The Association of Labour Providers (ALP) has accused users in the fresh produce sector of refusing to pay the required rates to labour providers that would enable them to meet this week’s new national minimum wage and holiday entitlements for temporary workers.
The association’s director, David Camp, has stated that some labour users will not increase their rates of pay to their labour providers, despite the changes. “It is totally unreasonable that although the minimum wage is increasing by 17p an hour and accrued holiday pay in the non-agricultural sector has gone up by 20p an hour, our members have reported that many labour users are refusing to pay the full increase in rates to labour providers.
“The supermarkets and other wholesale purchasers of food also have a duty to ensure that they are not benefiting from worker exploitation and tax evasion,” said Camp. “They have a strong duty to ensure fair and legal rates are paid to labour providers throughout their supply chain. If not, they are allowing worker exploitation.”
Freshinfo found evidence this week that one major fresh produce labour user was negotiating with a provider to slice by a third the 36p-an-hour margin calculated by Defra to be the minimum needed by a labour provider to run its business.
“It is also unacceptable that many farmers and agricultural packhouses refuse to pay overtime rates to temporary workers in accordance with the Agricultural Wages Order,” said Camp, pictured. “With the advent of the Gangmasters Licensing Authority (GLA), any labour provider that does not pay minimum wage or agricultural overtime risks having their licence revoked and being put out of business. This is not a risk that labour providers can afford to take.”
The rate paid by labour users is a key variable that the GLA monitors to identify where labour providers are not complying with the minimum wage. “Labour users that pay unrealistically low rates are knowingly or recklessly conniving in illegality,” said an ALP statement.
The ALP has issued its updated Temporary Labour Minimum Charge Rate Tables to include the October 1 increases. These are available to download on www.labourproviders.org.uk.
The GLA, which also publishes the tables on its website, has warned that the industry needs to take its duty in this regard seriously. “There has got to be responsibility at both ends of the chain,” a GLA spokesman told freshinfo. “People are looking to reduce their costs, but there needs to be a realistic pricing structure in place. If people are going in and quoting way below our guideline amounts, then that shows something is not right.”
He also warned that similar swoops to Operation Scallion, which saw Bomfords targeted, to uncover non-compliance among its labour providers were likely. “We are looking at continuing that kind of operation and I am sure there will be more. We have a number of things in the pipeline and we are looking at big hits to get a lot of people,” said the spokesman.
Camp said the ALP is continuing to urge both HMRC and the GLA to step up enforcement activity targeted at labour users paying unrealistically low rates. “They face serious disruption when eventually the authorities catch up with them; Bomfords is a case in point,” said Camp, referring to Operation Scallion.
Asda was the only major multiple to respond to freshinfo in time for deadline, and said it is playing an active role in the issue. “Supermarkets have a role to play and Asda’s Chris McCann, who represents the British Retail Consortium on the board of the GLA, has been instrumental in this process,” said a spokesman. “Our approach is to ensure that we are paying a fair price to our suppliers, and they in turn pay a fair price back down the supply chain. We are heavily involved.”
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