Future World of Work Committee

:00:00. > :00:11.Good morning everybody. Welcome to our committee. Just for the purposes

:00:12. > :00:16.of record, do you mind telling us who you are and which organisation

:00:17. > :00:23.you are representing? Starting with you, Tim. Tim Thomas, director of

:00:24. > :00:28.employment skills at the DEF, manufacturers organisation. I'm the

:00:29. > :00:35.secretary-general of the Unite union. I'm senior adviser resolution

:00:36. > :00:37.foundation. I am David Kamp, chief executive of the Association of

:00:38. > :00:42.labour providers. Thank you for attending. We are looking today at

:00:43. > :00:49.agency workers. Lindsay, may I start with you, and it will be open to

:00:50. > :00:54.all. Your evidence shows there are increasing numbers of people working

:00:55. > :01:01.as agency workers, both in terms of temporary work and permanent work.

:01:02. > :01:05.Could you give us an idea of how prevalent this is, and are there any

:01:06. > :01:11.particular sectors which are seeing a large rise in agency workers? Just

:01:12. > :01:15.a start, I want to point out that evidence today is based on the

:01:16. > :01:18.analysis of the labour Force survey last year and I think there are a

:01:19. > :01:22.couple of constraints with the source, first that not everybody in

:01:23. > :01:26.the workforce is asked the same question about being an agency

:01:27. > :01:30.worker so we have to construct the understanding from the data. The

:01:31. > :01:33.second point I want to make is that no one in the labour Force survey is

:01:34. > :01:38.asked whether you are a worker, you are asked if you are an employee or

:01:39. > :01:42.self-employed, so we have a problem in terms of understanding agency

:01:43. > :01:45.workers in that they do not map to the three legal categories of

:01:46. > :01:50.employment status, but what we saw in the research work we did looking

:01:51. > :01:53.at the labour Force survey is that we could identify three types of

:01:54. > :01:58.agency workers, and the first are those that say they are temporarily

:01:59. > :02:03.and they work for an agency which I think is who we broadly accept our

:02:04. > :02:08.agency workers. The second group are those who perplexingly tell as they

:02:09. > :02:11.are permanently employed are also agency workers. There is a big

:02:12. > :02:15.question about who these people are, and it's quite a sizeable body of

:02:16. > :02:18.people. There are more people in the labour Force survey who say they are

:02:19. > :02:23.permanently employed agency workers than temporary workers. We have some

:02:24. > :02:27.constraints on the understanding of that group because the question that

:02:28. > :02:31.informs us about that presence in the labour market only came online

:02:32. > :02:35.in 2011. And it came online because it is linked to the fact that that

:02:36. > :02:39.was the point of course when agency worker regulations were activated

:02:40. > :02:44.and that was the point when it was possible for an agency worker to go

:02:45. > :02:47.on to a Swedish derogation contract and be paid between assignments and

:02:48. > :02:52.have employment status. So there is a sort of presumption that this

:02:53. > :02:58.group of permanent agency workers in the workforce, which is significant,

:02:59. > :03:02.came through the process of Swedish derogation, but when we look at the

:03:03. > :03:06.data it is clear that there is something is going on. We think that

:03:07. > :03:09.probably some of these people are unpaid between assignment contracts

:03:10. > :03:13.but we don't think there has been sufficient substitution in the data

:03:14. > :03:18.to allow us to think that that explains the whole of this group. So

:03:19. > :03:21.that is definitely a significant group in the population, and

:03:22. > :03:26.expanding group in the labour force, but I don't have a kind of full and

:03:27. > :03:30.complete answer as to who they are and we can speculate that they are

:03:31. > :03:33.people who are agency workers but who are in long-term assignments, so

:03:34. > :03:39.from their perspective it looks like a permanent job.

:03:40. > :03:46.The third category we noted was not hugely significant. But important

:03:47. > :03:53.for the committee to consider is a group of people in the data who

:03:54. > :03:58.indicate they are self employed and then to indicate they are paid by an

:03:59. > :04:04.agency and not administering tax and insurance. That is legally a

:04:05. > :04:09.conundrum. You cannot be self employed and an agency worker but

:04:10. > :04:14.there is a group of people that fall into the category. It is important

:04:15. > :04:19.to note that after the research there were many members of the

:04:20. > :04:23.public approaching us to say we have touched a nerve and almost without

:04:24. > :04:28.exception they were people who were saying that they were self employed

:04:29. > :04:35.and agency workers. What proportion of the categories

:04:36. > :04:44.would the agency workers be? 340,000 people in temporary agency work.

:04:45. > :04:51.440,000 permanent agency work e and 66,000 believe they are self

:04:52. > :04:57.employed and agency workers. So adding up to 3% of the labour force.

:04:58. > :05:04.I mentioned in terms of particular sectors that are receptive to agency

:05:05. > :05:12.work, we have looked at logistics, warehousing, in terms of the online

:05:13. > :05:16.forum I have been shocked by how many public sector careworkers are

:05:17. > :05:25.facing agency work but can you give us an idea of which sectors use the

:05:26. > :05:30.agency work? Four sect orrors stood out, they were manufacturing,

:05:31. > :05:36.transport and warehousing, business activities, all kinds of IT

:05:37. > :05:44.consultancy service and the public sector. They are not all low end.

:05:45. > :05:51.One of the findings is that high workers are highly adredge news now.

:05:52. > :05:55.They bring much to the economy. What are the drivers seeing in

:05:56. > :06:00.respect of the drives of agency work? Why is manufacturing using

:06:01. > :06:05.more and more agency workers is it for the flexibility? I'm not sure we

:06:06. > :06:12.are using more, if you look at the growth of those employed in the UK,

:06:13. > :06:18.I will use the term workers but I use it flexible but people in work

:06:19. > :06:23.in the UK, we are shy of 30 million. If you track it through those

:06:24. > :06:29.employed, the graph shows a level track between the total numbers of

:06:30. > :06:32.employed and those in work. So not necessarily accepting an increased

:06:33. > :06:36.number of agency workers but increased number of workers in the

:06:37. > :06:41.UK, therefore the agency workers have increased in number. In terms

:06:42. > :06:47.of manufacturing it is not Reevenly spread. It is certainly automative,

:06:48. > :06:53.aerospace, where agency workers are used more. In terms of why the

:06:54. > :06:59.members use agency, it is a source of recruitment, so you take an

:07:00. > :07:04.agency later on, and later they become a permanent employee. The

:07:05. > :07:09.other is for variations in demand. Demand is unfortunately not

:07:10. > :07:12.predictable at the moment. In manufacturing demand and output is

:07:13. > :07:17.increasing, which is good news but it could be you want workers for a

:07:18. > :07:22.period of time before you see that the demand is permanent. So there

:07:23. > :07:24.are fluctuations in demand. The third I highlight is specialist

:07:25. > :07:31.skills within the manufacturing sector. We have a crushing need for

:07:32. > :07:38.more skilled workers, for higher skills and skills that the labour

:07:39. > :07:42.market can provide. Agencies provide access to the various skills at

:07:43. > :07:46.times. Before I hand to Steve, in our

:07:47. > :07:51.sector, whether using an employment agency you are paying a premium. You

:07:52. > :07:57.are paying whatever the agency is charging for the worker plus the

:07:58. > :08:02.agency fee. Two ways of showing practical examples of that are at

:08:03. > :08:06.the time of pensions auto enrolment, some of the agencies pass that on to

:08:07. > :08:11.the members so there is the cost of the member, the agency cost, the

:08:12. > :08:16.auto enrolment cost and with the levy, many members are paying the

:08:17. > :08:20.levy cost for the agency. So not a financial incentive to use the

:08:21. > :08:24.agency workers but more what I outlined.

:08:25. > :08:31.That is not my perception, you give a tale of high value, a premium

:08:32. > :08:36.product, my sense, when we have looked at particular companies,

:08:37. > :08:40.downward pressure on terms and conditions, virtual exploitation of

:08:41. > :08:44.the workforce, that is where agency work tends to be. You don't find

:08:45. > :08:51.that in manufacturing? Not in our sector. Not least because usually it

:08:52. > :08:56.is individuals and workers, in many case, not all, that have a better

:08:57. > :09:01.bargaining position as we have short of highly skilled workers.

:09:02. > :09:07.David? Yes, please, in the association of labour providers we

:09:08. > :09:13.mainly have a membership of those organisations that supply workers

:09:14. > :09:18.into the consumer goods supply chain so into the logistics and warehouse

:09:19. > :09:25.functions and consumer manufacturing and agriculture and historical. It

:09:26. > :09:32.is a sector in food manufacturing and agriculture which our members

:09:33. > :09:38.are required to be licensed by the gangmasters licensing authority,

:09:39. > :09:43.soon to become the gangmasters and abuse authority, so an additional

:09:44. > :09:48.sector, so in that sector our members and labour providers are the

:09:49. > :09:55.most compliant in any sector throughout the UK. I would support

:09:56. > :10:00.Tim as to why businesses use labour providers and recruitment agencies,

:10:01. > :10:07.mainly, it is because they are a labour sourcing experts, as they

:10:08. > :10:12.enable flexibility, they enable businesses to use only the exact

:10:13. > :10:19.amount of workers that they need each and every shift. So it enables

:10:20. > :10:25.them to control their labour costs. And it's the try before you buy

:10:26. > :10:29.service, the route into permanent employment, temple to perm as it is

:10:30. > :10:34.known in the business, it is the most common way to recruit your

:10:35. > :10:42.workforce. So an assessment of how the individual performs in the role.

:10:43. > :10:46.In terms of that, David, how do you reconcile with opening comments from

:10:47. > :10:52.Lindsay Judge it is not a testimony to permanent, that a lot of people

:10:53. > :10:58.are permanent agency workers? They are, two main reasons for that, one

:10:59. > :11:02.is because of the Swedish derogation, which is a permanent

:11:03. > :11:11.contract employment, that is what it is required in the legislation. The

:11:12. > :11:17.second point is the use of intermediary umbrella organisations,

:11:18. > :11:22.who are interposed in the relationship between recruitment

:11:23. > :11:27.businesses and the workers and they require the individuals to be on an

:11:28. > :11:33.employment contract to deliver that service. There are also a number of

:11:34. > :11:39.agencies who choose to have their workers on a contract of employment,

:11:40. > :11:48.rather than a contract for services. I preamble into the point I wanted

:11:49. > :11:55.to make, I, the piece supports responsible recruitment and good

:11:56. > :11:59.practice in recruitment. We rank agencies into four categories:

:12:00. > :12:03.Criminal, those who pay significantly below the minimum wage

:12:04. > :12:09.and there are many indications of the forced labour in the way that

:12:10. > :12:17.they operate. Dodgy, those who seek to minimise costs at all levels by

:12:18. > :12:23.underpaying holiday, not paying SDLP P, opting out of personal accident

:12:24. > :12:27.insurance schemes, and so on. Compliant, the businesses that seek

:12:28. > :12:32.to comply with the lead, and leading, those that comply with the

:12:33. > :12:35.law, have respect for workers and aim to introduce good practice

:12:36. > :12:40.throughout. That is helpful. How many companies

:12:41. > :12:52.and what ratio are criminal and dodgy? I don't have a figure... Give

:12:53. > :12:56.us flavour? Well, the... No. I think is the honest answer.

:12:57. > :13:05.The criminal ones work in the shadows. Yeah, they work in sectors

:13:06. > :13:11.where it's very hard to uncover them. The G LA in the sector that

:13:12. > :13:15.they are in, uncovers individuals from time to time. Once they have

:13:16. > :13:20.powers to move into other sentors, perhaps we will see more. There is

:13:21. > :13:27.no-one enforcing at the moment, so it is hard to give a number. In the

:13:28. > :13:34.GLA sector, the number of businesses who have had their licences revoked

:13:35. > :13:39.by the GLA has declined year or year. Outside of the sector there is

:13:40. > :13:47.no classification of it. At the moment there is not a way to define

:13:48. > :13:52.and to assess who is compliant and who is leading because in essence

:13:53. > :13:56.there is little enforcement. I don't understand, you came up with

:13:57. > :14:00.a clear rating system. I got the impression you rated companies. But

:14:01. > :14:05.you are now telling us you can't tell us who is compliant and who is

:14:06. > :14:10.not? Who is dodgy, who is not? Is there any idea in terms of the

:14:11. > :14:15.proportion of companies, providing agency workers who are dodgy? Not

:14:16. > :14:20.that I think would be correct for me to put on record.

:14:21. > :14:26.OK. Steve, presumably you do have... And we do! But in terms of respect

:14:27. > :14:33.before I ask you to discuss this, that I received a financial donation

:14:34. > :14:37.from the United Union in respect of my 2015 general election campaign.

:14:38. > :14:42.Thank you. Perhaps we come into contact with the criminal and the

:14:43. > :14:48.dodgy, I don't know. But there are a number of antibiotics that work at

:14:49. > :14:52.the lower end of the market and are purely used for exploitative

:14:53. > :14:56.purposes. Outside of competent and professional agencies that provide

:14:57. > :15:05.labour has Tim has identified in core sectors of the economy. Where

:15:06. > :15:14.he identified aerosparks and auto motive, the common denominator is

:15:15. > :15:21.the unionised factor. And here the direct impact that the agency has

:15:22. > :15:27.with the client. So we are not seeing that sector in the highly

:15:28. > :15:35.uniononised. In respect of aerospace and auto

:15:36. > :15:39.motive, there may be agency for the specialised one-off commission but

:15:40. > :15:44.there are permanent full time employees well trained and often

:15:45. > :15:50.members of the union? This was my question to Tim on this issue, you

:15:51. > :15:56.talk about unpredebilityability of manufacturing at the moment but you

:15:57. > :16:02.also spoke about specialist skills. You gave me a feeling that was like

:16:03. > :16:08.50/50. But the specialist skills must be small as a segment. Also,

:16:09. > :16:13.specialist skills, are these people not taken on as self employed basis

:16:14. > :16:20.rather than as agency workers? Yes to the first. So smaller numbers of

:16:21. > :16:25.specialist skills, a greater number of craft technicians, those types of

:16:26. > :16:31.skills. In terms of how the person is taken on, that is not necessarily

:16:32. > :16:35.always known to the engaging company, ie, the employer. I use the

:16:36. > :16:40.term vaguely, you could be taxpayering with a company who is an

:16:41. > :16:46.agency but not see beyond that. So see a company you are contracting

:16:47. > :16:49.with. One of our larger members uses up to 30 agencies for different

:16:50. > :16:55.skills. Clearly they are a multinational company. However they

:16:56. > :16:59.would not know that the person was employed, or self employed or work

:17:00. > :17:04.in a service provision company. So the honest answer is we don't always

:17:05. > :17:10.know. We can guess about it, it is likely that someone that highly

:17:11. > :17:14.skilled is probably self employed and at a lower skill level employed

:17:15. > :17:18.by the agency but the honest answer is that the employer probably does

:17:19. > :17:23.not know in all cases. Steve, we are trying to get a

:17:24. > :17:26.flavour of the rise of agency workers and to the extent agency

:17:27. > :17:32.workers are subject to being employed by dodgy companies, can you

:17:33. > :17:38.give a flavour of that? This group I was talking about.

:17:39. > :17:42.It is not you! They are a small proproportion of agencies that work

:17:43. > :17:49.in the sector and we are a broad union that covers much in the

:17:50. > :17:53.economy, our estimate of the use of satisfaction probably the 1.6

:17:54. > :17:58.million. There is an underground economy that employs... Where do you

:17:59. > :18:03.get the figure from? That is our work in the sectors that we operate

:18:04. > :18:10.in the trade union where we come across a series of different forms

:18:11. > :18:16.of exploitation, direct agency, casual, full self employment, via an

:18:17. > :18:20.agency, or whether they are accountable to an algorithm.where a

:18:21. > :18:25.computer is telling them that they are not as productive as 80% of

:18:26. > :18:29.their work colleagues and they will not get work anymore but they cannot

:18:30. > :18:36.negotiate with a computer, that is from a smartphone. These are our

:18:37. > :18:41.experiences to agency employment. We reckon about 1.6 million. Down the

:18:42. > :18:44.supply chain, there is abject exploitation. In all sectors of the

:18:45. > :18:59.economy we see that... You estimate, if I drive for Uber

:19:00. > :19:06.and my part of your 1.6 million? No, we say you are an employee of Uber.

:19:07. > :19:11.Bit if I am a casual work on an online platform I am part of that

:19:12. > :19:16.1.6 million. Agency there is and eat media Greek, but are you equating a

:19:17. > :19:24.platform to an agency? Years, the platform becomes the intermediary.

:19:25. > :19:26.Absolutely. -- there is an intermediary. We need to give

:19:27. > :19:31.ourselves abreast of the modern platforms. Our experiences in

:19:32. > :19:37.construction, self-employment is rough, retail and care as you have

:19:38. > :19:41.identified. In hospitality, manufacturing and vindication,

:19:42. > :19:44.warehousing, logistics, distribution, food and agriculture.

:19:45. > :19:49.As has already been identified. And of course in education, health and

:19:50. > :19:54.professional services, in the public sector as well as the private

:19:55. > :19:57.sector. This is now right, it is a business model choice for many

:19:58. > :20:01.employers that want to reduce costs and their responsibilities for

:20:02. > :20:06.employees. They do not see the employee has been caught their

:20:07. > :20:12.business. They see as being a subsidiary, Griffey to their

:20:13. > :20:18.business. Perhaps a third party, a third-party logistics provider

:20:19. > :20:21.employees and direct that Labour. Are you including the NHS? One of

:20:22. > :20:30.the big issues there has been and locum doctors, highly specialised

:20:31. > :20:35.charging very high rates to the NHS. I'll be included in the 1.6 million?

:20:36. > :20:42.They are probably self-employed as opposed to coming in via an agency.

:20:43. > :20:49.There are a variety of reasons why legitimately perhaps companies might

:20:50. > :20:55.want to use agency level, we recognise peaks and troughs and

:20:56. > :21:01.seasonal work. So NHS trusts said to me that the reverse is true, they

:21:02. > :21:04.are being exploited. Effectively they are being held to ransom

:21:05. > :21:11.because they are having to pay more for cover. Because they do not train

:21:12. > :21:16.enough professional staff that they need in order to operate an

:21:17. > :21:24.effective NHS. There is a choice. There is a choice particularly... I

:21:25. > :21:34.wanted to add that when we looked at the data on the and we could compare

:21:35. > :21:39.a similar worker who was an employee and one with an agency, there was a

:21:40. > :21:45.paid penalty of 22p per hour but when we looked at the income

:21:46. > :21:50.distribution those in lower paid jobs were suffering a bigger pay

:21:51. > :21:55.penalties than those further up the income distribution so even the data

:21:56. > :21:58.is speaking to the point that this is a heterogenous group of people

:21:59. > :22:01.and there are certainly some agency workers who are doing quite well,

:22:02. > :22:06.thank you very much and others clearly are not. That is very

:22:07. > :22:14.helpful. Amanda? I have a question to follow on. First of all you were

:22:15. > :22:18.talking about your criminology or dodgy, and different types of

:22:19. > :22:28.aliases, how do employees choose? Do they actively choose somebody that

:22:29. > :22:31.fits the employer? There were two others as well, compliant and

:22:32. > :22:40.leaving. Certainly within this sector that we represent there were

:22:41. > :22:48.two factors that businesses used to take into account. The key factors

:22:49. > :22:57.were price and ability to fulfil and supply. Certainly within the sector

:22:58. > :23:02.we work in, compliance, and the ability to demonstrate you will not

:23:03. > :23:07.bring your customer's reputation into any damage has become the key

:23:08. > :23:14.part of the selection process. So there are a number of processes and

:23:15. > :23:20.due diligence processes that in this sector that is regulated by the gang

:23:21. > :23:26.masters licensing authority businesses will go through to make

:23:27. > :23:32.sure that businesses are compliant first being dusted have the gang

:23:33. > :23:38.masters licence? Bell so does that mean that the dodgy agencies your

:23:39. > :23:41.document will I default bypass this? They will move into other sectors

:23:42. > :23:48.where there is not enforcement. Outside of the GLA sector pretty

:23:49. > :23:55.much an almost absence of enforcement in the UK. That goes to

:23:56. > :24:01.the heart of previous evidence given in relation to sports direct and

:24:02. > :24:04.trans-line that but then appeared in a different sector. I understand

:24:05. > :24:11.your hearing evidence from them later. This is a business model.

:24:12. > :24:21.This is a business model, it is a method of choice across all sectors

:24:22. > :24:27.of the economy. I can see the benefit for the client and for the

:24:28. > :24:33.agency in terms of their own profitability and their ability to

:24:34. > :24:40.make a profit but I struggle to see the benefit for ordinary people

:24:41. > :24:49.working for agencies. They could get a job. He gave a number of good

:24:50. > :24:56.positive reasons for an employee and employer to benefit. I do not meet

:24:57. > :25:01.many employers that see the benefit. I don't mean to them and I do not

:25:02. > :25:06.fall to them when I go out and speak to them. I do not get non-exploited

:25:07. > :25:11.employees come to talk to me about the way they are treated by an

:25:12. > :25:15.agency and they are debarred from enforcing their employment rights

:25:16. > :25:20.very often because their employment is on short hours or zero hours. And

:25:21. > :25:25.we need agreements to govern and now they have employment tribunal fees

:25:26. > :25:31.that are often more expensive than the claim they try to benefit from.

:25:32. > :25:35.Doesn't always equal explanation? Not all of them but that the

:25:36. > :25:41.majority are employed by clients to reduce costs. If you take out the

:25:42. > :25:48.agencies profit margin and you take out the reduced cost to the employer

:25:49. > :25:54.by default the cost saving comes onto the employee and the employee

:25:55. > :26:04.then suffers, being employed on very short-term flexible contracts

:26:05. > :26:06.including zero hours. Not the sole experience of sports direct and the

:26:07. > :26:24.366 minimum contract. Just want to follow up. Slightly

:26:25. > :26:27.different perspective. I was interested because you are only

:26:28. > :26:33.going to be seeing a certain type of agency employee. So in a way that is

:26:34. > :26:39.not the full spectrum you would acknowledge. We deal with very

:26:40. > :26:47.highly skilled employees, in finance, manufacturing and

:26:48. > :26:53.engineering. Very highly skilled and sought-after. We recognise that and

:26:54. > :26:57.we recognise the demand for those. We have in this country for the

:26:58. > :27:02.first time in my life as close to full employment as I have ever seen.

:27:03. > :27:07.The issue that we have this not one of workers having no choice we have

:27:08. > :27:14.one where the biggest issue that faces our sector is we cannot find

:27:15. > :27:19.enough workers. There is choice. Workers are not bound to work for

:27:20. > :27:26.one particular agency. They are able to leave and work somewhere else.

:27:27. > :27:31.Agencies known nowadays and this is a response, yes I agree to supply

:27:32. > :27:36.and demand, that they have if they want to, to hold onto their workers,

:27:37. > :27:42.if they want to demonstrate the clients that they have reliability

:27:43. > :27:48.of workers, then they have to treat these workers well. Yes I agree this

:27:49. > :27:57.has been a learning experience but that is what we are seeing now. It

:27:58. > :28:02.is not the situation that seems to be being put forward that every

:28:03. > :28:09.agencies out to exploit their workers. They would not continue in

:28:10. > :28:15.business. Just to go back to the original point, in terms of why

:28:16. > :28:20.people use agencies, I have heard you say it was like the business

:28:21. > :28:27.model, what you're saying is it is not actually less cost, it actually

:28:28. > :28:33.business sense. Absolutely. The money to pay workers, national

:28:34. > :28:41.insurance, basic pay, holiday pay, sick pay, and the apprenticeship

:28:42. > :28:46.levy now, that can only be charged to the client. It doesn't magically

:28:47. > :28:51.come from anywhere else. That is a cost that has to be passed on to the

:28:52. > :28:56.client, and on operating costs can sometimes goodness forbid a little

:28:57. > :29:01.bit of profit as well. That is a cost venues to be passed on to the

:29:02. > :29:05.client. The client makes the decision to use an agency, because

:29:06. > :29:15.it brings them a business benefit. If it didn't they wouldn't. Any

:29:16. > :29:18.other comments on that? Reuse agencies to stick the blindingly

:29:19. > :29:23.obvious because we need people. In my experience there is no financial

:29:24. > :29:31.incentive. It actually costs more because the one costs are paid by

:29:32. > :29:37.the end user, the client, plus a margin. That is why we use agency

:29:38. > :29:42.workers, this is not a zero-sum game. The idea that somehow agency

:29:43. > :29:45.is all that is quite clearly incorrect. I would not sit there for

:29:46. > :29:50.a moment and safe it is all fine, clearly there is malpractice, Steve

:29:51. > :29:55.have indicated that but it is a bit like saying the dentist, are all

:29:56. > :30:00.teeth rot and pretty much he only sees rotten teeth because he is a

:30:01. > :30:05.dentist. But from my perspective, agency costs are increasing, not

:30:06. > :30:09.decreasing and if we didn't have agency workers what would be the

:30:10. > :30:13.result? It's not necessarily that we would employ more people, as David

:30:14. > :30:18.said, in our sector actually the result is business Michael Gove

:30:19. > :30:27.somewhere else. That broadly means the EU. I cannot speak from direct

:30:28. > :30:32.experience but with another piece of research on the table, done by the

:30:33. > :30:35.National Institute of economic and social data, who looks at the

:30:36. > :30:39.presence of agency workers in the workplace and they point out the

:30:40. > :30:46.fact that when you have agency workers in the workplace you tend to

:30:47. > :30:48.have an unhappy employee population. I completely accept what others were

:30:49. > :30:56.saying about the reasons firms are using agency workers, around demand

:30:57. > :31:03.fluctuations and managing costs possibly not having the hassle, but

:31:04. > :31:08.clearly there is a disciplinary element in some cases. What this

:31:09. > :31:12.research was showing is that having agency workers present was

:31:13. > :31:16.unsettling for agency workers but also for employees who for whatever

:31:17. > :31:23.reason may be because they felt that was the way their work was going.

:31:24. > :31:29.That is interesting, people felt unhappy working next to agency

:31:30. > :31:39.workers. An agency worker presumably chooses to be an agency worker? That

:31:40. > :31:44.is an interesting question. Others have made this point around choice.

:31:45. > :31:48.One of the things we showed is that we could not see a lot of regional

:31:49. > :31:53.variations in the data but that is because we were looking at the

:31:54. > :31:56.constrictions of the data only at the very highest level, Wales or the

:31:57. > :32:00.north-east but one of the things we know from talking to people and

:32:01. > :32:04.other research is that you get very strong concentrations of agency

:32:05. > :32:13.workers in particular local economies. If you cannot move very

:32:14. > :32:15.far for whatever reason like children particular set of

:32:16. > :32:19.constraints then maybe your choice is quite restricted. If there are

:32:20. > :32:23.local economies that are quite mono industry focused then do you have a

:32:24. > :32:30.choice? I am not sure you necessarily do. Is there any

:32:31. > :32:39.evidence of agency is treating workers unfairly? To repeat what

:32:40. > :32:41.Steve said many of our members are heavily unionised, collective

:32:42. > :32:47.agreement with the agreement of the trade union, it is difficult to say

:32:48. > :32:54.that as an example of where agency workers are in any way being

:32:55. > :32:56.exploited. So just for clarification, whether businesses

:32:57. > :33:03.are treating agency workers differently. The employment agency?

:33:04. > :33:08.Are the businesses treating the agency employees differently? Do

:33:09. > :33:19.they feel as if they are treated differently? My experience is not in

:33:20. > :33:26.our sector. There are some businesses who don't treat agency

:33:27. > :33:31.workers as they would their own. The agency worker regulations that came

:33:32. > :33:36.in in 2012 sought to rebalance that. I see no particular reason why an

:33:37. > :33:40.agency worker should be discriminated against solely on the

:33:41. > :33:53.reason that they are an agency worker.

:33:54. > :34:03.I ask the inquiry to look at that protection but certainly there are

:34:04. > :34:07.legal ways with the Swedish derogation whereby two workers

:34:08. > :34:11.working next to each other, doing equal work of equal value can be

:34:12. > :34:15.paid a different rate for the same job.

:34:16. > :34:21.Can I ask, and maybe, Steve, will want to respond to this. And I will

:34:22. > :34:29.bring Anna in. We have had an online forum to encourage people to give

:34:30. > :34:34.their experience, good and bad. We had somebody called Shaun who wrote

:34:35. > :34:39.to us: I work at an agency and trying to ascertain why we don't

:34:40. > :34:46.receive the rights and parity after working in a particular role for

:34:47. > :34:51.more than 13 weeks. Agency workers have inadequate protection from

:34:52. > :34:56.mistreatment and no defence against union-busting tactics. This prevents

:34:57. > :34:59.workers pushing for fulfilment of their rights or improvements in

:35:00. > :35:04.their terms and conditions of employment.

:35:05. > :35:13.So, there are many good points in that. Firstly, we need to make

:35:14. > :35:20.workers rights more clearly understood. More simple. So let's

:35:21. > :35:26.bring Lord De in, ning up-to-date, so that the man in the uber taxi

:35:27. > :35:35.knows a what rights he is entitled to. So they know their rights get

:35:36. > :35:38.advice. How can they get advice? We have something called ACAS, let's

:35:39. > :35:44.turn that into the employment helpline and publish it, as people

:35:45. > :35:48.don't know what it means. Do workers have access to kennel diwithout

:35:49. > :35:53.going to tribunal? I don't see it, so how can workers get something

:35:54. > :36:00.corrected? And who can they go to? There are lots. And are these rights

:36:01. > :36:04.enforced? No, so these are all things within the realm of

:36:05. > :36:08.government, these are not within the realm of business but within the

:36:09. > :36:13.realm of government and within the realm of this inquiry to make some

:36:14. > :36:17.great improvements in how we manage this issue in this country. Thank

:36:18. > :36:25.you. Any other comments before I bring Anna in? I wanted to make the

:36:26. > :36:29.point, we see this often as being a direct job replacement mechanism.

:36:30. > :36:33.That's the reality on the ground for ordinary working people who are

:36:34. > :36:37.surrounded often by agency workers and casual workers and others that

:36:38. > :36:41.the employer has brought in at worse terms and conditions than the direct

:36:42. > :36:45.workforce. So seeing themselves in a fearful and a vulnerable position as

:36:46. > :36:51.being the next group to be outsourced to an agency. It's the

:36:52. > :36:58.switch, really, between direct and indirect employment it would be the

:36:59. > :37:05.case there would be 9095% direct employ years with the 5 to 10%

:37:06. > :37:14.fluctuation via agency. That has switched to many sector of the

:37:15. > :37:19.economy, so now some pleasures have a 90% agency and a 10% core. There

:37:20. > :37:25.is a reason, why? It is cheaper. That is our argument and experience.

:37:26. > :37:31.The agency workers will directly employ and excerpt the Swedish

:37:32. > :37:35.derogation, which allows them to pay the minimum wage as opposed to the

:37:36. > :37:46.rate for the job with the colleagues that they work alongside. Statutory

:37:47. > :37:49.minimum holiday entitlement, not paying the correct pension

:37:50. > :37:55.entitlement so, the control is in the hands of the agency employer and

:37:56. > :38:05.the supervisor on the ground who does not have to go through due

:38:06. > :38:09.process or appeals process or union recognition, simply not providing

:38:10. > :38:15.more hours for the employie, and therefore they become unemployed.

:38:16. > :38:20.Anna? In terms of cost, do you have a break down of what it costs to

:38:21. > :38:24.employ. The differences between employing somebody though an agency.

:38:25. > :38:33.You say it is cheaper but what is the reality in terms of cost? We

:38:34. > :38:36.have experiences of in excess of ?5 pound between agency and direct

:38:37. > :38:42.employees. The cost to the business? Often

:38:43. > :38:48.these are confident shall employer-client agreements. But we

:38:49. > :38:53.can ascertain a good estimate as to the cost savings to the employer and

:38:54. > :38:58.the employer on the savings National Insurance contribution. A little

:38:59. > :39:04.spoken about scam in the employer's market where you employ people at a

:39:05. > :39:12.decent rate for low hours to keep them under the National Insurance

:39:13. > :39:17.threshold or pay them for a 38 hour week but at a low threshold. So they

:39:18. > :39:22.are not paying National Insurance, so that pushes them outside of

:39:23. > :39:30.benefits. But the employer is not playing the employer's national

:39:31. > :39:34.insurance contribution. Which at 17.813.8% is a sizeable cost.

:39:35. > :39:38.That is an unfair competitive advantage that they find themselves

:39:39. > :39:44.in against the responsible employers who want to directly employ, to

:39:45. > :39:50.train young people in proper apprenticeships, who want to offer

:39:51. > :39:54.decent terms and conditions and who recognise Yoons. And then are

:39:55. > :40:00.undercut by a fly by night employer who wants to employ at the least

:40:01. > :40:02.possible cost at the biggest cost to the employie, the worker at the end

:40:03. > :40:10.of the day. Anna? Thank you, Chair. I was going

:40:11. > :40:14.to point out what you said. My experience in my questions is that

:40:15. > :40:18.this is not a choice for them in the employment market. This is that all

:40:19. > :40:23.is available. They are forced to take the contracts that are less

:40:24. > :40:28.well paid, insecure, no control over the hours and this is increasingly

:40:29. > :40:32.the nature. I don't recognise the comment made that we are almost at

:40:33. > :40:36.full employment. In an area like mine, there is high unemployment.

:40:37. > :40:41.People are des rate to get work. It is a race to the bottom. The point

:40:42. > :40:45.to ask, that we have not spoken about is the impact on people

:40:46. > :40:49.working in agency work. How do people, there has been a discussion

:40:50. > :40:53.as though it is a choice for people to understake this work but how do

:40:54. > :40:58.people get out of it? What is the route out for people? What is the

:40:59. > :41:02.impact of being an agency work on financial and social inclusion, the

:41:03. > :41:09.impact on skills and career development? Can you say something

:41:10. > :41:13.about that? It has a huge impact on a person's social and family life,

:41:14. > :41:19.and financial well being, the amount of hours you work, the money you are

:41:20. > :41:24.paid for the hours, it is a direct impact, to pay the bills, rent,

:41:25. > :41:30.phone bill or putting clothes on the backs of your children and putting

:41:31. > :41:34.food on the table. We see example of inwork poverty, suffering from

:41:35. > :41:39.inwork poverty. Not doing 30 or 20 hours and perhaps could do more, as

:41:40. > :41:44.state would like you to believe as the threat of sanction as you are

:41:45. > :41:49.not working hard enough to work harder but this is the reality,

:41:50. > :41:54.there is no choice. The only access into work is a vulnerable insecure,

:41:55. > :41:59.low paid, often minimum wage job with complete power and control in

:42:00. > :42:03.the hands of the employer. Often on zero-hours. You don't know if you

:42:04. > :42:09.are working tomorrow, let alone next week. We have examples of people

:42:10. > :42:15.working to a smartphone, advised there is placement for 50 workers

:42:16. > :42:21.tomorrow, the first 50 to respond at 11.00pm may get the job. 25 turning

:42:22. > :42:28.up to be told then, they only needed 25. To keep an eye on the phone.

:42:29. > :42:32.They are not paid for the travel time, inconvenience and they are not

:42:33. > :42:36.paid for the work for the day. That is our example of modern day

:42:37. > :42:43.practices. And that end of the market is growing. It is covering

:42:44. > :42:49.all sectors of our economy. And can I ask, how can you sort the benefits

:42:50. > :42:59.of this? We work at that end of the market. I can honestly say that

:43:00. > :43:06.around the country it's probably about 90%, 90 to 95% migrant workers

:43:07. > :43:11.who fill these roles. So this picture of high unemployment levels

:43:12. > :43:19.and local workers coming into agencies is not something that I

:43:20. > :43:26.recognise. So... The construction industry in particular? It may be as

:43:27. > :43:31.my focus is historical and food manufacturing so, it may be

:43:32. > :43:39.different. I can't claim to know other sectors but what I would say

:43:40. > :43:48.is that it's, business is hugely competitive and to run your business

:43:49. > :43:54.on the figures that we are hearing of 90% temporary workers, it isn't

:43:55. > :44:00.anything that I see. Businesses make decisions about how can they run

:44:01. > :44:06.their businesses as efishently as possible? How can they run

:44:07. > :44:11.effectively as possible? How do they improve productivity? That requires

:44:12. > :44:21.to having a core workforce that you can invest in, that you can build

:44:22. > :44:25.in, that you can rely on and using a proportion of agency workers to meet

:44:26. > :44:29.the flexible requirements that you need to manage your business costs.

:44:30. > :44:35.Have you ever met anyone whose aspiration in life is to be an

:44:36. > :44:41.agency worker? But I have met many people for whom it is a ready and

:44:42. > :44:46.accessible route into work. You can come into this country, you can go

:44:47. > :44:53.into an agency and you can be working in two day's time. And you

:44:54. > :44:59.are earning money. You are accruing holidays from day one, you are paid

:45:00. > :45:09.properly and it gives you that initial core stability to make the

:45:10. > :45:14.next transition in your life. Market forces are such that we have a

:45:15. > :45:19.labour shortage. I accept in certainas of the country that's not

:45:20. > :45:24.yet the situation. I can understand about Teesside. What we are seeing

:45:25. > :45:30.is certain businesses actually wanting to secure their workforces

:45:31. > :45:34.for the future in these changing times and to make sure that they

:45:35. > :45:41.absolutely have a workforce to see them through the next year, the next

:45:42. > :45:46.two years. That's how the market adapts to changing circumstances.

:45:47. > :45:49.Can I ask, Tim, then, from a manufacturing point of view... What

:45:50. > :45:54.can we do about this, the first question. The answer to that is

:45:55. > :45:59.training. So in the north-east, our members are short of engineering

:46:00. > :46:04.skills as any part of the UK. I know our members in the north-east trade.

:46:05. > :46:09.One member opened a new apprentice training skill. Are they agencies?

:46:10. > :46:14.No, they are members, employers. So my answer to what to do about that,

:46:15. > :46:24.I accept what you are saying, there is a route into a different form of

:46:25. > :46:28.work, offering 75% of members apprenticeships it costs our members

:46:29. > :46:34.?100,000 to train an apprentice but it is a route to not just a job but

:46:35. > :46:41.a career. So in terms of what we can do, the answer is train, skills,

:46:42. > :46:46.higher skills, a better paid job. Surely agency working is the

:46:47. > :46:49.antithesis to that, there is not vichlt in skills, the longevity.

:46:50. > :46:55.Surely agency working is working against that? There are two points,

:46:56. > :47:00.one, the point that David made, that our members see that experience.

:47:01. > :47:04.Someone arriving in the UK, you do a right to work check, they could be

:47:05. > :47:09.working within days. I accept that point. But it depends on what your

:47:10. > :47:13.work is. If our members take on someone at an employment agency,

:47:14. > :47:17.they will often recruit them. If they want to do an apprenticeship

:47:18. > :47:20.they will pay for it. There is a route into better paid higher

:47:21. > :47:26.skilled work through employment agencies. It will depend on the work

:47:27. > :47:31.you are doing. I accept, the point behind the question, if you do some

:47:32. > :47:37.work for an employment agency, you are stuck in a tumble-dryer going

:47:38. > :47:43.around. Other work via an agency, it is a route to skilled work. And

:47:44. > :47:49.something close to my heart, umbrella companies, I wonder if

:47:50. > :47:55.those on the panel would like to say something about umbrella companies,

:47:56. > :47:59.how they are used, the impact on the competition and the impact on those

:48:00. > :48:03.who are losing with this establishment? It is difficult for

:48:04. > :48:08.our members to have good visibility of the use of em-Birminghama

:48:09. > :48:14.companies. A often you use an agency, a company, seeing what is

:48:15. > :48:19.behind it is not always observe. It could be annum blessial consider or

:48:20. > :48:26.a service provision company but not always see it as an employer. So a

:48:27. > :48:31.lack of clarity creates an environment where companies are

:48:32. > :48:39.flourishing, creaming money out of people's pockets. I have seen people

:48:40. > :48:43.coming to my surgeries, where they are losing 30, 40 pounds a week and

:48:44. > :48:47.they cannot explain where it has come from.

:48:48. > :48:51.There is a deduction from the invoice, there is a clear need for

:48:52. > :48:55.transparency in the terms you are engaged.

:48:56. > :49:00.Before coming here today I had a look at the differences in worker

:49:01. > :49:05.status, I found 83 metrics where there is a difference in status

:49:06. > :49:09.between employee and worker, not dissimilar to the point you are

:49:10. > :49:14.making it is clarity and transparency.

:49:15. > :49:20.Umbrella companies should be prohibited. There is no place for

:49:21. > :49:31.them in the 21st century Britain. Another they had of exploitative

:49:32. > :49:35.work, where the employers are exposed. There is no call for it.

:49:36. > :49:40.They are often double charged for the management company that holds

:49:41. > :49:45.the business that does not exist, the sole employee, and the director

:49:46. > :49:50.of the business, and the beneficiary of the dividend, which is a wage.

:49:51. > :49:54.This is perverse. In the construction industry, I understand

:49:55. > :49:59.it in Teesside but elsewhere, this is widespread. It should be clamped

:50:00. > :50:06.down on. It should be clamped down by the government and by the

:50:07. > :50:10.clients. They have the role to understand the employment models

:50:11. > :50:17.used in this chain. There is no good saying you employ A, B, C but not

:50:18. > :50:20.interested in the second or third or fourth tier employment and the

:50:21. > :50:30.method of employment that they are under. That should be challenged.

:50:31. > :50:39.There should be proper transparency. That these employment models have no

:50:40. > :50:43.place in 21st-century Britain. I would like to allow Amanda in.

:50:44. > :50:49.Talking about the online forums, I would encourage you to go onto the

:50:50. > :50:56.website. Mark said we are now forced on to umbrella company pay schemes,

:50:57. > :51:01.the wage varies wildly from one week to the next. If you enquire about

:51:02. > :51:05.the discrepancy of met with reasons Stephen Hawkins would not be able to

:51:06. > :51:11.comprehend. This is par for the courts. He goes on to say we now

:51:12. > :51:16.also have to pay National Insurance and ?23 a week just to receive a

:51:17. > :51:21.wage. What other job do you have to pay ?1000 a year just to get paid?

:51:22. > :51:25.Again, David, is this par for the course and if it is how do we

:51:26. > :51:31.regulate against an scoop this umbrella companies? Umbrella

:51:32. > :51:36.companies do not tend to operate in a sector licensed by the gang

:51:37. > :51:41.masters licensing authority because there is enforcement. The

:51:42. > :51:49.Association of Labour providers has known relationship with the umbrella

:51:50. > :51:54.companies. It is interesting to note that in German legislation there is

:51:55. > :52:01.a ban on what is known as chain leasing in that there should be no

:52:02. > :52:04.more than one supplier between the worker and the end the air so it

:52:05. > :52:09.might be worth an enquiry looking into legislation in that country.

:52:10. > :52:15.There are some I believe individuals who choose to work through that

:52:16. > :52:20.route. I was given the example of HGV drivers for whom there is always

:52:21. > :52:28.work available. They choose to work through that route because of the

:52:29. > :52:34.tax advantages it provides them personally methods are being

:52:35. > :52:41.employed through PAYE but as I can say we have no relationship with

:52:42. > :52:46.umbrella companies. I have a couple questions for Steve will stop

:52:47. > :52:50.obviously the last time you gave evidence to us was in the context of

:52:51. > :52:58.sports Direct and I was wondering in terms of your perspective, how have

:52:59. > :53:03.working conditions of agency workers changed since you gave us evidence?

:53:04. > :53:09.A bit of an update. OK, bit of a mixed picture at full strength after

:53:10. > :53:12.the session. There were a number of constructive changes for employees

:53:13. > :53:19.on course Sports Direct employee 90% of the warehouses agency workers not

:53:20. > :53:26.as employers. They are still 1366 hours, which are effectively zero

:53:27. > :53:31.hours contracts. After the end of every you are zero hours contracts

:53:32. > :53:38.you are exploited in every fashion that zero hours and one that brings

:53:39. > :53:43.about and we have documented that. The removed zero hours contracts for

:53:44. > :53:48.direct employees in their retail operation which was a welcome move

:53:49. > :53:51.for those 8000 employees which does demonstrate the ability for

:53:52. > :53:55.employers to offer guaranteed hours and not to exploit on zero hours

:53:56. > :54:05.contracts or to fall down the drain in terms of the business if they

:54:06. > :54:12.were forced to do so. So strict did remove the sick strikes and you out,

:54:13. > :54:18.how they exert their authority over the contracts as a client company.

:54:19. > :54:26.This is a business model last we have said, in terms of the agency

:54:27. > :54:30.workers themselves there has been no change will stop I know you will

:54:31. > :54:37.receive evidence from trans-line. We got a ?1 million back payment for

:54:38. > :54:45.nonpayment of the National minimum wage and trans-line have refused to

:54:46. > :54:52.pay that. For the period of employment that employees had before

:54:53. > :54:55.translated over the contract. The refused to honour the transfer of

:54:56. > :55:01.undertakings regulations. This is a huge issue for workers where other

:55:02. > :55:07.agencies on the agreement in full. Sports direct paid in full the back

:55:08. > :55:12.page commitment but one agency, trans-line has decided that it will

:55:13. > :55:16.not deliver. It views itself not possible for the employment period

:55:17. > :55:21.of blue Arrow before it assumed the contract. Under the transfer

:55:22. > :55:25.regulations it is absolutely responsible and should pay and

:55:26. > :55:33.should be forced to pay five HMRC. That might the question you might

:55:34. > :55:42.want to ask trans-line. This is an area of interest for me. We have got

:55:43. > :55:46.trans-line coming in as you point out. It is a chance to go on the

:55:47. > :55:52.record, what you anticipate they will say to me about your comments

:55:53. > :55:59.here and how you will counter this it is almost like they are slightly

:56:00. > :56:02.the wrong way round. Would you anticipate they should say when they

:56:03. > :56:07.appear later and how you are about in and specifically what evidence do

:56:08. > :56:13.you have the support of the bottle? I'm not sure what trans-line will

:56:14. > :56:17.say. Verstappen support a rebuttal. For payments that were endured

:56:18. > :56:23.before they became the employer. That is what they have said to their

:56:24. > :56:27.employees. They are not responsible. We disagree on that needs to be

:56:28. > :56:32.enforced but unfortunately this is an HMRC enforcement action and it is

:56:33. > :56:34.usually under resourced, that is another issue. Proper enforcement of

:56:35. > :56:49.statutory rights. . The point you're making was that the

:56:50. > :56:52.between Sports Direct to the agency effective agency workers was clearly

:56:53. > :56:57.established because they were able to remove the sick strikes and

:56:58. > :57:03.you're out. Regardless of trans-line or blue Arrow they are still

:57:04. > :57:06.overseeing the accountability. Absolutely, the client should force

:57:07. > :57:13.them to do that and may have chosen not to. I want to come back to

:57:14. > :57:16.Transline in the second but are their any other things in terms of

:57:17. > :57:22.working practices and what of the key things they still need to

:57:23. > :57:28.address? We put forward proposals to Mike Ashley directly as CEO of

:57:29. > :57:33.Sports Direct for a transition of agency workers to direct employment

:57:34. > :57:37.and it has gone nowhere. Sports don't currently working on the basis

:57:38. > :57:47.they will transferred ten workers a month. There has been no movement on

:57:48. > :57:51.collective bargaining arrangements. We have also put forward proposals

:57:52. > :57:54.for access to the agencies because previous correspondence we had had

:57:55. > :57:58.from the agencies was that they were only willing to meet with the

:57:59. > :58:02.agreement is for strike. An explanation of the power of the

:58:03. > :58:06.client has over the agency. We put forward proposals for an open access

:58:07. > :58:19.agreement to agency workers and that is gone nowhere. There is no

:58:20. > :58:31.transition period, no agreement on effectively zero hours contracts...

:58:32. > :58:34.Rulli there is a mixed message, where Sports Direct were directly

:58:35. > :58:37.responsible and it was in the public air they have taken action where

:58:38. > :58:41.they are not responsible for the replacement of the as the client and

:58:42. > :58:49.where it is not in the public domain no action has taken place. So you

:58:50. > :59:01.have pre-empted the second question about trans-line, you have given me

:59:02. > :59:08.on the area, talking about agency workers generally? Transline is the

:59:09. > :59:11.agency responsible at Argos distribution where workers were paid

:59:12. > :59:15.significantly less under the exploitative use of the Swedish

:59:16. > :59:23.derogation than direct employees at Argos. I understand they are losing

:59:24. > :59:30.contracts in various is the fun. They understand there will not allow

:59:31. > :59:33.you as a client to employees agency workers and various areas. We are

:59:34. > :59:37.trying to deal with exploitative of one month wherever we find it. And

:59:38. > :59:42.we will hold them to account. Not just in terms of organising their

:59:43. > :59:45.employees and trying to get decent terms and conditions for all

:59:46. > :59:51.employees, other workers can fall through the net. The worker often

:59:52. > :59:55.gets neglected and pays the price. Also we will expose it publicly has

:59:56. > :59:58.well and if we can make toxic zero as employment to the extent that

:59:59. > :00:02.zero hours become band in the UK have they have been in New Zealand

:00:03. > :00:06.recently, it is not impossible to do this. All of those companies that

:00:07. > :00:11.said we would collapse and fall in the this if we could not employ

:00:12. > :00:15.people in the most exploitative way possible are still operating in

:00:16. > :00:18.Auckland and Wellington very profitably. The workers are now on

:00:19. > :00:21.guaranteed hours and have access to trade unions and trade unions have

:00:22. > :00:28.access to workers as well. By statutory right. Whether recognised

:00:29. > :00:31.in the workplace not. Which is proposal we have put forward in

:00:32. > :00:35.terms of our evidence that trade union should have access. Trade

:00:36. > :00:40.unions are a huge resource in terms of enforcement as well. We have

:00:41. > :00:45.offered our shop stewards and our health and safety ropes to the

:00:46. > :00:48.Health and Safety Executive and the enforcement bodies to no avail. We

:00:49. > :00:51.have thousands of accredited shop stewards that could be the eyes and

:00:52. > :00:57.the years of the employment enforcement bodies and enter these

:00:58. > :01:00.workplaces and talk in confidence to workers to enable us to expose and

:01:01. > :01:07.bring actions against those who exploit. Thank you, I think you're

:01:08. > :01:10.going to trade unions?, convert those nicely into what Peter has

:01:11. > :01:17.questioned about the role of trade unions. Steve, when we visited the

:01:18. > :01:20.sports direct facility we visited the Unite facilities on the way up

:01:21. > :01:25.and spoke about the fifth is frustration is your regional staff

:01:26. > :01:28.had in getting access to the workers but also in having access to the

:01:29. > :01:33.management as well just to talk about what was going on and the

:01:34. > :01:39.rights of people who were agency staff. You said earlier in your

:01:40. > :01:44.testimony that the world of modern work is evolving rapidly will stop

:01:45. > :01:49.is the world of union representation evolving rapidly enough to keep up?

:01:50. > :01:52.Or is it a question of trying to make work more like it has been in

:01:53. > :01:56.the past in order that you can represented in the way you always

:01:57. > :02:01.have done? I think work is changing rapidly and I think trade unions are

:02:02. > :02:05.adapting as best as we can and as quickly as we can to that. We are

:02:06. > :02:08.trying to go digital of course to catch up with the Digital economy

:02:09. > :02:11.and we are trying to find ways in which we can engage with workers

:02:12. > :02:14.that do not have a work most of which there are many tens of

:02:15. > :02:20.thousands now, employed as we have said on an algorithm as opposed to

:02:21. > :02:23.in the workplace. Union representation is falling and it has

:02:24. > :02:28.been for a long time and you have not been managing to stem the flow.

:02:29. > :02:39.Why is that? Why are people not drawn to the union movement. Why is

:02:40. > :02:42.it you are not able to attract them? Will comeback to agency staff which

:02:43. > :02:49.is a specific problem that in general terms people don't seem to

:02:50. > :02:54.be turning to unions in the way they once were. Trade unions and has a

:02:55. > :02:58.job intent on making itself relevant to new groups of workers that do not

:02:59. > :03:01.on the trade unions as relevant as perhaps traditional groups of

:03:02. > :03:05.workers may well have done. We are trying to do that and we have

:03:06. > :03:11.established an agency in precarious work unit that draws testimony from

:03:12. > :03:15.workers and try to stick to represent the workers and find ways

:03:16. > :03:18.of collectively organising them. The reality is the state has become

:03:19. > :03:25.increasing hostile towards trade unionism. It will be increasingly

:03:26. > :03:28.helpful if TUPE had reconstituted into its own role the commotion of

:03:29. > :03:34.industrial relations on collective bargaining. That was removed a long

:03:35. > :03:37.time ago. Perhaps the state should look at that again. We have put

:03:38. > :03:41.forward proposals for collective bargaining to ensure there is a

:03:42. > :03:47.baseline of common terms and conditions that you cannot fall

:03:48. > :03:50.below beyond the National living wage or the national minimum wage

:03:51. > :03:55.across core sectors of economy. We would to see a return to that,

:03:56. > :04:01.collective bargaining is the single biggest, it gives us the single

:04:02. > :04:02.biggest ability to address in work poverty and growing inequality in

:04:03. > :04:10.our country. Agency staff are probably one of the

:04:11. > :04:17.most disempowered group of workers that we have in our countries in

:04:18. > :04:23.terms of statutory rights, in terms that a high percent are migrant

:04:24. > :04:28.workers, lots of factors make them disempowered. How do you represent

:04:29. > :04:41.them when many of them are only working on two, two, or three week

:04:42. > :04:55.contracts? You can't be a member of unite then? You can. As automation

:04:56. > :05:01.kicks in, people will go in and out of work, people need reskilling, we

:05:02. > :05:08.will have to discuss issues like the guaranteed minimum income.

:05:09. > :05:14.I understand that but the union status, there are the statutory

:05:15. > :05:19.side, and then passing the laws and granting access for people to have

:05:20. > :05:24.the rights to be represented in the workplace and also you must adapt to

:05:25. > :05:27.the modern workplace, where people are working in several different

:05:28. > :05:33.workplaces in the course of one month if you are an agency worker,

:05:34. > :05:39.you could be working in several places in the course of a week, how

:05:40. > :05:41.do you you as a union adapt to represent people flitting between

:05:42. > :05:47.work spaces in the space of a week? We do that. We are adept with

:05:48. > :05:56.dealing with the issues that our members raise with us, whether with

:05:57. > :06:01.an employer or client. If employed by the agency, the issue is raised

:06:02. > :06:05.by the agency. We find ways to best represent people with the resources

:06:06. > :06:11.that we have got, and the demands that they have on us. We do that in

:06:12. > :06:16.a changing economy. Of course we adapt. We are up for that. We are

:06:17. > :06:20.investing heavily in dealing with the digital economy and to engage

:06:21. > :06:24.with working people so that they see the benefit of trade unionism. We

:06:25. > :06:30.need the state to open the access to workers. We are not even approaching

:06:31. > :06:36.employers for recognition agreement, we are looking for access. If we can

:06:37. > :06:40.access workers, I don't find the workers hostile to trade unionism, I

:06:41. > :06:45.find them fearful if they are working for an employer that is

:06:46. > :06:48.hostile to trade unionism, and a form of collective organisation or

:06:49. > :06:53.representation and there is a lot of that in the agency field, where they

:06:54. > :06:58.see collective organisations as being an interfeern in their ability

:06:59. > :07:03.to exploit. If that is interference of exploitation, I am proud to get

:07:04. > :07:15.up and interfere with their ability to exploit. So, there is also,

:07:16. > :07:23.considering the volume of people working in the facility of Shybrook,

:07:24. > :07:27.a lack of demand to get you in there but pockets of people seeking your

:07:28. > :07:34.representation, how do you turn had relationship around? What does it

:07:35. > :07:42.take to get union representation within a place like Shybrook? I am

:07:43. > :07:46.hopeful I will be able to appear before the committee with Mike

:07:47. > :07:52.Ashley, talking about how exemplary an employer he has become. But I see

:07:53. > :07:57.that as a long way of. Are you in dialogue? Yes, with him

:07:58. > :08:03.and the company, Sports Direct. But the reality is we have had to find

:08:04. > :08:07.new ways of organising workers, mainly migrant workers from Eastern

:08:08. > :08:10.Europe, where English is a second if not third language, we are

:08:11. > :08:15.organising them in their communities as we don't have access to the

:08:16. > :08:20.workplace. People are fearful about approaching us outside of the

:08:21. > :08:23.workplace as they could be picked up on a security camera, or identified

:08:24. > :08:27.as pro-union and wants to do something about the conditions in

:08:28. > :08:32.the workplace and they could not find work anymore. So we are

:08:33. > :08:37.organising in their communities, front rooms, church halls, villages,

:08:38. > :08:42.with wherever we can. Meeting on the bus to and from work, talking where

:08:43. > :08:44.we can and engaging and finding people that will develop a

:08:45. > :08:49.collective organisation inside Sports Direct itself. We have been

:08:50. > :08:54.successful of that. As successful as we would have liked to have been. As

:08:55. > :08:59.a trade unionist looking to grow our arm but this is not just about that,

:09:00. > :09:04.this is about dealing with obscene injustice in the workplace, that is

:09:05. > :09:09.a bigger responsibility we have as a trade union movement and you as

:09:10. > :09:11.Parliamentarians as well to address grows injustice, unfairness and

:09:12. > :09:15.abuse at work. Thank you.

:09:16. > :09:20.David, one follow-up question, do you acknowledge there is an

:09:21. > :09:23.imbalance between the rights of agency workers and the needs of

:09:24. > :09:29.employers? I think in all of the answers that have been put to you

:09:30. > :09:32.until now regarding the challenges that the individuals face in the

:09:33. > :09:38.workplace in terms of having rights, most of the answers have come back,

:09:39. > :09:45.say there is a demand for it from employers. We accept that the

:09:46. > :09:51.employers need flexibility. Do you accept that with increasing

:09:52. > :09:55.flexibility requires a different way of empowering the worker? I think I

:09:56. > :10:02.would agree with that. I think if you were to ask most

:10:03. > :10:07.people, the vast majority of people what the difference between the

:10:08. > :10:11.rights of an employie and the rights of a worker are, they would be

:10:12. > :10:19.hard-pressed to bring out the 83 points. One point I would make is

:10:20. > :10:22.that we have an ACAS code of practice on disciplinary and

:10:23. > :10:30.grievous procedures which applies to employees only. It's a three-strike

:10:31. > :10:34.process, written warning, final written warning, dismissal. Not a

:10:35. > :10:38.six-strike process but three strikes, yet there is no code of

:10:39. > :10:43.practice that covers the rights of workers and agency workers. We have

:10:44. > :10:52.a number of gaps like that throughout our legislation. I think

:10:53. > :10:59.it's correct to say that union recognition amongst agency workers

:11:00. > :11:05.is low and I've worked with trade unions all of my career. People make

:11:06. > :11:10.a decision to join a trade union, often, what will it bring me? How

:11:11. > :11:15.will it help me? That's the message that I'm not sure is getting to that

:11:16. > :11:22.group of workers. I think with this inquiry and with

:11:23. > :11:29.Matthew Taylor's review, we have a unique opportunity in my lifetime to

:11:30. > :11:35.redress some of these rights and to equalise some of these rights. To

:11:36. > :11:41.look at the gaps. There are hugeas of employment law

:11:42. > :11:47.which are not clear with regard to agency workers and with regard to

:11:48. > :11:56.workers and that's why I so much welcome this review. I hope that we

:11:57. > :12:04.can all work together to put, to re... Readjust this balance.

:12:05. > :12:08.If we look back to 2008 and the huge unemployment and how we have come

:12:09. > :12:13.over the last few years in getting people back into work, I think

:12:14. > :12:23.that's something that as a nation we should pay high regard to. But I

:12:24. > :12:29.think now there is a time to look at how can we ensure that those most

:12:30. > :12:33.vulnerable in our society, and this is not just agency workers, I know

:12:34. > :12:38.we are talking about agency workers today but I work in many of the

:12:39. > :12:45.lowest paid supply chains in the country and I promise you, the

:12:46. > :12:51.exploitation I see is much worse in other sectors than in the agency

:12:52. > :12:56.worker section. But I think it is a lot of work to do to ensure that

:12:57. > :13:01.workers know their rights, that they have access to learn what they are,

:13:02. > :13:05.and access to remedy whether or not they are getting those rights. I

:13:06. > :13:13.think we have a unique opportunity to address that.

:13:14. > :13:18.Thank you. A small question for Antoinette.

:13:19. > :13:25.You spoke about licensing, is it appropriate to licence the agencies

:13:26. > :13:30.and extend the remit of the Gangmasters' Licensing Association?

:13:31. > :13:36.I was on board with the Gangmasters' Licensing Association from 2005 to

:13:37. > :13:39.2015. I'm a strong advocate that they have done of working in

:13:40. > :13:46.partnership with business to work together to improve the rights of

:13:47. > :13:53.workers. So I am a strong advocate for proportionate regulation. In

:13:54. > :13:59.reality, it comes down to enforcement and enforcement with

:14:00. > :14:04.teeth as a deterrent and as a regulation by reputation. The

:14:05. > :14:13.challenge with the licensing model is that it doesn't come cheaply. I

:14:14. > :14:18.would certainly advocate exploration of some kind of regulation in

:14:19. > :14:27.certain supply chains that we see in the UK.

:14:28. > :14:32.Which ones? Car washes are the obvious example that have been

:14:33. > :14:38.given.as where we have seen higher levels of modern slavery than we

:14:39. > :14:45.expect in other supply chains nail bars have been mentioned. Yes,

:14:46. > :14:51.agencies to some degree, especially where they are supplying work, where

:14:52. > :14:58.the challenges, how to do fine the sectors. I have never come up with

:14:59. > :15:03.an answer. How do you define this vulnerability? But I think some

:15:04. > :15:09.clever minds put to it could advocate that. And I strongly

:15:10. > :15:13.support the position of Sir David Metcalfe into the director of the

:15:14. > :15:18.labour market enforcement role and how he has taken a wider perspective

:15:19. > :15:24.on enforcement. And there is a lot of work that could be done in

:15:25. > :15:29.shifting the national minimum wage enforcement teams' focus from being

:15:30. > :15:34.complaints-driven to intelligence-driven. And a final

:15:35. > :15:37.question, I would appreciate a single sentence to the final

:15:38. > :15:42.question, which is if you could provide one recommendation to us in

:15:43. > :15:45.respect of our inquiry, the balances, the needs of firms to

:15:46. > :15:52.respond to market conditions but also ensuring that workers have

:15:53. > :15:55.dignity, have security in terms of their terms and conditions as

:15:56. > :16:04.possible, what would you suggest to us? David? I will start with a

:16:05. > :16:06.simple one. It is a tricky question, I think a defined satus of agency

:16:07. > :16:14.worker. Thank you. Lindsay Judge snow

:16:15. > :16:17.Increased investment in the advice sector so people are able to enforce

:16:18. > :16:24.their rights. Thank you. Steve? Employment rights

:16:25. > :16:29.for all workers, irrespective of what your work may be. Category

:16:30. > :16:34.blind. And restrictions on agency work to what is really agency work,

:16:35. > :16:39.temporary work, not permanent. Tim? Clarity so people know what

:16:40. > :16:44.their status is. Thank you. It's been helpfulful and

:16:45. > :16:53.stimulating. Thank you very much for your time. We appreciate it.

:16:54. > :16:58.Thank you for coming to give evidence. We are very grateful. Can

:16:59. > :17:04.I ask you to start by giving us your name and the organisation you

:17:05. > :17:10.represent. Starting with Ben? I am Ben Groefr, an external policy

:17:11. > :17:15.adviser for the Association of recruitment consultancis. Aid ran

:17:16. > :17:21.Gregory, director of a local recruitment agency based in Earls

:17:22. > :17:27.Court who supplies generally lower paid staff to the logistics,

:17:28. > :17:31.distribution events. Jennifer Hardy, director of...

:17:32. > :17:36.INAUDIBLE I have worked with the GMB for 37

:17:37. > :17:43.years, working in the private and public sector, working with agency

:17:44. > :17:48.workers, trade union members and not.

:17:49. > :17:53.Aid ran, may I start with you. Your written evidence to us was

:17:54. > :17:59.extraordinary. Which is a reason I asked you to give evidence: Having

:18:00. > :18:03.spent 30 years in the business, I would go further, this is what you

:18:04. > :18:08.said earlier, to suggest that my particular part of the recruitment

:18:09. > :18:14.industry, dealing with unskilled staff, operating with little regard

:18:15. > :18:17.for the law and no ethical considerations, a pernicious

:18:18. > :18:21.cocktail of inadequate, impractical and muddled levelling sleighs,

:18:22. > :18:25.combined with a complete disregard for the rights and the welfare of

:18:26. > :18:30.the temporary staff who earn agencies their money has led to mass

:18:31. > :18:33.exploitation coupled with huge tax avoidance. That's an astonishing

:18:34. > :18:38.statement. Let's try to die sect some of that. Inadequate, what do

:18:39. > :18:44.you mean by that? Inadequate legislation. It says inadequate,

:18:45. > :18:50.impractical and muddled legislation so. Inadequate? Can I give one

:18:51. > :18:56.example. There are many but if I give one, otherwise we could be here

:18:57. > :18:59.for a long time. The Swedish derogation has been banded around

:19:00. > :19:06.but I don't think many understand what it means. If I explain that, it

:19:07. > :19:11.is an example. Where the agency worker regulations were introduced

:19:12. > :19:16.in 2011, the aim to give Tim rather agency workers who have worked at

:19:17. > :19:21.the same clients for 12 or 13 weeks or more the same pay and basic

:19:22. > :19:27.conditions as if they were a permanent member of staff. That was

:19:28. > :19:32.an EU directive. The government in this day allowed the Swedish

:19:33. > :19:37.derogation or paid between assignments model to be included.

:19:38. > :19:44.David would know more but the aim of that was to satisfy people higher up

:19:45. > :19:49.the salary scale such as IT contractors and so on, the aim to

:19:50. > :19:56.opt out as an individual of the equal pay part of the regulations

:19:57. > :20:02.but in return you were able to, you had to be paid when you are out of

:20:03. > :20:04.work for a minimum of four weeks but basically indefinitely until the

:20:05. > :20:14.contract was ended. Before the regulations were

:20:15. > :20:19.introduced I remember going to a seminar that implementation of the

:20:20. > :20:23.Swedish derogation, my life can be exciting times. During the course of

:20:24. > :20:32.that whole seminar busting a whole day there were huge legal

:20:33. > :20:35.discussions about how you would implemented, the agreements you

:20:36. > :20:40.would have to have with your clients to satisfy the pool of money so that

:20:41. > :20:43.people be paid, so on and so forth. I remember coming out of a meeting

:20:44. > :20:51.thinking people will never use this model, this simply doesn't work. I

:20:52. > :20:55.had completely underestimated the deviousness of my own industry and

:20:56. > :20:59.what happens in a widespread area particularly in the warehouses that

:21:00. > :21:04.employ hundreds and possibly thousands of workers is that

:21:05. > :21:08.effectively everybody is working on a Swedish derogation contract has

:21:09. > :21:13.given up their rights to equal pay and they do not get paid when they

:21:14. > :21:20.are between work. A brief example, I was part of a delegation to see

:21:21. > :21:28.Chuka Umunna about three years ago, various Liverpool MPs and city

:21:29. > :21:34.councillors were looking into practices in a large well-known food

:21:35. > :21:36.company in Liverpool. They had a couple of individuals who had been

:21:37. > :21:40.working there and the spokesman had been there for six or seven years

:21:41. > :21:43.working on minimum wage and all sorts of other things going on that.

:21:44. > :21:51.In particular with a Swedish derogation. When the meeting took

:21:52. > :21:58.place he had been out of work for six or seven weeks. Every two, three

:21:59. > :22:04.or four times a day he would get a text of his agency and the agency

:22:05. > :22:08.would say work available, contact us now. Every time he responded they

:22:09. > :22:13.would say the word had gone. This has been going on for some time.

:22:14. > :22:22.What was the point of all that? I point out he was one of our 500

:22:23. > :22:27.workers there. The whole point of this was that in order to qualify

:22:28. > :22:31.for pay between assignments under the Swedish derogation you have to

:22:32. > :22:36.be available for work at all times so the agency had a system whereby

:22:37. > :22:39.you could get a text message at 2am saying there was work available and

:22:40. > :22:44.you are expected to get up and say yes you are available and in theory

:22:45. > :22:48.to work. Obviously it was evident that there was no work actually

:22:49. > :22:50.available but they had to keep giving these invitations to work

:22:51. > :22:55.just so they could say to the temporary worker we didn't pay you

:22:56. > :22:59.between assignments because you didn't respond to the text message

:23:00. > :23:04.at 2am on Saturday morning there for you are in breach of contract. They

:23:05. > :23:10.even had a belt and braces clause whereby if you did reply to every

:23:11. > :23:17.single text they would offer you six-hour training and Blackpool, 15

:23:18. > :23:23.miles away and would take two buses and two trains. That is how there

:23:24. > :23:27.was work and that is how the Swedish derogation was widely practised. I

:23:28. > :23:31.have never come across an example of any temp being paid anything when

:23:32. > :23:40.between assignments. That is for legislation in my view. Tim, do you

:23:41. > :23:45.recognise this pernicious cocktail, in advocate, impractical, muddled

:23:46. > :23:48.legislation, with complete this regard for the rights and welfare in

:23:49. > :23:56.the very people who earn the money which mark is this what agency

:23:57. > :24:00.workers want? That is the world not just of agency workers but of casual

:24:01. > :24:04.employees and we have to look at this in a far rounder sense will

:24:05. > :24:09.stop I know the committee on to focus on the use of agency workers

:24:10. > :24:14.but we talked earlier about the world of work and it is changing but

:24:15. > :24:20.the direction of travel for employees and workers is one of

:24:21. > :24:24.categorisation. It is agency work, zero hours, it is gig economy

:24:25. > :24:30.employment. All casual, with no guarantees. It is either very

:24:31. > :24:34.flexible or utterly and flexible. What I mean is that for the employer

:24:35. > :24:40.it is utterly flexible and members get a text on the bus on their way

:24:41. > :24:45.to work to say we do not need you for another two hours, do you just

:24:46. > :24:49.go home? Of course not, you go to work and sit around in the canteen

:24:50. > :24:53.and maybe you will end up starting work early or alternatively you get

:24:54. > :24:59.the text message saying we do not need you today. How do you live with

:25:00. > :25:04.that? What do you say to the gas and electricity person? I cannot pay my

:25:05. > :25:09.bills this week? That is absolutely my experience. The problem is there

:25:10. > :25:14.is a notion out there amongst members the public that workers are

:25:15. > :25:19.used by employers and times of peak business and there are examples of

:25:20. > :25:23.that. In the Lincolnshire fields in the summer picking season you need

:25:24. > :25:27.to employ more people. In the lead up to Christmas you need to for a

:25:28. > :25:32.more people that is not what is happening. This is a systematic

:25:33. > :25:38.model of employers who highly profitable using agency staff to

:25:39. > :25:41.hire and fire on a revolving door. I should have mentioned and I

:25:42. > :25:49.apologise that I am a member of the GMB. Then, is this a good reflection

:25:50. > :25:52.of what the recruitment industry is like it is not a reflection of our

:25:53. > :25:57.membership, are members are very much about compliance with the law.

:25:58. > :26:02.I would agree sometimes the law is difficult to understand and

:26:03. > :26:08.certainly matters of worker status are difficult to grasp at times. We

:26:09. > :26:14.think it would be very helpful to have a single definition of agency

:26:15. > :26:16.worker or even one that applied to the tripartite arrangements

:26:17. > :26:23.generally so that could encompass the gig economy as it is being

:26:24. > :26:27.referred to but in terms of tax avoidance or avoidance of worker

:26:28. > :26:35.rights it is certainly not something I have experienced and generally we

:26:36. > :26:40.are out there to help comply with the law. The conduct revelations

:26:41. > :26:44.that were introduced in 2003 set out the rights or rather how agencies

:26:45. > :26:49.must treat their workers and indeed their clients and a lot of that is

:26:50. > :26:54.about making it clear to the work what their status is, when they will

:26:55. > :26:58.be paid, what their rate of pay will be and one of the key is. The

:26:59. > :27:04.conduct regulations is that the agency worker should not be subject

:27:05. > :27:07.to a detriment. So they're already regulations in place which can be

:27:08. > :27:13.enforced. It is possibly the fact they are not just being enforced

:27:14. > :27:18.sufficiently. Jennifer, welcome back. In terms of the situation

:27:19. > :27:23.being described in Adriaan's written evidence is that something you would

:27:24. > :27:27.recognise as somebody who is a practitioner in respect of agency

:27:28. > :27:33.workers. Rulli I would agree on a number of points. I do believe there

:27:34. > :27:37.is a lot of areas in our sector that is competitive and noncompliant and

:27:38. > :27:41.it has been alluded to earlier, the use of umbrella companies and the

:27:42. > :27:45.use of alternative the models that can be right. It is not something

:27:46. > :27:51.that we as a business condone or enter into and we find that our

:27:52. > :27:54.competitors are able to undercut our prices on the basis that they are

:27:55. > :27:59.receiving income from other places and that is something that we should

:28:00. > :28:05.focus on in the sector because it is not a level playing field we don't

:28:06. > :28:10.promote that to our clients, we are trying to educate our clients so

:28:11. > :28:19.that they need to identify those schemes that are in place. Forgive

:28:20. > :28:23.my youth in you said it is not a level playing field because others

:28:24. > :28:30.are getting income from elsewhere. The way the models work and I'm not

:28:31. > :28:34.an expert, in the earlier session with automatic packaging people

:28:35. > :28:40.laugh into different companies. I have seen models where someone in

:28:41. > :28:48.the Philippines, as a director of that business, onshore and offshore

:28:49. > :28:57.models, that allows the agency to generate greater profits further

:28:58. > :29:00.than the margin and that the undercuts the paid by national

:29:01. > :29:04.interest that should be due on those workers and that is something that I

:29:05. > :29:15.think is an area that is really important is eradicated. David Kamp

:29:16. > :29:18.said earlier there are four categories, criminal, dodgy,

:29:19. > :29:24.compliant and leading. Which category is trans-line. I would say

:29:25. > :29:31.we are compliant and we are aiming to be leading. What will you do to

:29:32. > :29:34.make sure? Derry since my last bits we have worked very are not only in

:29:35. > :29:40.those areas I was asked to comment on that because our entire business

:29:41. > :29:51.we have engaged with a number of third-party independent auditors. We

:29:52. > :29:56.have been ordered to the LP and GLA standards and we are still

:29:57. > :29:59.continuing with that process and we welcome any independent auditors to

:30:00. > :30:03.the mainland look at us and anything of our entire we have made sure that

:30:04. > :30:05.we are moving forward and progressing and we are totally

:30:06. > :30:14.transparent and compliant within the sector. 'S reputation important for

:30:15. > :30:19.your business? Repetitions are important and we feel now it is the

:30:20. > :30:22.totally compliant and so the transparent and want to make sure

:30:23. > :30:24.that our clients and the entire sector is educated to what

:30:25. > :30:28.compliance actually looks like and what is good compliance and what is

:30:29. > :30:37.bad compliance and it is not necessarily easy to see. I have

:30:38. > :30:42.looked at your accounts and you are operating on wafer thin margins. You

:30:43. > :30:47.have got a large turnover of that very small operating profit. The

:30:48. > :30:52.reason I ask about reputation is is it is the case that you have to try

:30:53. > :30:55.to suppress costs down with as much as possible in order to increase

:30:56. > :31:00.your margins? Costs will be more important than reputation. The

:31:01. > :31:06.reason we have a wafer thin margins because we offer everything a

:31:07. > :31:14.compliant model. We're not operating an alternate scheme which uses the

:31:15. > :31:22.worker to create more profits in some cases. Then you talked about

:31:23. > :31:28.being at the reputable end of the industry, how many of your members

:31:29. > :31:34.apply the Swedish derogation? To my knowledge not many. I can try to

:31:35. > :31:44.establish how many but I do not know the numbers now. I think it would be

:31:45. > :31:49.very useful. Do you apply it still? Does Transline still apply? The

:31:50. > :31:54.Swedish derogation? We have very minimal workers on the Swedish

:31:55. > :31:57.derogation, it is less than 5% and that is only on the request of

:31:58. > :32:02.plants, it is not something we promote. We promote pay parity which

:32:03. > :32:08.means the benefits and the pay that the permanent workers get the agency

:32:09. > :32:11.workers also get. So again are you able to provide evidence to the

:32:12. > :32:18.committee that the amount of payment you have made. To agency staff that

:32:19. > :32:20.have been out of work for four weeks or more? I can certainly look into

:32:21. > :32:33.that. If the Swedish can I just read that, it is out of

:32:34. > :32:39.work for one week or more. Entitled to a least four weeks pay. So if

:32:40. > :32:46.that loophole if I can call it that is plugged in some way or will

:32:47. > :32:50.change so it becomes enforced properly as opposed to not being

:32:51. > :32:54.enforced, apart from that what other recommendations would you make four

:32:55. > :33:04.changes to the agency worker regulations? I put that to the whole

:33:05. > :33:15.panel. I think if that was removed the regulations would be fairly

:33:16. > :33:25.watertight. So it is just that derogation that needs changing? I

:33:26. > :33:29.want to come onto that. I know there has been scans around holiday pay

:33:30. > :33:43.and personal accident insurance and I wonder if you could expand a bit

:33:44. > :33:46.more how they work is that an agency will take out accident insurance

:33:47. > :33:52.policy against its whole workforce. I got the quote a while ago which

:33:53. > :33:55.equated to 11p per person per week. You then sell them to your

:33:56. > :33:58.workforce. Your whole workforce is covered. Anybody who has annexed and

:33:59. > :34:09.is covered. The benefits are very poor for every

:34:10. > :34:15.example, I have seen you get very little. They don't cover back

:34:16. > :34:19.injuries, repetitive strain injuries, and the client and the

:34:20. > :34:23.agency will have employer's liability insurance in place, so the

:34:24. > :34:29.benefits are very, very limited so they retail at 11 pence per week to

:34:30. > :34:37.us. We're a small agency. I heard that larger agencies can get cover

:34:38. > :34:46.for 3 pence a week. You charge your temples to ?50 to ?3 a week, which

:34:47. > :34:53.seems the normal amount, so Annual subscription, ?1 at that, you are

:34:54. > :34:58.clamping a temp policy, ?1.50 to ?5 per annum. The agencies defend it by

:34:59. > :35:02.saying it is option but option is a very interesting question, in that

:35:03. > :35:08.we have heard on large sites where there is huge cost pressures, the

:35:09. > :35:14.agency managers are targeted to get at least 70, 80% of the people

:35:15. > :35:22.signed up to the schemes and the fall back you are not offered work,

:35:23. > :35:29.if you do, you are offered work. It me that is a scam. A reason to

:35:30. > :35:36.increase profits. I don't know the situation at Shybrook. If they all

:35:37. > :35:42.signed up, it would be ?10,000 per week for the agencies for doing

:35:43. > :35:46.nothing. Is that something you recognise, Mr

:35:47. > :35:51.Groefr? Not the personal accident insurance. It is not something that

:35:52. > :35:56.I am familiar with in context to our agency workers. With the regards to

:35:57. > :36:00.the holiday pay, that could in part be down to the wording of the

:36:01. > :36:08.working time regulations in as much as you are not meant, as an

:36:09. > :36:12.employer, engager, to pay out on a day pay unless someone requests

:36:13. > :36:19.holiday, their leave on an accrued basis. Rolled up holiday pay, as and

:36:20. > :36:22.when you receive your weekly or monthly paid packet is frowned upon.

:36:23. > :36:34.The government website doesn't support it.

:36:35. > :36:39.The, there was a European Court of Justice case, Robinson/Steele, that

:36:40. > :36:46.said it could be paid on that basis, provided transparent, ifs that what

:36:47. > :36:52.acknowledged it would be listed separately on a pay slip, addressing

:36:53. > :36:57.the issue of people assuring to be receiving the holiday pay.

:36:58. > :37:03.What does your organisation do to promote that amongst the membership

:37:04. > :37:10.that you represent? All I can is a a lot of our work is ensuring that our

:37:11. > :37:15.membership knows how to be compliant with the conduct regulations, the

:37:16. > :37:20.worker regulations and the relevant tax regulation, all of which uses

:37:21. > :37:25.similar terminology but not always in the same way. That again leads to

:37:26. > :37:30.some of the confusion. I'm asking what do you do? We try to

:37:31. > :37:34.break it down to explain it in a way that our members can understand and

:37:35. > :37:45.apply it to their workers. Do you have a quality mark or a

:37:46. > :37:48.badge, as it were that says, these are the gold standards, agencies,

:37:49. > :37:56.that we know are applying the spirit and the letter of the law and have

:37:57. > :38:02.processes in place in order to ensure that they are compliant or

:38:03. > :38:05.leading, as the categories were? I suppose I would say just being a

:38:06. > :38:10.member of our organisation is reaching that standard as that is

:38:11. > :38:15.what we are advocating. Is that right Mr Gregory? I use

:38:16. > :38:20.Ben's company, they are very good. But he is not on the ground. He is

:38:21. > :38:24.setting out what should happen but it doesn't, not at all. There are

:38:25. > :38:30.three things that we do should be best practice. I have never heard of

:38:31. > :38:35.another agency that does it. That is we put a column for holiday pay on a

:38:36. > :38:39.pay sleep. So each week the individuals can see the amount

:38:40. > :38:46.accruing. If not, they are in the dark. We allow them to accrue

:38:47. > :38:51.holiday pay at the end of a holiday year, temples may have ?500,000

:38:52. > :38:56.worth of holiday but the leave ended last week, you are starting again,

:38:57. > :39:02.so we allow them to accrue it indefinitely. And when they leave,

:39:03. > :39:07.if they have not taken it, we pay it with the P 45. Three simple steps, I

:39:08. > :39:13.have never met anyone else fulfil those. Why don't agencies do that?

:39:14. > :39:20.That is the sort of thing that ordinary workers in a 21est century

:39:21. > :39:25.developed company, should expect that they accrue the holiday, and

:39:26. > :39:28.have the right to the holiday and if at the end of the employment

:39:29. > :39:32.relationship that they are able to be paid this.

:39:33. > :39:35.I cannot overstate the dark shadow of working for an agency. Some of

:39:36. > :39:41.the stuff I have heard, I get. I understand. The best practices that

:39:42. > :39:46.Adrian talks about, that is not the world that the people in the GMB

:39:47. > :39:49.experience at all. My question was looking around,

:39:50. > :39:55.whether or not it is possible to develop a quality mark that would be

:39:56. > :40:00.able to distinguish those agencies that are compliant or leading and

:40:01. > :40:06.has the GMB and other unions worked with the industry to see if that

:40:07. > :40:11.sort of badge could be developed so that employers know this is a

:40:12. > :40:17.trusted agency, this is an agency that is compliant and it's like a

:40:18. > :40:25.trust mark. It's like a British standard in safety? David's

:40:26. > :40:31.organisation, the ALP takes very much a step towards that. They come

:40:32. > :40:36.up each year when the national Living Wage or minimum wage changes

:40:37. > :40:44.with what they call minimum charged rate guidance. What they say is if

:40:45. > :40:49.you are paying ?7.20 an hour and including employer's National

:40:50. > :40:54.Insurance, holiday pay, SDLP P, auto enrolment, pension, and what they

:40:55. > :40:59.call the unavoidable cost of observing the law on employment

:41:00. > :41:06.issues, they come out with a figure of ?9.38 per hour, saying that is

:41:07. > :41:10.cost. So that is 0% profit margin at 9.38 if you are engaging a labour

:41:11. > :41:16.provider, you should, the think that the wording is that they should be

:41:17. > :41:19.charging that plus a sustainable profit margin, which generally in

:41:20. > :41:28.the agency world is between 10 and 20%. So an a ?7.20 employee, you

:41:29. > :41:34.should be charging between ?10.30 and ?11.30 depending on the

:41:35. > :41:39.circumstances. If you came in at 9.38, ie zero %, you would not get

:41:40. > :41:44.very many big contracts. You have to come in below that. I rang a client

:41:45. > :41:50.asking the cheapest price he had been quoted H he said ?8.73,

:41:51. > :41:55.although he had been told for the first month he could have as many

:41:56. > :42:00.temples pore ?7.50. It does not make sense. Most of the large agencies

:42:01. > :42:06.and some smaller ones, operate at prices which mean that they cannot

:42:07. > :42:10.be observing their obligations. So do you think that licencing is

:42:11. > :42:18.the answer? Well I think it is. But the industry is so opposed to it,

:42:19. > :42:23.again, like Dave said, an increase of the GLA remit with stronger

:42:24. > :42:29.standards, that it would a need so many multiples of its budget to be

:42:30. > :42:34.affected, that to licence it without being effective is pointless.

:42:35. > :42:38.Could you put a position in place if you are not licensed you cannot be a

:42:39. > :42:44.recruitment agency? That is in place now. But I don't share David's Rosie

:42:45. > :42:53.view of the agencies within the GLA sector. There is more compliance

:42:54. > :42:57.within than outside of the sector and Paul Broadbent spoke of

:42:58. > :43:03.frustration that he noses of agencies that are compliant within

:43:04. > :43:09.the GLA sector, that are getting up to every trick outside of the book

:43:10. > :43:21.outside of it. Jennifer, what does Tranceline do?

:43:22. > :43:26.We INAUDIBLE

:43:27. > :43:30.Michelle? To pick up on a couple of things, the first question,

:43:31. > :43:37.Jennifer, you said earlier about insurance services to agency workers

:43:38. > :43:42.that Transline never offered? That was my counterpart in the last

:43:43. > :43:47.inquiry. So the best connection, so you have never offered? OK. And

:43:48. > :43:54.picking up on following the last theme there, in terms of licensing

:43:55. > :43:57.that the questions were, given what was described around the margins

:43:58. > :44:02.being low, and yourself, do you think that the effect of licensing

:44:03. > :44:08.would start to change this race to the bottom that we are seeing in

:44:09. > :44:13.terms of margins being cut? Yes. I am in agreement. I think we could

:44:14. > :44:20.widen the scope of the employment agency. The agency world is

:44:21. > :44:25.regulated by the employment agencies inspectorate. They have been to see

:44:26. > :44:31.me. But I do belief there are not that many people within that

:44:32. > :44:35.department. I do think that a level of licencing is a requirement in the

:44:36. > :44:40.sect. It is not something that we would push against having in place.

:44:41. > :44:45.If so, what specifically, would you like to see from your side of the

:44:46. > :44:51.fence that you think would start to change the shape and the nature of

:44:52. > :44:59.the industry? Any ideas? The contract terms that the workers are

:45:00. > :45:04.under. What good looks like, the pay models that are in use. And making

:45:05. > :45:11.it clear to our end user clients what they must look out for. That is

:45:12. > :45:17.a big education piece that across the sector, is, how douse, and

:45:18. > :45:22.aagree, how does somebody know if the agency is compliant or not. That

:45:23. > :45:28.is something that we are working hard on outside of this. You

:45:29. > :45:32.mentioned, I know you have undertaken a full review since

:45:33. > :45:38.writing to the committee in September 2016, can you run through

:45:39. > :45:43.the specific changes? In a letter to the committee 16th September, 2016

:45:44. > :45:48.you had under taken a full review of the business to ensure it was fully

:45:49. > :45:54.compliant. Can you step through what you have done? We engaged with the

:45:55. > :46:00.third party autotors that were recommended by the ALP to do a

:46:01. > :46:05.review of all of our contracts, the contracts for the workers and how

:46:06. > :46:08.they are structured. The recruitment process, ensuring that the workers

:46:09. > :46:14.fully understand what they are engaging into and that has gone

:46:15. > :46:20.beyond that point to make sure that it is available to them, that it is

:46:21. > :46:25.readable. The employment agency eninspectorate has been in to look

:46:26. > :46:31.and to review, they have a code of conduct. There were some minor

:46:32. > :46:36.points that we rectified. We are working on the recommendations and

:46:37. > :46:41.all of them are almost in place to make sure that we are ALP and GLP

:46:42. > :46:45.compliant. I am keen to understand this in

:46:46. > :46:51.detail. You spoke about contracts, so what you are saying you have put

:46:52. > :46:55.in place steps so that the workers understand the nature of the

:46:56. > :46:59.contracts that they are signing up to, to have the contracts themselves

:47:00. > :47:06.changed is more effort? The understanding? The underlying

:47:07. > :47:11.principles of the contract have not changed but the contract has been

:47:12. > :47:17.revamped and it is much more, it is easier for the worker to understand.

:47:18. > :47:22.It is worker friendly, one of the recommendations that we received and

:47:23. > :47:29.have put in place. Could you supply a copy of the contract to compare

:47:30. > :47:36.it? Yes? Other steps in terms of the review, can you step through them?

:47:37. > :47:42.We are continuing under our client review. We have undertaken an

:47:43. > :47:48.investigation from the R BC, heavily engaged with a myriad of

:47:49. > :47:53.third-party... I am trying to understand specifically, the top

:47:54. > :47:58.threeas you have changed apart from the contracts, the specifics rather

:47:59. > :48:06.than the generalities? The contract, the way that the workers are

:48:07. > :48:11.engaged, worker engagement, ensuring that we understand how the workers

:48:12. > :48:15.feel on the ground. Working with the clients to ensure that they know

:48:16. > :48:21.what is required. To know that there is nothing within our power that is

:48:22. > :48:28.going on, that has been more complex. Do you still have

:48:29. > :48:32.prepayment cards? They are in existence, I did defend them the

:48:33. > :48:37.last time I was here, however we have changed the way, there are a

:48:38. > :48:43.range of options, if someone chooses that they need a prepayment card

:48:44. > :48:48.while waiting for a bank account to be opened, and we encourage then

:48:49. > :48:57.people to move away after they have opened a full bank account but it is

:48:58. > :49:04.a mechanism nichl to ensure that payment is received on a timely

:49:05. > :49:08.basis. We don't actively encourage people to stay on them for a long

:49:09. > :49:12.period of time. But it is opportunity to ensure that they are

:49:13. > :49:18.paid on a timely basis. When you are dealing with people not on huge

:49:19. > :49:28.amounts of money, they may not have saying savings, they need that money

:49:29. > :49:38.in place. So you are showing the average time

:49:39. > :49:42.for getting that organised? Have you seen the data? I have.

:49:43. > :49:46.Are you willing to write to the committee to set out specifically

:49:47. > :49:52.what you have done to come pair where you were then as to where you

:49:53. > :49:58.are now. Thank you. Can I ask Jennifer, do you turn down

:49:59. > :50:03.work if a client says, or potential client wants to pay the least amount

:50:04. > :50:10.that they can, can you help them do that as part of the package, do you

:50:11. > :50:14.turn them down? It is not our policy to supply all that we can, we look

:50:15. > :50:19.at the risk, whether it is right for us to supply. We have been known to

:50:20. > :50:23.walk away from clients or turn them down as they are not prepared to

:50:24. > :50:28.work within our remit. OK.

:50:29. > :50:35.In the first session with thoughts about how agency would seems to

:50:36. > :50:39.becoming much broader than the traditional idea and businesses are

:50:40. > :50:45.starting to design their models around a higher proportion of agency

:50:46. > :50:52.workers. What of the consequences of that to the Labour market and the

:50:53. > :50:56.quality of training and skills, to individuals themselves and to

:50:57. > :51:02.society, and also what of the risks to employers? Can I start with you,

:51:03. > :51:08.Tim? Thank you very much. The key question I think, first of all we

:51:09. > :51:14.are seeing this becoming a model particularly in this gig economy,

:51:15. > :51:21.this fourth industrial revolution that is hurtling towards us. And

:51:22. > :51:24.firstly in terms of the individual consequences how can you plan, how

:51:25. > :51:28.can you begin to plan your life and how do you know you're going to get

:51:29. > :51:35.enough work provided by the agency themselves or by the employer, I use

:51:36. > :51:40.that phrase on purpose to be able to put the Mill on the table and pay

:51:41. > :51:44.your bills on let alone save for a mortgage will get a roof over your

:51:45. > :51:48.head. And you cannot underestimate, people tell you all the time, the

:51:49. > :51:54.fear factor. I was listening earlier and I hoped Peter asked me the same

:51:55. > :51:58.questions about the union 's role. You cannot underestimate this fear

:51:59. > :52:03.factor. People do not want to be treated like they are treated by

:52:04. > :52:08.some agency employers. People do not want to be treated where they just

:52:09. > :52:14.do not know where their next meal is coming from. That brings individual

:52:15. > :52:19.challenges. Secondly there is no evidence at all of employers who use

:52:20. > :52:26.large-scale and I differentiate large-scale between that and extra

:52:27. > :52:30.manual, for example, large-scale use of agency employers that they invest

:52:31. > :52:34.in those employees. They are viewed as temporary in every sense. They do

:52:35. > :52:38.not integrate with the permanent workforce. They are not investing in

:52:39. > :52:42.terms of their skills or in terms of their standing in the workplace and

:52:43. > :52:49.in the community. Let's be honest about where this has led. This led I

:52:50. > :52:57.think to large numbers of people voting to come out of the EU. For

:52:58. > :53:00.some years people have felt, workers have failed, that their lot is

:53:01. > :53:04.getting worse and worse and worse and with this drive towards

:53:05. > :53:07.commercialisation they feel even more disenfranchised. They feel like

:53:08. > :53:11.people like yourselves, politicians, do not understand the challenges or

:53:12. > :53:18.look like them sound like them or have the same wife expenses. So

:53:19. > :53:22.let's blame migrant workers, who brought over here, contrary to some

:53:23. > :53:33.of examples I have just heard from Jennifer, that is simply not true

:53:34. > :53:38.for Assange -- TUPE workers. I quote, the training team are told to

:53:39. > :53:41.lower the test scores to pass and get people through their tests

:53:42. > :53:45.whatever it takes even when they have little or no English are

:53:46. > :53:51.putting people at risk, but are not even able to read the fire exits.

:53:52. > :53:54.That is the implication. People there for look for something to

:53:55. > :54:02.blame. I cannot take any more losses or cuts and if they were not

:54:03. > :54:07.overhear my employer would treat me brilliantly like they used to.

:54:08. > :54:11.Probably all nonsense. I would be able to get into the doctors this

:54:12. > :54:18.week and I would have my child in a class of less than 40 people.

:54:19. > :54:24.Employers who are highly profitable, that is the key point for me. We're

:54:25. > :54:32.talking about employers like ASOS and next, you are highly profitable

:54:33. > :54:37.and do so at the expense of their workers. There is a next warehouse

:54:38. > :54:41.in South Yorkshire that needed to employ seasonal workers to meet the

:54:42. > :54:47.Christmas demand. This was just after Next had announced record

:54:48. > :54:51.profits. The first time they had ever declared profits higher than

:54:52. > :54:55.Marks Spencer 's. They offered these warehouse jobs at 10p per hour

:54:56. > :55:01.above the national minimum wage and offer them to the Polish agency.

:55:02. > :55:07.When we challenge them Next said people in that area would not work

:55:08. > :55:11.for tempi above national minimum wage. Who picks up the tab?

:55:12. > :55:17.Vimpelcom you there working at 10p per hour which drive down wages for

:55:18. > :55:22.everybody. Indigence local workers probably have to claim top of

:55:23. > :55:27.benefits, which we then pay. Into the welfare so we are now paying in

:55:28. > :55:33.work people to claim benefits to support the system and employers

:55:34. > :55:39.just raise their profits. It is unsustainable, unfair and

:55:40. > :55:47.unreasonable and it has to change. What do you think, I ask Adrian,

:55:48. > :55:50.this is going to see businesses with the upstart incident downside,

:55:51. > :55:54.surely there will come a point where they will realise that the lack of

:55:55. > :55:58.investment in the workforce and the lack of sustainability and security

:55:59. > :56:06.is detrimental to the workforce they are employing, workforces are

:56:07. > :56:13.businesses starting to see this? I think they are. We only deal with

:56:14. > :56:18.companies like that. There's always going to be a number of responsible

:56:19. > :56:22.employers who realise that well treated and properly paid workforce

:56:23. > :56:26.is going to be more productive and unexploited one. That is whether the

:56:27. > :56:33.sciences like, I do not know. Australia about being first on dodgy

:56:34. > :56:38.criminals and Steve said he would say the majority of agencies are

:56:39. > :56:48.dodgy I would say the vast majority are responsible. I would like to go

:56:49. > :56:52.back the hearing about the Passos experience. Can you tell us more

:56:53. > :56:56.about how TUPE have used agency workers and can you also say

:56:57. > :57:07.something about the route out of agency work for people as well? At

:57:08. > :57:11.any given time TUPE employee 80% of their employees through this model.

:57:12. > :57:16.Where is the benefit for the employer? You can hire and fire at

:57:17. > :57:23.any given time. They are disposable and picking up on ageing's point

:57:24. > :57:26.about where agencies are able to offer the flat ?7 50 per hour it is

:57:27. > :57:31.not reasonable and it is unsustainable and it doesn't make

:57:32. > :57:37.sense. So who pays the price for that? The workers, obviously. And

:57:38. > :57:42.through the use of payment cars, the National living wage, they get this

:57:43. > :57:49.minimum wage, any payment out of that takes them over. Payment cards,

:57:50. > :57:52.lodgings, an example where and because landlords have people six in

:57:53. > :57:56.a room and charge people for it. National Insurance deductions, all

:57:57. > :58:06.taking workers below the minimum wage. So what is the way out? I tell

:58:07. > :58:10.you the way out. Nestl in New York are the best exponent of the use of

:58:11. > :58:17.agency workers. There is a tripartite agreement with the trade

:58:18. > :58:24.unions and they talk on a monthly basis about numbers of agency

:58:25. > :58:35.workers who enjoys parity rights from the first day. You get the same

:58:36. > :58:44.rates of pay as Nestl workers. Fasan Nestl by the end of this year

:58:45. > :58:53.will be a properly accredited living wage employer. They get parity

:58:54. > :58:57.rights from day one. Secondly it is over 50%, if is a statistical fact

:58:58. > :59:03.that over 50% of the agency workers at Nestl end up as permanent

:59:04. > :59:07.employees and thirdly, no temporary agency workers is used and Nestl

:59:08. > :59:12.for any length of time without them becoming permanent. It is properly

:59:13. > :59:23.scrutinise, openly and transparently done. No one is used and abused and

:59:24. > :59:29.thrown out of the door. So why do they bother using an agency? To

:59:30. > :59:39.properly made demands that are unexpected. With there is each

:59:40. > :59:43.other, not do that? It could very at any given time. The differences

:59:44. > :59:50.we're not talking about 50% of the workforce, we are talking about 3%

:59:51. > :59:53.or 4% or 5%. Exactly the same as the care sector. The private care

:59:54. > :59:58.sector. You would go into some of that with use of agency staff

:59:59. > :00:03.Olesen, poor management, lazy management. Fairness is good and

:00:04. > :00:06.decent examples where they would only use agency workers were

:00:07. > :00:15.somebody had called in sick at the last moment. Exactly the same point

:00:16. > :00:26.could you talk about your relationship with ASOS we are their

:00:27. > :00:28.main supplier of agency workers and the having Asian union, I do not

:00:29. > :00:33.think they can be called upon for not engaging with the union. They

:00:34. > :00:38.specifically did not engage with the GMB. And that is not advance of the

:00:39. > :00:42.damage and but, I'm not here to defend anybody apart from talking

:00:43. > :00:46.about what Transline know about. I would like to note that I looked at

:00:47. > :00:50.some stats yesterday and within our sector in the last 12 months there

:00:51. > :00:56.were two and a half thousand permanent roles generated work of

:00:57. > :01:00.February the goals of permanent role. That would equate to around

:01:01. > :01:05.25% of what I would seems to be of core sort of level of work which I

:01:06. > :01:11.think it is reasonable start and does show there is progress being

:01:12. > :01:15.made and TUPE one of our clients that take on the most permanent

:01:16. > :01:22.workers. 4-mac is that a core part of your business to get people into

:01:23. > :01:24.permanent work? It depends on the model for each individual client

:01:25. > :01:31.that yes we certainly are not opposed to acting. I know you're not

:01:32. > :01:36.opposed but is there an incentive for you to encourage people out of

:01:37. > :01:46.agency work in the Commonwealth? Yes there is. Long what does that look

:01:47. > :01:52.like? It varies. It is client specific. 4-mac it seems intuitive

:01:53. > :01:56.to me that naturally you do not want people to be permanent. The Mac it

:01:57. > :02:00.is a continuing cycle. We have attrition within our network and

:02:01. > :02:09.clients have attrition within the permanent workforce. So the idea is

:02:10. > :02:12.within a lot of our clients that agency workers move into a permanent

:02:13. > :02:17.role and as those people leave and for whatever reason, if they're

:02:18. > :02:20.family workers were then agency workers can fill those roles so that

:02:21. > :02:29.recruitment processes already been done. Filippo that as an opportunity

:02:30. > :02:33.to move on. And going back to the point in the first session about

:02:34. > :02:38.umbrella companies particularly in the construction sector, this seems

:02:39. > :02:41.to me as I said before basically a scam to create an extra layer for

:02:42. > :02:48.people to avoid tax obligations and it ends up getting the workers in

:02:49. > :02:57.their pockets. I will go back to team on this, obviously this point.

:02:58. > :03:04.Your own example in the side was probably the best example of that

:03:05. > :03:08.job rather than need be a two-way contract it becomes a four way

:03:09. > :03:18.contract. You have the client and the agency and what it does is

:03:19. > :03:23.usually first of all it is people at such a rate provided by the umbrella

:03:24. > :03:28.company, and in the construction agency there have been agreed rates,

:03:29. > :03:33.hard earned for many years, then people coming through the umbrella

:03:34. > :03:37.company, the agency being the provider and they employ people

:03:38. > :03:41.doing exactly the same job on exactly the same site at far less

:03:42. > :03:45.rates. That allows employers to look around and think what do we do with

:03:46. > :03:51.indigenous workers? We can move those out of employment and employer

:03:52. > :03:55.of mourners people. That creates real social tension between

:03:56. > :04:00.indigenous and migrant workers. Rather than target the poor people

:04:01. > :04:08.are being abused we need to target the abusers.

:04:09. > :04:14.I'm with Steve Turner entirely. It must be outlawed. You absolutely

:04:15. > :04:18.can. The best way to deal with the issue of immigration and migrant

:04:19. > :04:22.workers is rate for the job. Once you come up with a rate for the job

:04:23. > :04:26.you don't get down to where you come from or whether you work for less.

:04:27. > :04:33.The problem with the issue of immigration is that it is stacked in

:04:34. > :04:37.favour of the employer. It's a supply and demand issue, simple as

:04:38. > :04:44.that. Large numbers of people will work for less as in their country it

:04:45. > :04:50.could be a king's or a Queen's ransom, then that is stacked in

:04:51. > :04:58.favour of the employer. Umbrellas are becoming a problem. Up

:04:59. > :05:03.until last April, travel and subsistence schemes, then outlawed

:05:04. > :05:12.were the Holy Grail. You apportioned a certain amount of the temp's

:05:13. > :05:15.wages, as tax expenses around sticked the profits in your pocket

:05:16. > :05:21.but they have been outlawed. But since then there are more and more

:05:22. > :05:25.umbrella company offerings. I got one yesterday. I told them the size

:05:26. > :05:31.of our company, they said if we signed up with them, we could do it

:05:32. > :05:36.in a week or two, our annual profits from using them as opposed to in

:05:37. > :05:43.addition to our normal profits would be ?640,000 a year and their fees

:05:44. > :05:47.would be ?120,000. This is a single branch agency in Earls Court. As

:05:48. > :05:51.they say, you do the maths, and they also claim to be signing up new

:05:52. > :05:56.agencies every week and although they would not give me their names,

:05:57. > :06:01.they said that they had two large agencies on board. Millions of

:06:02. > :06:09.pounds are being leached. In that um Beretta model there is no tax, no

:06:10. > :06:14.employer's NI, no employie's nichlt, everyone lost out. But they were

:06:15. > :06:21.offering wage prices as low as they want. Although I put in the caveat,

:06:22. > :06:28.that David alluded to, for higger paid people, who are contractors and

:06:29. > :06:33.need a vehicle to put their work into, that may not be appropriate

:06:34. > :06:39.but on the lower paid scales it should not be a part.

:06:40. > :06:44.Adrian you spoke about providing temporary unskilled labour to

:06:45. > :06:49.companies and discovered how it is a waiver thin profit margins and has a

:06:50. > :06:54.reputation of being dodgy or criminal. Very dodgy, you said. So,

:06:55. > :07:00.how do you make money, run a business that is successful in this

:07:01. > :07:05.lion's den? I would say I have been in business for 30 years, our agency

:07:06. > :07:13.turns over ?7 million. That is OK. It would be more if we didn't... I

:07:14. > :07:18.have access to between a quarter and a half of our target marketplace,

:07:19. > :07:23.the rest is out of bounds because of cut-price alternatives being

:07:24. > :07:27.offered. We work hard with the clients, giving guarantees, we

:07:28. > :07:31.explain the benefits of a well treated workforce, the lack of

:07:32. > :07:35.reputational risk if they are associated with us and there are

:07:36. > :07:41.companies on board with that. But there are many companies, we cannot

:07:42. > :07:49.get through the a door. How do we accentuate your business

:07:50. > :07:54.models, as to those undercutting competition? Outlaw Swedish

:07:55. > :07:58.derogation. Looking into personal accident and insurance schemes. I

:07:59. > :08:04.can't say that they are illegal, they could be offered free but the

:08:05. > :08:09.amounts being charged imagine is mis-selling insurance. There are

:08:10. > :08:12.steps that could be taken, short of licensing or incorporated with and

:08:13. > :08:24.within a licensing regime. Amanda? And on that vein really, it

:08:25. > :08:29.has been fascinating to listen to the agencies, and I guess, I am

:08:30. > :08:37.thinking of how agencies operate historically. It seems as though,

:08:38. > :08:44.and I go to Jennifer, that maybe I don't resort -- as a result of the

:08:45. > :08:49.inquiry but obviously there are things you examined and improvements

:08:50. > :08:54.made. I want to raise two questions why don't agencies operate that

:08:55. > :08:58.level of des evensy in the first place and the sec thing, what can be

:08:59. > :09:05.done to ensure that agencies operate to that level that they should be

:09:06. > :09:10.operating? It is to all of you but I guess Jennifer first? The question

:09:11. > :09:19.why they don't operate, the margins in the sector. The sector has

:09:20. > :09:29.outcompeted itself. So as has been alluded to, Adrian is priced out of

:09:30. > :09:33.the market, as to operate compliantly, you show X pence per

:09:34. > :09:41.hour, and you expect a client to be charged that but with the historical

:09:42. > :09:45.backdrop and the sector and the expectations from a logistics sector

:09:46. > :09:49.and how the margins look is skewed and there is still a learning that

:09:50. > :09:55.is going on since the April changes of last year. That now is slowly

:09:56. > :10:00.being eeked out, I think you will agree with that? No.

:10:01. > :10:05.I would say that my experience is that margins are coming up. Those

:10:06. > :10:10.people are exposed within the sector but it is a long road it is about

:10:11. > :10:15.where to generate the profits from. I will come to Adrian in a second.

:10:16. > :10:21.You said something around reputation. Is that the shift that

:10:22. > :10:25.you have gone through? In other words cutting your profitability in

:10:26. > :10:30.order to increase the reputation, that will ultimately increase the

:10:31. > :10:35.profitability? I believe so. We are standing at the front saying we are

:10:36. > :10:41.a compliant agency, we want to be seen as a compliant agency. We have

:10:42. > :10:46.had a red flashing light over us, a lot of things were being done but we

:10:47. > :10:52.were not publicising them. We have had a shift in thought process, to

:10:53. > :10:58.think we must be at the forefront looking to say what is our

:10:59. > :11:06.compliancy looking like, are there recommendations, yes, is it in

:11:07. > :11:14.place, yes, how do we move forward that and we probably have a slightly

:11:15. > :11:21.louder voice than Adrian's company. But this is about the agencies as a

:11:22. > :11:28.whole, Adrian you were going to say something? It should not be

:11:29. > :11:33.underestimated that fact that HMRC has a culpable role in allowing the

:11:34. > :11:38.agency world to develop as it has. It does absolutely nothing, or

:11:39. > :11:44.nothing visible to curtail the use of the most outlandish schemes that

:11:45. > :11:50.man has ever devised! It occasionally puts out strongly

:11:51. > :11:54.worded sentences that this model is not viable, there was a scheme

:11:55. > :12:03.exposed by the BBC Two years ago where you split the workforce into

:12:04. > :12:06.hundreds of mini companies to avoid employer's National Insurance, HMRC

:12:07. > :12:12.issued a strongly worded statement saying not to do this, another on

:12:13. > :12:16.the same subject from the Garde last November, we keep getting approached

:12:17. > :12:22.by the same companies and different ones saying that their businesses

:12:23. > :12:28.are going well, HMRC, it was a standing joke at the annual general

:12:29. > :12:33.meeting at the association of labour providers, that they would have a

:12:34. > :12:38.spokesperson every year saying don't worry, be compliant, the

:12:39. > :12:47.noncompliant, we are on their trail, we will get them. They never did.

:12:48. > :12:51.They only redefined redeployment for 180 million for the misuse of travel

:12:52. > :12:58.schemes but that seemed to exhaust them. There were far bigger culprits

:12:59. > :13:04.that everyone knew about and sailed through happily and are now

:13:05. > :13:11.migrating to other models. This one if we took it up, ?640,000 comes our

:13:12. > :13:17.way, and I would have little doubt we would be fine. If anyone was to

:13:18. > :13:21.be taken to task it would be the umbrella company, it would not be us

:13:22. > :13:25.and we would get more business, we would be cheaper. We could treble

:13:26. > :13:29.the news agency a few years. I don't want to do it but it shouldn't be a

:13:30. > :13:33.choice. So ultimately, if the agencies are

:13:34. > :13:40.out to make a profit and therefore to be as cost effective as they can,

:13:41. > :13:41.does it mean it is at the sacrifice of employment rights, ultimately?

:13:42. > :13:47.No. Yes.

:13:48. > :13:56.In terms of the noncompliant companies who are doing scams, do

:13:57. > :14:00.you shop them to HMRC? Regularly. But there is little response?

:14:01. > :14:06.Nothing. Two lines of questioning, Jennifer,

:14:07. > :14:11.the one is in terms of the flex. It makes perfect business sense that if

:14:12. > :14:15.a business wants to compete innas of, in times of demand, that you

:14:16. > :14:21.want to flex up and down when appropriate. But I want a flavour,

:14:22. > :14:27.in terms of the two big companies we have considered and looked at in

:14:28. > :14:33.many respects, Sports Direct and ASOS, I would think, that they are

:14:34. > :14:37.similar, imagine a flurry of activity at Christmas and something

:14:38. > :14:44.in the summer. Especially if England is doing well at something, or

:14:45. > :14:49.whatever. Sorry about that Michelle! Does that make sense and my question

:14:50. > :14:56.is in respect of the proportion of the workforce that flexes with the

:14:57. > :15:02.two companies, what is it? And would that be representative of that

:15:03. > :15:08.sector in general? Yes. The agency that we find in our business with a

:15:09. > :15:15.seasonal cycle, there is an Easter peak if the weather is good, the

:15:16. > :15:22.summer peak with the sales. Black Friday is an impact. Then Christmas

:15:23. > :15:27.and January sales. Lots of variouslies impact those businesses.

:15:28. > :15:33.On top of that it affects our business toos the level of demand

:15:34. > :15:40.The hardest thing for our clients is to know whether you or I will click

:15:41. > :15:43.a button and say if you want to buy it or not. That is difficult to

:15:44. > :15:48.determine. That is the reason that they require the flexibility. Do you

:15:49. > :15:53.buy more at Christmas? Yes. Are you buying more at Christmas than last?

:15:54. > :15:58.I don't know the answer to that question. Neither do the clients. So

:15:59. > :16:02.they need a model in the economy. They can't have a fixed level of

:16:03. > :16:09.over heads through the year to warrant. The peaks can vary and

:16:10. > :16:16.instigate a slight peak by having a flash sale, by many things... That

:16:17. > :16:20.they can effect... But I don't get a sense in terms of what sort of base

:16:21. > :16:27.load of workers do we require and then it flexes. Maybe I am old

:16:28. > :16:31.fashioned? It varies with the additional head count, with overtime

:16:32. > :16:38.required. It is not necessarily a base head count and then additional

:16:39. > :16:42.head count it is all about the supply of us effectively.

:16:43. > :16:49.I can come back to you with that data.

:16:50. > :16:54.So, that would be helpful to extra extent do you flex. And it is not a

:16:55. > :17:00.question of I can anticipate there is a bit of an increase at Easter or

:17:01. > :17:05.Christmas, you are saying that you may have to flex next Friday? Yes.

:17:06. > :17:15.And you provide that flexibility on a daily basis? That is one of the

:17:16. > :17:19.actions that you do? If we know there is a peak period and you are

:17:20. > :17:25.bringing workers into the environment, you must be able to

:17:26. > :17:31.also work it so that the additional workforce is impacted as minimal as

:17:32. > :17:37.possible. So it takes planning. We don't necessarily say we are going

:17:38. > :17:43.up a day per week, our clients try to plan as much as they can to make

:17:44. > :17:48.it as steady as possible. There is a huge peak in... But if we have a

:17:49. > :17:54.glorious summer people might warrant to spend money on clothes and you

:17:55. > :18:00.see the increase. If there is a poor summer, and a wash out of a bank

:18:01. > :18:05.holiday, people will not. You adapt the working rota as a result? Yes.

:18:06. > :18:10.Adapting the working rota and the intake that is required.

:18:11. > :18:13.That is to the detriment of the worker? You could say the following

:18:14. > :18:19.week, it is raining outside, you don't need work? You are discounting

:18:20. > :18:26.natural attrition. Not necessarily that we are hiring and firing at

:18:27. > :18:33.will. There are people who do move out of that working area. And leave

:18:34. > :18:37.Transline on a basis of their choice, no-one is forcing anyone to

:18:38. > :18:41.be there, the roles may not be filled.

:18:42. > :18:45.So what is the level of attrition? I would have to come back to you.

:18:46. > :18:49.The second line of questioning before I bring in Chris, I am

:18:50. > :18:59.conscious of finishing this before mid-day. ASOS, there were

:19:00. > :19:03.investigations by Buzz feed and BBC about annual contracts, flexing and

:19:04. > :19:07.workers being disciplined if they could not commit to short-term

:19:08. > :19:13.announcements on work, has that changed?

:19:14. > :19:21.The Asus warehouse, I believe, is a good example of a warehouse that in

:19:22. > :19:30.my opinion is not someone I frequent that often. I would need to gain

:19:31. > :19:38.evidence from someone. However, yes I do think that if those instances

:19:39. > :19:43.did happen, I believe they would engage with a union. They are making

:19:44. > :19:48.positive steps in that direction. So things have changed? I'm not saying

:19:49. > :19:53.that there is anything from what I know... If there was something that

:19:54. > :19:57.was found in the first place, yes, it has changed. I'm not in a

:19:58. > :20:01.position to answer that question. That is a bit curious, because you

:20:02. > :20:07.are a representative from trans-line and I would expect you to have a

:20:08. > :20:12.flavour of what is going on. Has it improved since the investigations by

:20:13. > :20:16.the BBC and Buzzfeed in the summer? Who drove that? Was at the media

:20:17. > :20:21.attention? Wasn't declined saying, this might be affecting us? Was at

:20:22. > :20:28.Usain, as part of our move towards enhanced reputation, we advise you

:20:29. > :20:39.to do this? And the finance director. -- I only finance

:20:40. > :20:42.director. I was heavily involved in Sports Direct. That is why I put

:20:43. > :20:48.myself forward to give evidence. What I am happy to go away, to take

:20:49. > :20:53.that question away, and come back with where it was, what the

:20:54. > :21:06.improvements were. I do believe my team on the ground work very closely

:21:07. > :21:11.with ASOS. ASOS does have... Our customer isn't actually ASOS. You

:21:12. > :21:15.have been before us before, Jennifer. You sort of know what we

:21:16. > :21:23.are like. Didn't you do any checks with ASOS to see what happened since

:21:24. > :21:26.the summer? Of course. It is not something I'm party to on a

:21:27. > :21:33.day-to-day basis. We have an infrastructure, and operational team

:21:34. > :21:37.that deals with that. I'm happy to come back and answer that question.

:21:38. > :21:44.I do find it astonishing that you didn't do the homework beforehand. I

:21:45. > :21:50.wasn't made aware it would be an ASOS specific enquiry. It isn't. It

:21:51. > :21:55.is looking into agency workers. I believe our team have worked hard on

:21:56. > :22:00.the ground with ASOS to make sure that anything that was found has

:22:01. > :22:05.been improved. Tim, you have highlighted as part of the GMB, some

:22:06. > :22:08.of the working practices in ASOS. I know you are not privy to what is

:22:09. > :22:17.going on. Has anything changed for the better? First of all, I think

:22:18. > :22:21.the silence was deafening. ASOS being a good example of a warehouse,

:22:22. > :22:27.I'm afraid is one of the worst examples. Has anything changed?

:22:28. > :22:34.Things like flexing. Flexing up and down used to happen immediately. Now

:22:35. > :22:39.people are given 24-hours notice. Hardly ideal if you have childcare

:22:40. > :22:45.responsibility. But at least now after pressure from the GMB, flexing

:22:46. > :22:52.up and down, people get 24-hours notice. Secondly, there are obvious

:22:53. > :22:56.answers to your question. An organisation like ASOS, highly

:22:57. > :22:59.profitable, operating at 50% level of agency workers, employ more

:23:00. > :23:04.permanent people. That is the answer to your question. Employers don't

:23:05. > :23:09.want to do that, they don't want to invest in their workers, they like

:23:10. > :23:12.the revolving door. Jennifer's point about nobody forcing people to work

:23:13. > :23:16.for the agency, I think the employment model is working --

:23:17. > :23:20.forcing people to work for the agency. There is no incentive for

:23:21. > :23:27.agencies to encourage people to become permanent employees of that

:23:28. > :23:30.place of employment. And the last thing, because it's been mentioned

:23:31. > :23:36.twice now, and I wasn't going to mention it but I welcome of the

:23:37. > :23:39.union relationship with ASOS. We stood outside ASOS battling for two

:23:40. > :23:43.and a half years. We have hundreds of members who have joined the GMB

:23:44. > :23:48.despite never having been allowed on the premises. Even now when workers

:23:49. > :23:52.they will not let us go on site to they will not let us go on site to

:23:53. > :23:57.represent these people. They would rather pay and hire a hotel room.

:23:58. > :24:03.That is how much ASOS have kept us out. Nick Bates was going to come

:24:04. > :24:07.before one of the commission is the night before but they had signed a

:24:08. > :24:11.deal with another trade union. That was not about pressure of the

:24:12. > :24:15.workers in particular. This is important. That union isn't the

:24:16. > :24:21.choice of the workers. The GMB are the choice of the workers in ASOS.

:24:22. > :24:25.The employer has denied us axis. We have had a lot over the evidence.

:24:26. > :25:09.Much food for thought. Thank you for your time. Order.

:25:10. > :25:14.My Lords, I will now repeat a statement made by my right

:25:15. > :25:20.honourable friend, the Secretary of State for Exiting the European

:25:21. > :25:24.Union. With permission Mr Speaker, I would like to make a statement about

:25:25. > :25:29.the publication of a White Paper on the Great Bill. Yesterday we took

:25:30. > :25:30.the historic step of notifying