Gangmasters (Licensing) Act 2004

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The Gangmasters (Licensing) Act 2004 is a UK Act of Parliament, which regulates the agencies that place vulnerable workers in agricultural work shellfish collecting and industries packing either (s.3). It establishes the Gangmasters Licensing Authority (s.1), which requires all such agencies to get a license before they operate and adhere to proper labour practice standards. Most of its provisions came into effect after 2005.[1] The immediate cause of the legislation was the 2004 Morecambe Bay cockling disaster, where 21 Chinese immigrant labourers were left to drown by their employers (the racketeers were subsequently convicted of manslaughter, some deported back to China) off the coast of Cumbria as the tide swept in around them.

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[edit] Licensing

Before 1994, all such agencies would have required to be registered under the Employment Agencies Act 1973. But then the Deregulation and Contracting Out Act 1994, a wide ranging measure designed to trim government, scrapped the lot. The 2004 Act requires licenses for any business doing labour placement in the agricultural and shellfish sector (s.7) and they are contingent on the rules which the Secretary of State lays down (s.8), found in the The Gangmasters (Licensing Conditions) (No.2) Rules 2006 SI 2006/2373.

To get a license, the rules require a fee linked to the agency's turnover (r.7) ranging from £250 to £4000 for businesses turning over under £1m to over £10m respectively. Agencies also have to pay for inspections of their work environment, to get licensing approval (r.8). Based on turnover in the same way, the fees go from £1,600 to £2,500.

Charging fees to labourers directly is prohibited by Schedule r.4(10)(2), and by the Employment Agencies Act 1973 s.6. The rules make the end-user the only one allowed to pay the worker (r.6), restrict the agency's power to contract with the end-user to prevent the worker taking up permanent employment (r.7), prohibit the practice of withholding pay from labourers as a sanction (r.8), require the agency to provide the end-user with a document containing the terms of the agreement on fees, and what to do if the worker is no goo (r.11) they prevent gangmasters giving each other workers unless the worker has properly consented (r.16) and require record keeping of each worker (r.19).

The agency must give the labourer information about his legal rights (r.15). These will invariably be few, because he will probably be considered a "worker" rather than an "employee". What such legal semantic distinctions mean (see s.230 of the Employment Rights Act 1996) is the difference between a guaranteed minimum wage, working hours and holiday time (for a "worker") and rights to unfair dismissal, maternity, paternity and parental leave, reasonable notice before dismissal, redundancy and more (for an "employee").

[edit] Enforcement

The 2004 Act creates a number of offences with heavy penalties. Under s.12(4) you can face 10 years imprisonment for acting without a license. Under s.13, people who deal with unlicensed gangmasters can face 51 weeks jail, unless they can show they took all reasonable steps to find that the gangmasters were licensed.

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