is exactly right. I thank my hon. Friend for that. To repeat what I said earlier, I oppose the hon. Lady’s amendment.

It is a pleasure to serve under your chairmanship, Mr. Hancock. I would like to start by congratulating the hon. Member for Ellesmere Port and Neston for getting his Bill to this stage, which is an achievement in itself, particularly when opposed by all the main parties’ Front-Bench Members. There will be plenty of time to discuss our fundamental disagreements over the Bill as a whole, but this debate is to do with the modest amendment moved by the hon. Member for Solihull, with which I agree wholeheartedly. There are some fundamental disagreements about the principles, and some of the comments we heard today were an example of 1970s socialism of which Arthur Scargill would have been proud.

I would like to focus on the point about removing employment agencies from the clause. We seem to have got ourselves into a bit of a muddle over definitions and what would and would not apply under the Bill. Although I oppose the Bill in its entirety, even those who support  the Bill and its intentions ought to reflect further on the organisations they would be including. Following on from the speech of my right hon. Friend the Member for East Yorkshire, which I thought highlighted some of the issues particularly well, the hon. Member for Aberdeen, North said that, in his experience, musicians—certainly the top ones—did not have to go to employment agencies to find work. They found work through their agents. What struck me as a result of that remark was whether agents themselves would be included in the definition of employment agencies.

It is important that we look at the definition of employment agencies, as specified by the Bill. It states that

“‘employment agency’ means the business (whether or not carried out with a view to profit and whether or not carried out in conjunction with any other business) providing services...for the purpose of finding workers employment with employers or of supplying employers with workers for employment by them”.

That is what agents do when representing particular clients. They are finding employment for workers with employment. Clearly, in the Bill’s definition, the agents themselves would be included. However, the hon. Member for Aberdeen, North was saying that that was nonsense, because people found work through agents, as if they would not be applicable. None the less, it strikes me that employment agencies would apply under the clause, if we do not remove them from the clause.

The definition is helpful, because it makes it clear that it is

“for the purpose of finding workers employment with employers or of supplying employers with workers for employment by them”.

That is perfectly clear. The employment agencies have nothing to do with the employment of the people concerned, but are merely finding those people jobs. At that point their relationship with them ends. That is perfectly clear in the definition. What would strike me as bizarre is a situation in which an employment agency, having done its job—having found a worker a job with an employer, or an employer a worker—would be left with an endless liability into the future, lest at some point the end-user, the employer, decided not to honour the terms and conditions for those entitled to them. Why on earth should the employment agency have an ongoing liability when its part of the deal has been done satisfactorily on behalf of both the employee and the employer? The agency might do its bit perfectly well, yet the Bill would leave it in limbo.

In those circumstances, though—if the employment agency had done its job to the satisfaction of the employer and the employee—presumably the employee would not take action against the agency. They would take action against the end-user who broke the contract with them.

I am grateful for that helpful intervention, because that is my point entirely. I do not accept the premise of the Bill, but even if one does, the root of the solution to any particular problem clearly lies with the end-user. Even with the amendment tabled by the hon. Member for Solihull, clause 1 would still provide for people to take the end-user to task.

The point is whether the employment agency should be included all. Given that the end-user is included and that redemption can be sought through that end-user, it serves absolutely no purpose to list employment agencies in the Bill. It will serve only to create uncertainty for agencies. As the hon. Member for Nottingham, East said himself, it will not make any difference for the employee.

Has the hon. Member for Nottingham, East not missed the point? If an aggrieved worker went to the hon. Member for Aberdeen, North—let us say that he resumed his law practice in Scotland, having lost his seat—the advice that he would get is, “Your rights, sir, are not only to sue the employer but to sue the agency. We think the employer may be short of funds or in financial trouble, so we advise you to go to the agency first.” That is what the Bill provides for.

My right hon. Friend is entirely right. He has highlighted astutely the can of worms that we may be opening. In fact, it may go further than that. The solicitor might say, “Well, you might not want to upset your employer, because that’s who you’re employed by. Rather than pursuing your employer, who you don’t want to get on the wrong side of, why not go for the employment agency instead? You’ve got no dealings with them whatsoever. You’ve got nothing to lose at all by having a go at them.” According to the Bill, the agency will be just as liable as the end-user. The clause makes no difference between them. The employment agency may end up being the one left in the firing line, even though we on the Committee all seem to agree that the employment agency would not be responsible at all for the situation in which such employees found themselves.

In terms of the bureaucracy involved in recruiting people from employment agencies, we might end up in a difficult situation. At the moment, an employment agency can find somebody a job under terms and conditions acceptable to both the employee and the employer. Under the clause, if it transpires that some people in the firm are paid differently, the employment agency, even if it had no prior knowledge of that, might find itself liable for a problem that it could not have anticipated and for which it was not responsible, even though the employee and employer were both happy with the terms and conditions of recruitment at the time.

If it transpires further down the line that some people are being paid differently, employment agencies might be held responsible for that too. That could mean that in order for any employment agency to find work for an employee, it would have to ask the employer to hand over all files on the pay, terms and conditions of all the people who currently work in the firm, to ensure that nobody it places in that firm is being disadvantaged in any way. I used to work for Asda, which employs between 120,000 and 130,000 people. It often took on temporary workers at Christmas and Easter, when there is a bit of a rush on in the stores. If employment agencies had to go through the rigmarole of checking up on the pay, terms and conditions of all Asda’s employees just to ensure that nobody would be disadvantaged by comparison with anybody else who worked there, who on earth would want to start up an employment agency?

Is that not in some respects the point of the Bill, in the sense that the employment agency and  we, under the Equal Pay Act 1970, should be looking at transparency with regard to the pay and conditions of employees to ensure that they are paid a reasonable wage for their job? Is that not part of the premise of the Bill?

I understand the hon. Lady’s point, but that is where the difference lies. She is saying that people should be paid a fair wage for their job, but that is not what we are discussing: we are discussing whether people should be paid an equal rate for their job. As my right hon. Friend the Member for East Yorkshire made clear, there are many good reasons why people should not be paid equally for their jobs. Many employers want, for example, to reward people’s loyalty over long periods of time with higher pay, better terms and conditions and longer holidays. That seems to be a perfectly reasonable way to reward people who have been loyal to a firm for a long period. The hon. Lady seems to be mixing up paying and treating someone fairly with treating them equally, but there is a huge difference between the two. Ensuring that people are not treated in a manner that is not equal would put a massive burden upon employment agencies to find out huge swathes of information before they could confidently place someone with an employer, even though the employee was happy with their terms and conditions at the time.

I very much agree with my hon. Friend’s argument, and it invites a question about how people could establish the information that would protect them from any legal suit. They would have no right to know that information.

Indeed, my hon. Friend makes a good point. Obviously, much of that information might be covered by data protection in the first place or might be commercially sensitive. For example, an agency might provide workers for different firms within the same sector, but a business should not really be expected to give out its terms and conditions to an agency that might be able to pass that information on to a competitor. We would open up a huge can of worms simply by including employment agencies in the scope of the clause. The hon. Member for Solihull was astute in spotting that potential flaw, and that is why she is moving her amendment to make them exempt.

We have many fundamental disagreements about the principle of the Bill and its practicalities, but even if one accepts the premise that people should be given those rights, given the definition of employment agencies in the Bill, I do not see how on earth any employment agency could end up with a lasting liability for any unfair treatment when it is clearly not their responsibility. Furthermore, that group would clearly include head-hunters, as the Minister made clear, because their sole purpose is to find workers for employers. That is clearly an unfair burden to put on them.

The hon. Member for Ellesmere Port and Neston pointed out that subsection (2)(b) states that subsection (1) only applies if

“the treatment is not justified on objective grounds.”

As my right hon. Friend the Member for East Yorkshire made clear, that could be a lawyer’s gold mine, because there will be differences of opinion on what constitutes objective grounds. The hon. Member for Ellesmere Port and Neston, who I know to be a perfectly reasonable  man, might come up with a definition of objective grounds that is perfectly reasonable. All of the members of the Committee might well come up with their own definitions of objective grounds that are particularly reasonable, but we are supposed to be setting legislation that is clear cut and will give employers and employment agencies some kind of certainty that what they are doing is fair. Simply having a rather vague line that seems to have been thrown in at the last minute to try to overcome any potential pitfalls by saying that the treatment is not justified on objective grounds seems to offer no certainty for employers or employment agencies to go about their legitimate daily business.

If the clause is not amended in the way that the hon. Member for Solihull proposes, the provisions would be worse for employment agencies, who would have long-lasting liabilities that they would not be able to control. It would be worse for the employees, because I cannot imagine many people wanting to take on such a potential liability, and therefore there would be far fewer employment agencies to find people work with employers. I cannot imagine many people wanting to take on such a potential liability.

Although my hon. Friend and I have ongoing objections to the Bill for other reasons, does he agree that it would be far less objectionable if it excluded employment agencies acting in the narrowest sense—in other words, those acting as mere facilitators, with no ongoing contractual relations with the worker?

My right hon. Friend is right in the sense that the clause would certainly be a lot less objectionable, which would make the Bill less objectionable. However, the Bill would still be objectionable, albeit slightly less so. I go some way towards accepting his point, but I would not want to mislead anybody into thinking that accepting this rather modest amendment would suddenly make the Bill all hunky-dory; the Bill would still be fatally flawed, although slightly less so.

My right hon. Friend does, however, make a valid point. As everyone has said, the clause should not include head-hunters and those who simply pass others on for a job and then have no further relationship with them. Everybody has accepted that point. That is why I thought that the hon. Member for Ellesmere Port and Neston made a useful distinction between employment businesses and employment agencies. Even if we accept the amendment, employment businesses would still be covered by the clause. Those who still have an ongoing relationship with such businesses would therefore still be covered, as would the end employer. The amendment would simply remove from the equation those who do no more than find somebody a job that they are happy about with an appropriate employer and who then have no further dealings with that person. The amendment in the name of the hon. Member for Solihull is modest, but it would improve the clause considerably. I support it on that basis.

It is a pleasure to serve under your chairmanship, Mr. Hancock. It looks as if we might have a very long summer ahead of us, although I fear that the hon. Member for Shipley will never be satisfied—we shall see. As a member of the only party represented on the Committee whose official policy is to support the Bill, I think that I have a duty to say something at this stage.

The hon. Member for Solihull said that this was a probing amendment, and it has raised some interesting issues.

This is not a probing amendment. Unless the hon. Member for Ellesmere Port and Neston amends or withdraws the relevant provision, I shall press the amendment to a vote.

I am suitably admonished. I was trying to tempt the hon. Lady in my direction, but it did not work.

Nevertheless, the amendment has raised some interesting issues, and some of us may not be as far from each other as we appear to be. I cannot speak on behalf of the hon. Member for Ellesmere Port and Neston, but those of us who support the Bill did not intend, for example, recruitment consultancies working for investment banks in the City of London to be caught in the net of the Bill. Although the workers they deal with might now be vulnerable, given the way the economy is, they are not vulnerable in the sense meant in the Bill.

The fear expressed by several hon. Members—we are not lapsing into a conspiracy theory—is that if the Bill were passed, some employment businesses could reinvent themselves as employment agencies or mask their employment business-related activities so that we ended up with exactly the same circumstances. For example, there is the construction industry scheme under which groups of workers are recruited by employment agencies. They are technically self-employed, and that allows the end-user to avoid giving them the same set of rights and conditions that they would enjoy as direct employees.

Philip Davies rose—

Casualisation provides huge advantages to employers, and no doubt the hon. Member for Shipley is about to say, “No bad thing either”.

The hon. Gentleman’s fear that employment businesses will become employment agencies is misplaced. This is not self-definition. It is not the businesses that define what they are. The definition is in the Bill. The nature of the service that businesses provide is covered in the Bill, and so the term “employment agency” can be removed without any fear that people will define themselves in a different way.

Yes, but what I fear is a much broader restructuring of the labour market, whereby people who may be currently employed through employment agencies may be encouraged to become self-employed on short-term contracts. Contracts would be constructed to allow that to happen, as in the construction industry. Some 20 per cent. of workers in the construction industry are self-employed and recruited through employment  agencies. They do not work for employment businesses or the end-user. They are vulnerable workers. In the terms of the Bill, they are temporary agency workers. The Bill would allow us to protect those workers, because it includes employment agencies under its rubric.

The right hon. Member for East Yorkshire raised some fair points in relation to specific sectors. Concerns have also been raised in other sectors where there are high net value employees—for example, engineering and IT consultants. They are concerned that their circumstances could be disadvantaged by the Bill because they have secured advantages from flexible labour markets and casualisation. They are highly skilled—many of them have a unique set of skills and are in high demand—and it suits them to have flexible short-term contracts. The situation is perhaps similar in parts of the creative industries. One could argue that the lower the skill level and the seniority level—even within the creative industries—there is exploitation, in particular of younger workers at the bottom.

We need to be mindful that in some sectors and in some circumstances there perhaps needs to be specific exemptions. We are not talking about vulnerable workers but about workers with unique sets of skills. The hon. Member for Ellesmere Port and Neston alluded to that. In economics we refer to economic rent; even individuals have a unique value in the marketplace. For example, it is almost impossible to compare professional footballers like for like. The only way to do that is through the marketplace, where a price is set for them. In certain sectors, right at the top of key industries, we are talking about a wholly different set of circumstances to those of vulnerable workers who are exploited by disreputable employment agencies and employment businesses. At this stage, it is better to have an expansive definition, and if there are sectors and particular circumstances in which it is clear that exemptions should be made, that can be done at a later stage.

The hon. Gentleman points up a difficult aspect of the Bill, which is that there are many groups in very different circumstances. There are people at the top of the pile, as well as people who are undoubtedly exploited. Conservative Members accept that there is a case in some areas. However, I can think of other groups, perhaps women who have children, who could be seen as vulnerable because—

Order. At this rate we could be here till the recess.

It being twenty-five minutes past Eleven o’clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till Wednesday 14 May at half-past Nine o’clock.