Standing Committee E
Tuesday 23 March 1999
(Morning)
[Mr. Peter Atkinson in the Chair]
Clause 28
Employment agencies
10.30 am
Mr. Ian Bruce (South Dorset): I beg to move
amendment No. 120, in page 15, leave out lines 22 to 37.
The Chairman: With this it will be convenient to take
the following amendments: No. 122, in page 15, line 31,
at end insert
`Provided that regulations under this section shall only be made
with the purpose of protecting employees' rights and not otherwise
to interfere with the commercial relationship between such agencies
or businesses and employers'.
No. 254, in page 16, leave out lines 10 to 16.
Mr. Bruce: May I put on record my somewhat
qualified thanks. The Whip was kind enough to point out
this morning that I should look in my post. I found there
the draft consultation document on the regulation of
private recruitment industries. I have taken the document
out of its envelope, but I have not yet read a word of it.
We put the Government on notice that although the
document might be helpful, we are likely to debate its
contents when we return to clause 28 on Report.
Mr. Tim Boswell (Daventry): Although my hon.
Friend has not read the document in detail, a problem that
he shares with me, does he concede that it was more or
less physically impossible in the time available to read it,
let alone assimilate its 60 or so pages of closely typed
print?
Mr. Bruce: I am grateful to my hon. Friend; but, as I
said, I have not read a word. I have not even attempted to
start reading it.
Before getting into the meat of the amendments,
Mr. Atkinson, I thought that it might be appropriate to
give a short history lesson to hon. Members who have not
worked, as I have, in the employment agencies industry.
I left the industry 12 years ago, and I earn no money from
it, but I thought that it would be useful to put on record
how the Employment Agencies Act 1973 and the
regulations that flow from it came into being.
Some hon. members may be surprised to discover that
the idea for the 1973 Act came from a private Member.
Sir Kenneth Lewis, who was the then Conservative
Member for Rutland and Stamford, decided in the early
1970s that, because his industry the travel agency
industry was highly regulated, the employment agency
industry should be covered by national regulations to
protect the rights of employees.
The Employment Agencies Act 1973 was meant to
acknowledge that an individual who wandered in off the
street to work for an employment agency for a week or
two, or even for only one day's work, was not in the same
position as an employee who, after an interview, could
have several months to think about whether he wanted to
work for that employer. An employee has a permanent
contract with the employer; it is a long-term and different
relationship. However, in view of the way in which they
put people to work, it was decided that employment
agencies should be additionally regulated, to ensure that
individuals were fairly treated.
Before Labour Members say that the Government
should get rid of the 1973 Act because it was a Tory Bill,
I should say that the regulations were made not under a
Conservative Government but under a Labour
Government. The regulations were made to protect
employees fully. However, the Prime Minister was
incorrect to say that, because the Act dated from 1973, it
was high time that it was revised. The regulations have,
of course, been revised many times since then.
The Employment Agencies Act 1973 is designed to
protect employees. I have searched the database for the
hon. Member for Corby (Mr. Hope) who had, I thought,
given the same speech on a dozen occasions. I was
incorrect he has given it on only three occasions,
although he may have intervened to give it on others.
When I first arrived in the House, an older Member
told me, "If you have a good speech, stick with it it
could keep you going for 20 years". The hon. Gentleman
is an example of someone who seems to have based his
whole career on one speech. He may be justified in his
belief that some employment agencies in his constituency
have been up to things that he does not like. However, he
has given us only the example of a lady who lost her
wages, or had them reduced, because she did not turn up
for the full duration of her contract. He has not named the
agency involved I hope that he will do so today and
the details of the story have changed each time that he
has given it.
Mr. Ian Stewart (Eccles): Whose speech are you
giving?
Mr. Bruce: I am trying to boil down the speech by the
hon. Member for Corby, as I know that he will want to
make a speech later but his Whip might not allow him.
The other example that the hon. Gentleman gave was
of a 16-year-old who, instead of doing his GCSEs, was
working an evening shift. That is a strange criticism of an
employment agency, and I suspect that the hon.
Gentleman may have fallen into the trap of finding an
example that had nothing to do with an employment
agency. Employment agencies are subject to additional
regulations that do not apply to ordinary employers. I
hope that he will give us some more examples.
In Hansard, we can read of the hon. Gentleman's
passion in suggesting that Corby is rife with terrible
events in the employment agency industry. We can also
read that the Minister of State pointed out that he had
ensured that the Department of Employment inspectors
as they used to be called, although I do not know which
Department they come under these days had gone to
Corby to check out the situation.
The Chairman: Order. May I counsel the hon.
Gentleman that he is making what I would term a clause
stand part speech. It might be sensible for him to outline
the background to the amendments if hon. Members want
a clause stand part debate when we have finished with
the amendments.
Mr. Bruce: I am grateful to you, Mr. Atkinson. I was
certainly going on too long, and I accept your advice.
The point that I was laboriously getting to was that,
under the Employment Agencies Act 1973, the Minister
of State could send an inspector directly into employment
agencies to find out what was occurring. When an
employer acted in the same way as an employment agency
and gave someone a temporary contract, the Minister of
State had no power to intervene.
The practice that concerns the hon. Member for
Corby reducing someone's wages to £1 an hour would
be outlawed under the minimum wage legislation.
Whatever penalty clause was in someone's contract, the
absolute minimum would be £3.20 or £3.60, depending
on that individual's age.
I am worried because the Bill legislates for the
problems that the hon. Gentleman mentioned, which I do
not think exist. If they do, they have been cured by
other legislation.
Mr. Boswell: Does my hon. Friend agree that
elsewhere in the Bill certain rights are attached to workers
who are associated with or working under employment
agencies? Those personal rights are therefore secured
under those provisions, so it might seem that further
regulations in that area are redundant.
Mr. Bruce: Indeed, I understand that to be the case.
It was extremely helpful of the Government to show in
the explanatory notes how the Bill will affect employment
agencies. The House decided to give special rights to
people who worked through employment agencies.
However, it decided not to intervene in the rights of the
employment agency or employment business two
different terms; I am sure that the Committee is
sufficiently knowledgeable of the difference except in
deciding how the employment agency and the employer
deal with the employee.
The 1973 Act contained a restricting clause. The
amendments to the Act proposed in clause 28 will result
in a completely new employment agency Act. On page 60
of the explanatory notes, which detail the existing
regulations, the restriction that will be excluded is as
follows:
"Provided that regulations under this section shall not make
provision for regulating or restricting the charging of fees to
employers by persons carrying on such agencies and businesses."
That restriction will be excluded from the 1973 Act, and
the Act will therefore be turned on its head. The Act will
now be able to regulate all the terms and conditions that
someone who wants to hire a temporary employee would
have negotiated with the company providing that
employee. That is dangerous.
When the Department of Trade and Industry originally
told us that it intended to change the regulations, the then
Secretary of State said that the issues that would be
covered included the:
"need to ensure proper standards on reference checking"
with which the clause emphatically does not deal the
"rules requiring agencies to pay workers promptly and fully"
with which the regulations do not deal but which is in fact
already covered by the Act and the
"obligation on agencies holding clients' money to safeguard it
properly"
with which, again, the clause does not deal, and which is
already covered by the Act.
It is extremely strange that the Bill should try to do
what is proposed. I have tried to understand what the
Government are trying to do.
Mr. Boswell: I am trying to do the impossible read
the draft regulations, and listen to my hon. Friend's
speech. I find his speech slightly more compelling than
the regulations.
Paragraph 6.5.32 of the consultation document on the
new regulations suggests that
"The Government believesthat a clarification of the basis upon
which temporary staff hire services are provided is necessary."
It suggests that temporary staff hire should normally be
conducted in future on an employment business, not an
agency, footing, thereby steering the basis of our entire
system of employment.
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