Future World of Work Committee Select Committees

Good morning everybody. Welcome to our committee. Just for the purposes

of record, do you mind telling us who you are and which organisation

you are representing? Starting with you, Tim. Tim Thomas, director of

employment skills at the DEF, manufacturers organisation. I'm the

secretary-general of the Unite union. I'm senior adviser resolution

foundation. I am David Kamp, chief executive of the Association of

labour providers. Thank you for attending. We are looking today at

agency workers. Lindsay, may I start with you, and it will be open to

all. Your evidence shows there are increasing numbers of people working

as agency workers, both in terms of temporary work and permanent work.

Could you give us an idea of how prevalent this is, and are there any

particular sectors which are seeing a large rise in agency workers? Just

a start, I want to point out that evidence today is based on the

analysis of the labour Force survey last year and I think there are a

couple of constraints with the source, first that not everybody in

the workforce is asked the same question about being an agency

worker so we have to construct the understanding from the data. The

second point I want to make is that no one in the labour Force survey is

asked whether you are a worker, you are asked if you are an employee or

self-employed, so we have a problem in terms of understanding agency

workers in that they do not map to the three legal categories of

employment status, but what we saw in the research work we did looking

at the labour Force survey is that we could identify three types of

agency workers, and the first are those that say they are temporarily

and they work for an agency which I think is who we broadly accept our

agency workers. The second group are those who perplexingly tell as they

are permanently employed are also agency workers. There is a big

question about who these people are, and it's quite a sizeable body of

people. There are more people in the labour Force survey who say they are

permanently employed agency workers than temporary workers. We have some

constraints on the understanding of that group because the question that

informs us about that presence in the labour market only came online

in 2011. And it came online because it is linked to the fact that that

was the point of course when agency worker regulations were activated

and that was the point when it was possible for an agency worker to go

on to a Swedish derogation contract and be paid between assignments and

have employment status. So there is a sort of presumption that this

group of permanent agency workers in the workforce, which is significant,

came through the process of Swedish derogation, but when we look at the

data it is clear that there is something is going on. We think that

probably some of these people are unpaid between assignment contracts

but we don't think there has been sufficient substitution in the data

to allow us to think that that explains the whole of this group. So

that is definitely a significant group in the population, and

expanding group in the labour force, but I don't have a kind of full and

complete answer as to who they are and we can speculate that they are

people who are agency workers but who are in long-term assignments, so

from their perspective it looks like a permanent job.

The third category we noted was not hugely significant. But important

for the committee to consider is a group of people in the data who

indicate they are self employed and then to indicate they are paid by an

agency and not administering tax and insurance. That is legally a

conundrum. You cannot be self employed and an agency worker but

there is a group of people that fall into the category. It is important

to note that after the research there were many members of the

public approaching us to say we have touched a nerve and almost without

exception they were people who were saying that they were self employed

and agency workers. What proportion of the categories

would the agency workers be? 340,000 people in temporary agency work.

440,000 permanent agency work e and 66,000 believe they are self

employed and agency workers. So adding up to 3% of the labour force.

I mentioned in terms of particular sectors that are receptive to agency

work, we have looked at logistics, warehousing, in terms of the online

forum I have been shocked by how many public sector careworkers are

facing agency work but can you give us an idea of which sectors use the

agency work? Four sect orrors stood out, they were manufacturing,

transport and warehousing, business activities, all kinds of IT

consultancy service and the public sector. They are not all low end.

One of the findings is that high workers are highly adredge news now.

They bring much to the economy. What are the drivers seeing in

respect of the drives of agency work? Why is manufacturing using

more and more agency workers is it for the flexibility? I'm not sure we

are using more, if you look at the growth of those employed in the UK,

I will use the term workers but I use it flexible but people in work

in the UK, we are shy of 30 million. If you track it through those

employed, the graph shows a level track between the total numbers of

employed and those in work. So not necessarily accepting an increased

number of agency workers but increased number of workers in the

UK, therefore the agency workers have increased in number. In terms

of manufacturing it is not Reevenly spread. It is certainly automative,

aerospace, where agency workers are used more. In terms of why the

members use agency, it is a source of recruitment, so you take an

agency later on, and later they become a permanent employee. The

other is for variations in demand. Demand is unfortunately not

predictable at the moment. In manufacturing demand and output is

increasing, which is good news but it could be you want workers for a

period of time before you see that the demand is permanent. So there

are fluctuations in demand. The third I highlight is specialist

skills within the manufacturing sector. We have a crushing need for

more skilled workers, for higher skills and skills that the labour

market can provide. Agencies provide access to the various skills at

times. Before I hand to Steve, in our

sector, whether using an employment agency you are paying a premium. You

are paying whatever the agency is charging for the worker plus the

agency fee. Two ways of showing practical examples of that are at

the time of pensions auto enrolment, some of the agencies pass that on to

the members so there is the cost of the member, the agency cost, the

auto enrolment cost and with the levy, many members are paying the

levy cost for the agency. So not a financial incentive to use the

agency workers but more what I outlined.

That is not my perception, you give a tale of high value, a premium

product, my sense, when we have looked at particular companies,

downward pressure on terms and conditions, virtual exploitation of

the workforce, that is where agency work tends to be. You don't find

that in manufacturing? Not in our sector. Not least because usually it

is individuals and workers, in many case, not all, that have a better

bargaining position as we have short of highly skilled workers.

David? Yes, please, in the association of labour providers we

mainly have a membership of those organisations that supply workers

into the consumer goods supply chain so into the logistics and warehouse

functions and consumer manufacturing and agriculture and historical. It

is a sector in food manufacturing and agriculture which our members

are required to be licensed by the gangmasters licensing authority,

soon to become the gangmasters and abuse authority, so an additional

sector, so in that sector our members and labour providers are the

most compliant in any sector throughout the UK. I would support

Tim as to why businesses use labour providers and recruitment agencies,

mainly, it is because they are a labour sourcing experts, as they

enable flexibility, they enable businesses to use only the exact

amount of workers that they need each and every shift. So it enables

them to control their labour costs. And it's the try before you buy

service, the route into permanent employment, temple to perm as it is

known in the business, it is the most common way to recruit your

workforce. So an assessment of how the individual performs in the role.

In terms of that, David, how do you reconcile with opening comments from

Lindsay Judge it is not a testimony to permanent, that a lot of people

are permanent agency workers? They are, two main reasons for that, one

is because of the Swedish derogation, which is a permanent

contract employment, that is what it is required in the legislation. The

second point is the use of intermediary umbrella organisations,

who are interposed in the relationship between recruitment

businesses and the workers and they require the individuals to be on an

employment contract to deliver that service. There are also a number of

agencies who choose to have their workers on a contract of employment,

rather than a contract for services. I preamble into the point I wanted

to make, I, the piece supports responsible recruitment and good

practice in recruitment. We rank agencies into four categories:

Criminal, those who pay significantly below the minimum wage

and there are many indications of the forced labour in the way that

they operate. Dodgy, those who seek to minimise costs at all levels by

underpaying holiday, not paying SDLP P, opting out of personal accident

insurance schemes, and so on. Compliant, the businesses that seek

to comply with the lead, and leading, those that comply with the

law, have respect for workers and aim to introduce good practice

throughout. That is helpful. How many companies

and what ratio are criminal and dodgy? I don't have a figure... Give

us flavour? Well, the... No. I think is the honest answer.

The criminal ones work in the shadows. Yeah, they work in sectors

where it's very hard to uncover them. The G LA in the sector that

they are in, uncovers individuals from time to time. Once they have

powers to move into other sentors, perhaps we will see more. There is

no-one enforcing at the moment, so it is hard to give a number. In the

GLA sector, the number of businesses who have had their licences revoked

by the GLA has declined year or year. Outside of the sector there is

no classification of it. At the moment there is not a way to define

and to assess who is compliant and who is leading because in essence

there is little enforcement. I don't understand, you came up with

a clear rating system. I got the impression you rated companies. But

you are now telling us you can't tell us who is compliant and who is

not? Who is dodgy, who is not? Is there any idea in terms of the

proportion of companies, providing agency workers who are dodgy? Not

that I think would be correct for me to put on record.

OK. Steve, presumably you do have... And we do! But in terms of respect

before I ask you to discuss this, that I received a financial donation

from the United Union in respect of my 2015 general election campaign.

Thank you. Perhaps we come into contact with the criminal and the

dodgy, I don't know. But there are a number of antibiotics that work at

the lower end of the market and are purely used for exploitative

purposes. Outside of competent and professional agencies that provide

labour has Tim has identified in core sectors of the economy. Where

he identified aerosparks and auto motive, the common denominator is

the unionised factor. And here the direct impact that the agency has

with the client. So we are not seeing that sector in the highly

uniononised. In respect of aerospace and auto

motive, there may be agency for the specialised one-off commission but

there are permanent full time employees well trained and often

members of the union? This was my question to Tim on this issue, you

talk about unpredebilityability of manufacturing at the moment but you

also spoke about specialist skills. You gave me a feeling that was like

50/50. But the specialist skills must be small as a segment. Also,

specialist skills, are these people not taken on as self employed basis

rather than as agency workers? Yes to the first. So smaller numbers of

specialist skills, a greater number of craft technicians, those types of

skills. In terms of how the person is taken on, that is not necessarily

always known to the engaging company, ie, the employer. I use the

term vaguely, you could be taxpayering with a company who is an

agency but not see beyond that. So see a company you are contracting

with. One of our larger members uses up to 30 agencies for different

skills. Clearly they are a multinational company. However they

would not know that the person was employed, or self employed or work

in a service provision company. So the honest answer is we don't always

know. We can guess about it, it is likely that someone that highly

skilled is probably self employed and at a lower skill level employed

by the agency but the honest answer is that the employer probably does

not know in all cases. Steve, we are trying to get a

flavour of the rise of agency workers and to the extent agency

workers are subject to being employed by dodgy companies, can you

give a flavour of that? This group I was talking about.

It is not you! They are a small proproportion of agencies that work

in the sector and we are a broad union that covers much in the

economy, our estimate of the use of satisfaction probably the 1.6

million. There is an underground economy that employs... Where do you

get the figure from? That is our work in the sectors that we operate

in the trade union where we come across a series of different forms

of exploitation, direct agency, casual, full self employment, via an

agency, or whether they are accountable to an algorithm.where a

computer is telling them that they are not as productive as 80% of

their work colleagues and they will not get work anymore but they cannot

negotiate with a computer, that is from a smartphone. These are our

experiences to agency employment. We reckon about 1.6 million. Down the

supply chain, there is abject exploitation. In all sectors of the

economy we see that... You estimate, if I drive for Uber

and my part of your 1.6 million? No, we say you are an employee of Uber.

Bit if I am a casual work on an online platform I am part of that

1.6 million. Agency there is and eat media Greek, but are you equating a

platform to an agency? Years, the platform becomes the intermediary.

Absolutely. -- there is an intermediary. We need to give

ourselves abreast of the modern platforms. Our experiences in

construction, self-employment is rough, retail and care as you have

identified. In hospitality, manufacturing and vindication,

warehousing, logistics, distribution, food and agriculture.

As has already been identified. And of course in education, health and

professional services, in the public sector as well as the private

sector. This is now right, it is a business model choice for many

employers that want to reduce costs and their responsibilities for

employees. They do not see the employee has been caught their

business. They see as being a subsidiary, Griffey to their

business. Perhaps a third party, a third-party logistics provider

employees and direct that Labour. Are you including the NHS? One of

the big issues there has been and locum doctors, highly specialised

charging very high rates to the NHS. I'll be included in the 1.6 million?

They are probably self-employed as opposed to coming in via an agency.

There are a variety of reasons why legitimately perhaps companies might

want to use agency level, we recognise peaks and troughs and

seasonal work. So NHS trusts said to me that the reverse is true, they

are being exploited. Effectively they are being held to ransom

because they are having to pay more for cover. Because they do not train

enough professional staff that they need in order to operate an

effective NHS. There is a choice. There is a choice particularly... I

wanted to add that when we looked at the data on the and we could compare

a similar worker who was an employee and one with an agency, there was a

paid penalty of 22p per hour but when we looked at the income

distribution those in lower paid jobs were suffering a bigger pay

penalties than those further up the income distribution so even the data

is speaking to the point that this is a heterogenous group of people

and there are certainly some agency workers who are doing quite well,

thank you very much and others clearly are not. That is very

helpful. Amanda? I have a question to follow on. First of all you were

talking about your criminology or dodgy, and different types of

aliases, how do employees choose? Do they actively choose somebody that

fits the employer? There were two others as well, compliant and

leaving. Certainly within this sector that we represent there were

two factors that businesses used to take into account. The key factors

were price and ability to fulfil and supply. Certainly within the sector

we work in, compliance, and the ability to demonstrate you will not

bring your customer's reputation into any damage has become the key

part of the selection process. So there are a number of processes and

due diligence processes that in this sector that is regulated by the gang

masters licensing authority businesses will go through to make

sure that businesses are compliant first being dusted have the gang

masters licence? Bell so does that mean that the dodgy agencies your

document will I default bypass this? They will move into other sectors

where there is not enforcement. Outside of the GLA sector pretty

much an almost absence of enforcement in the UK. That goes to

the heart of previous evidence given in relation to sports direct and

trans-line that but then appeared in a different sector. I understand

your hearing evidence from them later. This is a business model.

This is a business model, it is a method of choice across all sectors

of the economy. I can see the benefit for the client and for the

agency in terms of their own profitability and their ability to

make a profit but I struggle to see the benefit for ordinary people

working for agencies. They could get a job. He gave a number of good

positive reasons for an employee and employer to benefit. I do not meet

many employers that see the benefit. I don't mean to them and I do not

fall to them when I go out and speak to them. I do not get non-exploited

employees come to talk to me about the way they are treated by an

agency and they are debarred from enforcing their employment rights

very often because their employment is on short hours or zero hours. And

we need agreements to govern and now they have employment tribunal fees

that are often more expensive than the claim they try to benefit from.

Doesn't always equal explanation? Not all of them but that the

majority are employed by clients to reduce costs. If you take out the

agencies profit margin and you take out the reduced cost to the employer

by default the cost saving comes onto the employee and the employee

then suffers, being employed on very short-term flexible contracts

including zero hours. Not the sole experience of sports direct and the

366 minimum contract. Just want to follow up. Slightly

different perspective. I was interested because you are only

going to be seeing a certain type of agency employee. So in a way that is

not the full spectrum you would acknowledge. We deal with very

highly skilled employees, in finance, manufacturing and

engineering. Very highly skilled and sought-after. We recognise that and

we recognise the demand for those. We have in this country for the

first time in my life as close to full employment as I have ever seen.

The issue that we have this not one of workers having no choice we have

one where the biggest issue that faces our sector is we cannot find

enough workers. There is choice. Workers are not bound to work for

one particular agency. They are able to leave and work somewhere else.

Agencies known nowadays and this is a response, yes I agree to supply

and demand, that they have if they want to, to hold onto their workers,

if they want to demonstrate the clients that they have reliability

of workers, then they have to treat these workers well. Yes I agree this

has been a learning experience but that is what we are seeing now. It

is not the situation that seems to be being put forward that every

agencies out to exploit their workers. They would not continue in

business. Just to go back to the original point, in terms of why

people use agencies, I have heard you say it was like the business

model, what you're saying is it is not actually less cost, it actually

business sense. Absolutely. The money to pay workers, national

insurance, basic pay, holiday pay, sick pay, and the apprenticeship

levy now, that can only be charged to the client. It doesn't magically

come from anywhere else. That is a cost that has to be passed on to the

client, and on operating costs can sometimes goodness forbid a little

bit of profit as well. That is a cost venues to be passed on to the

client. The client makes the decision to use an agency, because

it brings them a business benefit. If it didn't they wouldn't. Any

other comments on that? Reuse agencies to stick the blindingly

obvious because we need people. In my experience there is no financial

incentive. It actually costs more because the one costs are paid by

the end user, the client, plus a margin. That is why we use agency

workers, this is not a zero-sum game. The idea that somehow agency

is all that is quite clearly incorrect. I would not sit there for

a moment and safe it is all fine, clearly there is malpractice, Steve

have indicated that but it is a bit like saying the dentist, are all

teeth rot and pretty much he only sees rotten teeth because he is a

dentist. But from my perspective, agency costs are increasing, not

decreasing and if we didn't have agency workers what would be the

result? It's not necessarily that we would employ more people, as David

said, in our sector actually the result is business Michael Gove

somewhere else. That broadly means the EU. I cannot speak from direct

experience but with another piece of research on the table, done by the

National Institute of economic and social data, who looks at the

presence of agency workers in the workplace and they point out the

fact that when you have agency workers in the workplace you tend to

have an unhappy employee population. I completely accept what others were

saying about the reasons firms are using agency workers, around demand

fluctuations and managing costs possibly not having the hassle, but

clearly there is a disciplinary element in some cases. What this

research was showing is that having agency workers present was

unsettling for agency workers but also for employees who for whatever

reason may be because they felt that was the way their work was going.

That is interesting, people felt unhappy working next to agency

workers. An agency worker presumably chooses to be an agency worker? That

is an interesting question. Others have made this point around choice.

One of the things we showed is that we could not see a lot of regional

variations in the data but that is because we were looking at the

constrictions of the data only at the very highest level, Wales or the

north-east but one of the things we know from talking to people and

other research is that you get very strong concentrations of agency

workers in particular local economies. If you cannot move very

far for whatever reason like children particular set of

constraints then maybe your choice is quite restricted. If there are

local economies that are quite mono industry focused then do you have a

choice? I am not sure you necessarily do. Is there any

evidence of agency is treating workers unfairly? To repeat what

Steve said many of our members are heavily unionised, collective

agreement with the agreement of the trade union, it is difficult to say

that as an example of where agency workers are in any way being

exploited. So just for clarification, whether businesses

are treating agency workers differently. The employment agency?

Are the businesses treating the agency employees differently? Do

they feel as if they are treated differently? My experience is not in

our sector. There are some businesses who don't treat agency

workers as they would their own. The agency worker regulations that came

in in 2012 sought to rebalance that. I see no particular reason why an

agency worker should be discriminated against solely on the

reason that they are an agency worker.

I ask the inquiry to look at that protection but certainly there are

legal ways with the Swedish derogation whereby two workers

working next to each other, doing equal work of equal value can be

paid a different rate for the same job.

Can I ask, and maybe, Steve, will want to respond to this. And I will

bring Anna in. We have had an online forum to encourage people to give

their experience, good and bad. We had somebody called Shaun who wrote

to us: I work at an agency and trying to ascertain why we don't

receive the rights and parity after working in a particular role for

more than 13 weeks. Agency workers have inadequate protection from

mistreatment and no defence against union-busting tactics. This prevents

workers pushing for fulfilment of their rights or improvements in

their terms and conditions of employment.

So, there are many good points in that. Firstly, we need to make

workers rights more clearly understood. More simple. So let's

bring Lord De in, ning up-to-date, so that the man in the uber taxi

knows a what rights he is entitled to. So they know their rights get

advice. How can they get advice? We have something called ACAS, let's

turn that into the employment helpline and publish it, as people

don't know what it means. Do workers have access to kennel diwithout

going to tribunal? I don't see it, so how can workers get something

corrected? And who can they go to? There are lots. And are these rights

enforced? No, so these are all things within the realm of

government, these are not within the realm of business but within the

realm of government and within the realm of this inquiry to make some

great improvements in how we manage this issue in this country. Thank

you. Any other comments before I bring Anna in? I wanted to make the

point, we see this often as being a direct job replacement mechanism.

That's the reality on the ground for ordinary working people who are

surrounded often by agency workers and casual workers and others that

the employer has brought in at worse terms and conditions than the direct

workforce. So seeing themselves in a fearful and a vulnerable position as

being the next group to be outsourced to an agency. It's the

switch, really, between direct and indirect employment it would be the

case there would be 9095% direct employ years with the 5 to 10%

fluctuation via agency. That has switched to many sector of the

economy, so now some pleasures have a 90% agency and a 10% core. There

is a reason, why? It is cheaper. That is our argument and experience.

The agency workers will directly employ and excerpt the Swedish

derogation, which allows them to pay the minimum wage as opposed to the

rate for the job with the colleagues that they work alongside. Statutory

minimum holiday entitlement, not paying the correct pension

entitlement so, the control is in the hands of the agency employer and

the supervisor on the ground who does not have to go through due

process or appeals process or union recognition, simply not providing

more hours for the employie, and therefore they become unemployed.

Anna? In terms of cost, do you have a break down of what it costs to

employ. The differences between employing somebody though an agency.

You say it is cheaper but what is the reality in terms of cost? We

have experiences of in excess of ?5 pound between agency and direct

employees. The cost to the business? Often

these are confident shall employer-client agreements. But we

can ascertain a good estimate as to the cost savings to the employer and

the employer on the savings National Insurance contribution. A little

spoken about scam in the employer's market where you employ people at a

decent rate for low hours to keep them under the National Insurance

threshold or pay them for a 38 hour week but at a low threshold. So they

are not paying National Insurance, so that pushes them outside of

benefits. But the employer is not playing the employer's national

insurance contribution. Which at 17.813.8% is a sizeable cost.

That is an unfair competitive advantage that they find themselves

in against the responsible employers who want to directly employ, to

train young people in proper apprenticeships, who want to offer

decent terms and conditions and who recognise Yoons. And then are

undercut by a fly by night employer who wants to employ at the least

possible cost at the biggest cost to the employie, the worker at the end

of the day. Anna? Thank you, Chair. I was going

to point out what you said. My experience in my questions is that

this is not a choice for them in the employment market. This is that all

is available. They are forced to take the contracts that are less

well paid, insecure, no control over the hours and this is increasingly

the nature. I don't recognise the comment made that we are almost at

full employment. In an area like mine, there is high unemployment.

People are des rate to get work. It is a race to the bottom. The point

to ask, that we have not spoken about is the impact on people

working in agency work. How do people, there has been a discussion

as though it is a choice for people to understake this work but how do

people get out of it? What is the route out for people? What is the

impact of being an agency work on financial and social inclusion, the

impact on skills and career development? Can you say something

about that? It has a huge impact on a person's social and family life,

and financial well being, the amount of hours you work, the money you are

paid for the hours, it is a direct impact, to pay the bills, rent,

phone bill or putting clothes on the backs of your children and putting

food on the table. We see example of inwork poverty, suffering from

inwork poverty. Not doing 30 or 20 hours and perhaps could do more, as

state would like you to believe as the threat of sanction as you are

not working hard enough to work harder but this is the reality,

there is no choice. The only access into work is a vulnerable insecure,

low paid, often minimum wage job with complete power and control in

the hands of the employer. Often on zero-hours. You don't know if you

are working tomorrow, let alone next week. We have examples of people

working to a smartphone, advised there is placement for 50 workers

tomorrow, the first 50 to respond at 11.00pm may get the job. 25 turning

up to be told then, they only needed 25. To keep an eye on the phone.

They are not paid for the travel time, inconvenience and they are not

paid for the work for the day. That is our example of modern day

practices. And that end of the market is growing. It is covering

all sectors of our economy. And can I ask, how can you sort the benefits

of this? We work at that end of the market. I can honestly say that

around the country it's probably about 90%, 90 to 95% migrant workers

who fill these roles. So this picture of high unemployment levels

and local workers coming into agencies is not something that I

recognise. So... The construction industry in particular? It may be as

my focus is historical and food manufacturing so, it may be

different. I can't claim to know other sectors but what I would say

is that it's, business is hugely competitive and to run your business

on the figures that we are hearing of 90% temporary workers, it isn't

anything that I see. Businesses make decisions about how can they run

their businesses as efishently as possible? How can they run

effectively as possible? How do they improve productivity? That requires

to having a core workforce that you can invest in, that you can build

in, that you can rely on and using a proportion of agency workers to meet

the flexible requirements that you need to manage your business costs.

Have you ever met anyone whose aspiration in life is to be an

agency worker? But I have met many people for whom it is a ready and

accessible route into work. You can come into this country, you can go

into an agency and you can be working in two day's time. And you

are earning money. You are accruing holidays from day one, you are paid

properly and it gives you that initial core stability to make the

next transition in your life. Market forces are such that we have a

labour shortage. I accept in certainas of the country that's not

yet the situation. I can understand about Teesside. What we are seeing

is certain businesses actually wanting to secure their workforces

for the future in these changing times and to make sure that they

absolutely have a workforce to see them through the next year, the next

two years. That's how the market adapts to changing circumstances.

Can I ask, Tim, then, from a manufacturing point of view... What

can we do about this, the first question. The answer to that is

training. So in the north-east, our members are short of engineering

skills as any part of the UK. I know our members in the north-east trade.

One member opened a new apprentice training skill. Are they agencies?

No, they are members, employers. So my answer to what to do about that,

I accept what you are saying, there is a route into a different form of

work, offering 75% of members apprenticeships it costs our members

?100,000 to train an apprentice but it is a route to not just a job but

a career. So in terms of what we can do, the answer is train, skills,

higher skills, a better paid job. Surely agency working is the

antithesis to that, there is not vichlt in skills, the longevity.

Surely agency working is working against that? There are two points,

one, the point that David made, that our members see that experience.

Someone arriving in the UK, you do a right to work check, they could be

working within days. I accept that point. But it depends on what your

work is. If our members take on someone at an employment agency,

they will often recruit them. If they want to do an apprenticeship

they will pay for it. There is a route into better paid higher

skilled work through employment agencies. It will depend on the work

you are doing. I accept, the point behind the question, if you do some

work for an employment agency, you are stuck in a tumble-dryer going

around. Other work via an agency, it is a route to skilled work. And

something close to my heart, umbrella companies, I wonder if

those on the panel would like to say something about umbrella companies,

how they are used, the impact on the competition and the impact on those

who are losing with this establishment? It is difficult for

our members to have good visibility of the use of em-Birminghama

companies. A often you use an agency, a company, seeing what is

behind it is not always observe. It could be annum blessial consider or

a service provision company but not always see it as an employer. So a

lack of clarity creates an environment where companies are

flourishing, creaming money out of people's pockets. I have seen people

coming to my surgeries, where they are losing 30, 40 pounds a week and

they cannot explain where it has come from.

There is a deduction from the invoice, there is a clear need for

transparency in the terms you are engaged.

Before coming here today I had a look at the differences in worker

status, I found 83 metrics where there is a difference in status

between employee and worker, not dissimilar to the point you are

making it is clarity and transparency.

Umbrella companies should be prohibited. There is no place for

them in the 21st century Britain. Another they had of exploitative

work, where the employers are exposed. There is no call for it.

They are often double charged for the management company that holds

the business that does not exist, the sole employee, and the director

of the business, and the beneficiary of the dividend, which is a wage.

This is perverse. In the construction industry, I understand

it in Teesside but elsewhere, this is widespread. It should be clamped

down on. It should be clamped down by the government and by the

clients. They have the role to understand the employment models

used in this chain. There is no good saying you employ A, B, C but not

interested in the second or third or fourth tier employment and the

method of employment that they are under. That should be challenged.

There should be proper transparency. That these employment models have no

place in 21st-century Britain. I would like to allow Amanda in.

Talking about the online forums, I would encourage you to go onto the

website. Mark said we are now forced on to umbrella company pay schemes,

the wage varies wildly from one week to the next. If you enquire about

the discrepancy of met with reasons Stephen Hawkins would not be able to

comprehend. This is par for the courts. He goes on to say we now

also have to pay National Insurance and ?23 a week just to receive a

wage. What other job do you have to pay ?1000 a year just to get paid?

Again, David, is this par for the course and if it is how do we

regulate against an scoop this umbrella companies? Umbrella

companies do not tend to operate in a sector licensed by the gang

masters licensing authority because there is enforcement. The

Association of Labour providers has known relationship with the umbrella

companies. It is interesting to note that in German legislation there is

a ban on what is known as chain leasing in that there should be no

more than one supplier between the worker and the end the air so it

might be worth an enquiry looking into legislation in that country.

There are some I believe individuals who choose to work through that

route. I was given the example of HGV drivers for whom there is always

work available. They choose to work through that route because of the

tax advantages it provides them personally methods are being

employed through PAYE but as I can say we have no relationship with

umbrella companies. I have a couple questions for Steve will stop

obviously the last time you gave evidence to us was in the context of

sports Direct and I was wondering in terms of your perspective, how have

working conditions of agency workers changed since you gave us evidence?

A bit of an update. OK, bit of a mixed picture at full strength after

the session. There were a number of constructive changes for employees

on course Sports Direct employee 90% of the warehouses agency workers not

as employers. They are still 1366 hours, which are effectively zero

hours contracts. After the end of every you are zero hours contracts

you are exploited in every fashion that zero hours and one that brings

about and we have documented that. The removed zero hours contracts for

direct employees in their retail operation which was a welcome move

for those 8000 employees which does demonstrate the ability for

employers to offer guaranteed hours and not to exploit on zero hours

contracts or to fall down the drain in terms of the business if they

were forced to do so. So strict did remove the sick strikes and you out,

how they exert their authority over the contracts as a client company.

This is a business model last we have said, in terms of the agency

workers themselves there has been no change will stop I know you will

receive evidence from trans-line. We got a ?1 million back payment for

nonpayment of the National minimum wage and trans-line have refused to

pay that. For the period of employment that employees had before

translated over the contract. The refused to honour the transfer of

undertakings regulations. This is a huge issue for workers where other

agencies on the agreement in full. Sports direct paid in full the back

page commitment but one agency, trans-line has decided that it will

not deliver. It views itself not possible for the employment period

of blue Arrow before it assumed the contract. Under the transfer

regulations it is absolutely responsible and should pay and

should be forced to pay five HMRC. That might the question you might

want to ask trans-line. This is an area of interest for me. We have got

trans-line coming in as you point out. It is a chance to go on the

record, what you anticipate they will say to me about your comments

here and how you will counter this it is almost like they are slightly

the wrong way round. Would you anticipate they should say when they

appear later and how you are about in and specifically what evidence do

you have the support of the bottle? I'm not sure what trans-line will

say. Verstappen support a rebuttal. For payments that were endured

before they became the employer. That is what they have said to their

employees. They are not responsible. We disagree on that needs to be

enforced but unfortunately this is an HMRC enforcement action and it is

usually under resourced, that is another issue. Proper enforcement of

statutory rights. . The point you're making was that the

between Sports Direct to the agency effective agency workers was clearly

established because they were able to remove the sick strikes and

you're out. Regardless of trans-line or blue Arrow they are still

overseeing the accountability. Absolutely, the client should force

them to do that and may have chosen not to. I want to come back to

Transline in the second but are their any other things in terms of

working practices and what of the key things they still need to

address? We put forward proposals to Mike Ashley directly as CEO of

Sports Direct for a transition of agency workers to direct employment

and it has gone nowhere. Sports don't currently working on the basis

they will transferred ten workers a month. There has been no movement on

collective bargaining arrangements. We have also put forward proposals

for access to the agencies because previous correspondence we had had

from the agencies was that they were only willing to meet with the

agreement is for strike. An explanation of the power of the

client has over the agency. We put forward proposals for an open access

agreement to agency workers and that is gone nowhere. There is no

transition period, no agreement on effectively zero hours contracts...

Rulli there is a mixed message, where Sports Direct were directly

responsible and it was in the public air they have taken action where

they are not responsible for the replacement of the as the client and

where it is not in the public domain no action has taken place. So you

have pre-empted the second question about trans-line, you have given me

on the area, talking about agency workers generally? Transline is the

agency responsible at Argos distribution where workers were paid

significantly less under the exploitative use of the Swedish

derogation than direct employees at Argos. I understand they are losing

contracts in various is the fun. They understand there will not allow

you as a client to employees agency workers and various areas. We are

trying to deal with exploitative of one month wherever we find it. And

we will hold them to account. Not just in terms of organising their

employees and trying to get decent terms and conditions for all

employees, other workers can fall through the net. The worker often

gets neglected and pays the price. Also we will expose it publicly has

well and if we can make toxic zero as employment to the extent that

zero hours become band in the UK have they have been in New Zealand

recently, it is not impossible to do this. All of those companies that

said we would collapse and fall in the this if we could not employ

people in the most exploitative way possible are still operating in

Auckland and Wellington very profitably. The workers are now on

guaranteed hours and have access to trade unions and trade unions have

access to workers as well. By statutory right. Whether recognised

in the workplace not. Which is proposal we have put forward in

terms of our evidence that trade union should have access. Trade

unions are a huge resource in terms of enforcement as well. We have

offered our shop stewards and our health and safety ropes to the

Health and Safety Executive and the enforcement bodies to no avail. We

have thousands of accredited shop stewards that could be the eyes and

the years of the employment enforcement bodies and enter these

workplaces and talk in confidence to workers to enable us to expose and

bring actions against those who exploit. Thank you, I think you're

going to trade unions?, convert those nicely into what Peter has

questioned about the role of trade unions. Steve, when we visited the

sports direct facility we visited the Unite facilities on the way up

and spoke about the fifth is frustration is your regional staff

had in getting access to the workers but also in having access to the

management as well just to talk about what was going on and the

rights of people who were agency staff. You said earlier in your

testimony that the world of modern work is evolving rapidly will stop

is the world of union representation evolving rapidly enough to keep up?

Or is it a question of trying to make work more like it has been in

the past in order that you can represented in the way you always

have done? I think work is changing rapidly and I think trade unions are

adapting as best as we can and as quickly as we can to that. We are

trying to go digital of course to catch up with the Digital economy

and we are trying to find ways in which we can engage with workers

that do not have a work most of which there are many tens of

thousands now, employed as we have said on an algorithm as opposed to

in the workplace. Union representation is falling and it has

been for a long time and you have not been managing to stem the flow.

Why is that? Why are people not drawn to the union movement. Why is

it you are not able to attract them? Will comeback to agency staff which

is a specific problem that in general terms people don't seem to

be turning to unions in the way they once were. Trade unions and has a

job intent on making itself relevant to new groups of workers that do not

on the trade unions as relevant as perhaps traditional groups of

workers may well have done. We are trying to do that and we have

established an agency in precarious work unit that draws testimony from

workers and try to stick to represent the workers and find ways

of collectively organising them. The reality is the state has become

increasing hostile towards trade unionism. It will be increasingly

helpful if TUPE had reconstituted into its own role the commotion of

industrial relations on collective bargaining. That was removed a long

time ago. Perhaps the state should look at that again. We have put

forward proposals for collective bargaining to ensure there is a

baseline of common terms and conditions that you cannot fall

below beyond the National living wage or the national minimum wage

across core sectors of economy. We would to see a return to that,

collective bargaining is the single biggest, it gives us the single

biggest ability to address in work poverty and growing inequality in

our country. Agency staff are probably one of the

most disempowered group of workers that we have in our countries in

terms of statutory rights, in terms that a high percent are migrant

workers, lots of factors make them disempowered. How do you represent

them when many of them are only working on two, two, or three week

contracts? You can't be a member of unite then? You can. As automation

kicks in, people will go in and out of work, people need reskilling, we

will have to discuss issues like the guaranteed minimum income.

I understand that but the union status, there are the statutory

side, and then passing the laws and granting access for people to have

the rights to be represented in the workplace and also you must adapt to

the modern workplace, where people are working in several different

workplaces in the course of one month if you are an agency worker,

you could be working in several places in the course of a week, how

do you you as a union adapt to represent people flitting between

work spaces in the space of a week? We do that. We are adept with

dealing with the issues that our members raise with us, whether with

an employer or client. If employed by the agency, the issue is raised

by the agency. We find ways to best represent people with the resources

that we have got, and the demands that they have on us. We do that in

a changing economy. Of course we adapt. We are up for that. We are

investing heavily in dealing with the digital economy and to engage

with working people so that they see the benefit of trade unionism. We

need the state to open the access to workers. We are not even approaching

employers for recognition agreement, we are looking for access. If we can

access workers, I don't find the workers hostile to trade unionism, I

find them fearful if they are working for an employer that is

hostile to trade unionism, and a form of collective organisation or

representation and there is a lot of that in the agency field, where they

see collective organisations as being an interfeern in their ability

to exploit. If that is interference of exploitation, I am proud to get

up and interfere with their ability to exploit. So, there is also,

considering the volume of people working in the facility of Shybrook,

a lack of demand to get you in there but pockets of people seeking your

representation, how do you turn had relationship around? What does it

take to get union representation within a place like Shybrook? I am

hopeful I will be able to appear before the committee with Mike

Ashley, talking about how exemplary an employer he has become. But I see

that as a long way of. Are you in dialogue? Yes, with him

and the company, Sports Direct. But the reality is we have had to find

new ways of organising workers, mainly migrant workers from Eastern

Europe, where English is a second if not third language, we are

organising them in their communities as we don't have access to the

workplace. People are fearful about approaching us outside of the

workplace as they could be picked up on a security camera, or identified

as pro-union and wants to do something about the conditions in

the workplace and they could not find work anymore. So we are

organising in their communities, front rooms, church halls, villages,

with wherever we can. Meeting on the bus to and from work, talking where

we can and engaging and finding people that will develop a

collective organisation inside Sports Direct itself. We have been

successful of that. As successful as we would have liked to have been. As

a trade unionist looking to grow our arm but this is not just about that,

this is about dealing with obscene injustice in the workplace, that is

a bigger responsibility we have as a trade union movement and you as

Parliamentarians as well to address grows injustice, unfairness and

abuse at work. Thank you.

David, one follow-up question, do you acknowledge there is an

imbalance between the rights of agency workers and the needs of

employers? I think in all of the answers that have been put to you

until now regarding the challenges that the individuals face in the

workplace in terms of having rights, most of the answers have come back,

say there is a demand for it from employers. We accept that the

employers need flexibility. Do you accept that with increasing

flexibility requires a different way of empowering the worker? I think I

would agree with that. I think if you were to ask most

people, the vast majority of people what the difference between the

rights of an employie and the rights of a worker are, they would be

hard-pressed to bring out the 83 points. One point I would make is

that we have an ACAS code of practice on disciplinary and

grievous procedures which applies to employees only. It's a three-strike

process, written warning, final written warning, dismissal. Not a

six-strike process but three strikes, yet there is no code of

practice that covers the rights of workers and agency workers. We have

a number of gaps like that throughout our legislation. I think

it's correct to say that union recognition amongst agency workers

is low and I've worked with trade unions all of my career. People make

a decision to join a trade union, often, what will it bring me? How

will it help me? That's the message that I'm not sure is getting to that

group of workers. I think with this inquiry and with

Matthew Taylor's review, we have a unique opportunity in my lifetime to

redress some of these rights and to equalise some of these rights. To

look at the gaps. There are hugeas of employment law

which are not clear with regard to agency workers and with regard to

workers and that's why I so much welcome this review. I hope that we

can all work together to put, to re... Readjust this balance.

If we look back to 2008 and the huge unemployment and how we have come

over the last few years in getting people back into work, I think

that's something that as a nation we should pay high regard to. But I

think now there is a time to look at how can we ensure that those most

vulnerable in our society, and this is not just agency workers, I know

we are talking about agency workers today but I work in many of the

lowest paid supply chains in the country and I promise you, the

exploitation I see is much worse in other sectors than in the agency

worker section. But I think it is a lot of work to do to ensure that

workers know their rights, that they have access to learn what they are,

and access to remedy whether or not they are getting those rights. I

think we have a unique opportunity to address that.

Thank you. A small question for Antoinette.

You spoke about licensing, is it appropriate to licence the agencies

and extend the remit of the Gangmasters' Licensing Association?

I was on board with the Gangmasters' Licensing Association from 2005 to

2015. I'm a strong advocate that they have done of working in

partnership with business to work together to improve the rights of

workers. So I am a strong advocate for proportionate regulation. In

reality, it comes down to enforcement and enforcement with

teeth as a deterrent and as a regulation by reputation. The

challenge with the licensing model is that it doesn't come cheaply. I

would certainly advocate exploration of some kind of regulation in

certain supply chains that we see in the UK.

Which ones? Car washes are the obvious example that have been

given.as where we have seen higher levels of modern slavery than we

expect in other supply chains nail bars have been mentioned. Yes,

agencies to some degree, especially where they are supplying work, where

the challenges, how to do fine the sectors. I have never come up with

an answer. How do you define this vulnerability? But I think some

clever minds put to it could advocate that. And I strongly

support the position of Sir David Metcalfe into the director of the

labour market enforcement role and how he has taken a wider perspective

on enforcement. And there is a lot of work that could be done in

shifting the national minimum wage enforcement teams' focus from being

complaints-driven to intelligence-driven. And a final

question, I would appreciate a single sentence to the final

question, which is if you could provide one recommendation to us in

respect of our inquiry, the balances, the needs of firms to

respond to market conditions but also ensuring that workers have

dignity, have security in terms of their terms and conditions as

possible, what would you suggest to us? David? I will start with a

simple one. It is a tricky question, I think a defined satus of agency

worker. Thank you. Lindsay Judge snow

Increased investment in the advice sector so people are able to enforce

their rights. Thank you. Steve? Employment rights

for all workers, irrespective of what your work may be. Category

blind. And restrictions on agency work to what is really agency work,

temporary work, not permanent. Tim? Clarity so people know what

their status is. Thank you. It's been helpfulful and

stimulating. Thank you very much for your time. We appreciate it.

Thank you for coming to give evidence. We are very grateful. Can

I ask you to start by giving us your name and the organisation you

represent. Starting with Ben? I am Ben Groefr, an external policy

adviser for the Association of recruitment consultancis. Aid ran

Gregory, director of a local recruitment agency based in Earls

Court who supplies generally lower paid staff to the logistics,

distribution events. Jennifer Hardy, director of...

INAUDIBLE I have worked with the GMB for 37

years, working in the private and public sector, working with agency

workers, trade union members and not.

Aid ran, may I start with you. Your written evidence to us was

extraordinary. Which is a reason I asked you to give evidence: Having

spent 30 years in the business, I would go further, this is what you

said earlier, to suggest that my particular part of the recruitment

industry, dealing with unskilled staff, operating with little regard

for the law and no ethical considerations, a pernicious

cocktail of inadequate, impractical and muddled levelling sleighs,

combined with a complete disregard for the rights and the welfare of

the temporary staff who earn agencies their money has led to mass

exploitation coupled with huge tax avoidance. That's an astonishing

statement. Let's try to die sect some of that. Inadequate, what do

you mean by that? Inadequate legislation. It says inadequate,

impractical and muddled legislation so. Inadequate? Can I give one

example. There are many but if I give one, otherwise we could be here

for a long time. The Swedish derogation has been banded around

but I don't think many understand what it means. If I explain that, it

is an example. Where the agency worker regulations were introduced

in 2011, the aim to give Tim rather agency workers who have worked at

the same clients for 12 or 13 weeks or more the same pay and basic

conditions as if they were a permanent member of staff. That was

an EU directive. The government in this day allowed the Swedish

derogation or paid between assignments model to be included.

David would know more but the aim of that was to satisfy people higher up

the salary scale such as IT contractors and so on, the aim to

opt out as an individual of the equal pay part of the regulations

but in return you were able to, you had to be paid when you are out of

work for a minimum of four weeks but basically indefinitely until the

contract was ended. Before the regulations were

introduced I remember going to a seminar that implementation of the

Swedish derogation, my life can be exciting times. During the course of

that whole seminar busting a whole day there were huge legal

discussions about how you would implemented, the agreements you

would have to have with your clients to satisfy the pool of money so that

people be paid, so on and so forth. I remember coming out of a meeting

thinking people will never use this model, this simply doesn't work. I

had completely underestimated the deviousness of my own industry and

what happens in a widespread area particularly in the warehouses that

employ hundreds and possibly thousands of workers is that

effectively everybody is working on a Swedish derogation contract has

given up their rights to equal pay and they do not get paid when they

are between work. A brief example, I was part of a delegation to see

Chuka Umunna about three years ago, various Liverpool MPs and city

councillors were looking into practices in a large well-known food

company in Liverpool. They had a couple of individuals who had been

working there and the spokesman had been there for six or seven years

working on minimum wage and all sorts of other things going on that.

In particular with a Swedish derogation. When the meeting took

place he had been out of work for six or seven weeks. Every two, three

or four times a day he would get a text of his agency and the agency

would say work available, contact us now. Every time he responded they

would say the word had gone. This has been going on for some time.

What was the point of all that? I point out he was one of our 500

workers there. The whole point of this was that in order to qualify

for pay between assignments under the Swedish derogation you have to

be available for work at all times so the agency had a system whereby

you could get a text message at 2am saying there was work available and

you are expected to get up and say yes you are available and in theory

to work. Obviously it was evident that there was no work actually

available but they had to keep giving these invitations to work

just so they could say to the temporary worker we didn't pay you

between assignments because you didn't respond to the text message

at 2am on Saturday morning there for you are in breach of contract. They

even had a belt and braces clause whereby if you did reply to every

single text they would offer you six-hour training and Blackpool, 15

miles away and would take two buses and two trains. That is how there

was work and that is how the Swedish derogation was widely practised. I

have never come across an example of any temp being paid anything when

between assignments. That is for legislation in my view. Tim, do you

recognise this pernicious cocktail, in advocate, impractical, muddled

legislation, with complete this regard for the rights and welfare in

the very people who earn the money which mark is this what agency

workers want? That is the world not just of agency workers but of casual

employees and we have to look at this in a far rounder sense will

stop I know the committee on to focus on the use of agency workers

but we talked earlier about the world of work and it is changing but

the direction of travel for employees and workers is one of

categorisation. It is agency work, zero hours, it is gig economy

employment. All casual, with no guarantees. It is either very

flexible or utterly and flexible. What I mean is that for the employer

it is utterly flexible and members get a text on the bus on their way

to work to say we do not need you for another two hours, do you just

go home? Of course not, you go to work and sit around in the canteen

and maybe you will end up starting work early or alternatively you get

the text message saying we do not need you today. How do you live with

that? What do you say to the gas and electricity person? I cannot pay my

bills this week? That is absolutely my experience. The problem is there

is a notion out there amongst members the public that workers are

used by employers and times of peak business and there are examples of

that. In the Lincolnshire fields in the summer picking season you need

to employ more people. In the lead up to Christmas you need to for a

more people that is not what is happening. This is a systematic

model of employers who highly profitable using agency staff to

hire and fire on a revolving door. I should have mentioned and I

apologise that I am a member of the GMB. Then, is this a good reflection

of what the recruitment industry is like it is not a reflection of our

membership, are members are very much about compliance with the law.

I would agree sometimes the law is difficult to understand and

certainly matters of worker status are difficult to grasp at times. We

think it would be very helpful to have a single definition of agency

worker or even one that applied to the tripartite arrangements

generally so that could encompass the gig economy as it is being

referred to but in terms of tax avoidance or avoidance of worker

rights it is certainly not something I have experienced and generally we

are out there to help comply with the law. The conduct revelations

that were introduced in 2003 set out the rights or rather how agencies

must treat their workers and indeed their clients and a lot of that is

about making it clear to the work what their status is, when they will

be paid, what their rate of pay will be and one of the key is. The

conduct regulations is that the agency worker should not be subject

to a detriment. So they're already regulations in place which can be

enforced. It is possibly the fact they are not just being enforced

sufficiently. Jennifer, welcome back. In terms of the situation

being described in Adriaan's written evidence is that something you would

recognise as somebody who is a practitioner in respect of agency

workers. Rulli I would agree on a number of points. I do believe there

is a lot of areas in our sector that is competitive and noncompliant and

it has been alluded to earlier, the use of umbrella companies and the

use of alternative the models that can be right. It is not something

that we as a business condone or enter into and we find that our

competitors are able to undercut our prices on the basis that they are

receiving income from other places and that is something that we should

focus on in the sector because it is not a level playing field we don't

promote that to our clients, we are trying to educate our clients so

that they need to identify those schemes that are in place. Forgive

my youth in you said it is not a level playing field because others

are getting income from elsewhere. The way the models work and I'm not

an expert, in the earlier session with automatic packaging people

laugh into different companies. I have seen models where someone in

the Philippines, as a director of that business, onshore and offshore

models, that allows the agency to generate greater profits further

than the margin and that the undercuts the paid by national

interest that should be due on those workers and that is something that I

think is an area that is really important is eradicated. David Kamp

said earlier there are four categories, criminal, dodgy,

compliant and leading. Which category is trans-line. I would say

we are compliant and we are aiming to be leading. What will you do to

make sure? Derry since my last bits we have worked very are not only in

those areas I was asked to comment on that because our entire business

we have engaged with a number of third-party independent auditors. We

have been ordered to the LP and GLA standards and we are still

continuing with that process and we welcome any independent auditors to

the mainland look at us and anything of our entire we have made sure that

we are moving forward and progressing and we are totally

transparent and compliant within the sector. 'S reputation important for

your business? Repetitions are important and we feel now it is the

totally compliant and so the transparent and want to make sure

that our clients and the entire sector is educated to what

compliance actually looks like and what is good compliance and what is

bad compliance and it is not necessarily easy to see. I have

looked at your accounts and you are operating on wafer thin margins. You

have got a large turnover of that very small operating profit. The

reason I ask about reputation is is it is the case that you have to try

to suppress costs down with as much as possible in order to increase

your margins? Costs will be more important than reputation. The

reason we have a wafer thin margins because we offer everything a

compliant model. We're not operating an alternate scheme which uses the

worker to create more profits in some cases. Then you talked about

being at the reputable end of the industry, how many of your members

apply the Swedish derogation? To my knowledge not many. I can try to

establish how many but I do not know the numbers now. I think it would be

very useful. Do you apply it still? Does Transline still apply? The

Swedish derogation? We have very minimal workers on the Swedish

derogation, it is less than 5% and that is only on the request of

plants, it is not something we promote. We promote pay parity which

means the benefits and the pay that the permanent workers get the agency

workers also get. So again are you able to provide evidence to the

committee that the amount of payment you have made. To agency staff that

have been out of work for four weeks or more? I can certainly look into

that. If the Swedish can I just read that, it is out of

work for one week or more. Entitled to a least four weeks pay. So if

that loophole if I can call it that is plugged in some way or will

change so it becomes enforced properly as opposed to not being

enforced, apart from that what other recommendations would you make four

changes to the agency worker regulations? I put that to the whole

panel. I think if that was removed the regulations would be fairly

watertight. So it is just that derogation that needs changing? I

want to come onto that. I know there has been scans around holiday pay

and personal accident insurance and I wonder if you could expand a bit

more how they work is that an agency will take out accident insurance

policy against its whole workforce. I got the quote a while ago which

equated to 11p per person per week. You then sell them to your

workforce. Your whole workforce is covered. Anybody who has annexed and

is covered. The benefits are very poor for every

example, I have seen you get very little. They don't cover back

injuries, repetitive strain injuries, and the client and the

agency will have employer's liability insurance in place, so the

benefits are very, very limited so they retail at 11 pence per week to

us. We're a small agency. I heard that larger agencies can get cover

for 3 pence a week. You charge your temples to ?50 to ?3 a week, which

seems the normal amount, so Annual subscription, ?1 at that, you are

clamping a temp policy, ?1.50 to ?5 per annum. The agencies defend it by

saying it is option but option is a very interesting question, in that

we have heard on large sites where there is huge cost pressures, the

agency managers are targeted to get at least 70, 80% of the people

signed up to the schemes and the fall back you are not offered work,

if you do, you are offered work. It me that is a scam. A reason to

increase profits. I don't know the situation at Shybrook. If they all

signed up, it would be ?10,000 per week for the agencies for doing

nothing. Is that something you recognise, Mr

Groefr? Not the personal accident insurance. It is not something that

I am familiar with in context to our agency workers. With the regards to

the holiday pay, that could in part be down to the wording of the

working time regulations in as much as you are not meant, as an

employer, engager, to pay out on a day pay unless someone requests

holiday, their leave on an accrued basis. Rolled up holiday pay, as and

when you receive your weekly or monthly paid packet is frowned upon.

The government website doesn't support it.

The, there was a European Court of Justice case, Robinson/Steele, that

said it could be paid on that basis, provided transparent, ifs that what

acknowledged it would be listed separately on a pay slip, addressing

the issue of people assuring to be receiving the holiday pay.

What does your organisation do to promote that amongst the membership

that you represent? All I can is a a lot of our work is ensuring that our

membership knows how to be compliant with the conduct regulations, the

worker regulations and the relevant tax regulation, all of which uses

similar terminology but not always in the same way. That again leads to

some of the confusion. I'm asking what do you do? We try to

break it down to explain it in a way that our members can understand and

apply it to their workers. Do you have a quality mark or a

badge, as it were that says, these are the gold standards, agencies,

that we know are applying the spirit and the letter of the law and have

processes in place in order to ensure that they are compliant or

leading, as the categories were? I suppose I would say just being a

member of our organisation is reaching that standard as that is

what we are advocating. Is that right Mr Gregory? I use

Ben's company, they are very good. But he is not on the ground. He is

setting out what should happen but it doesn't, not at all. There are

three things that we do should be best practice. I have never heard of

another agency that does it. That is we put a column for holiday pay on a

pay sleep. So each week the individuals can see the amount

accruing. If not, they are in the dark. We allow them to accrue

holiday pay at the end of a holiday year, temples may have ?500,000

worth of holiday but the leave ended last week, you are starting again,

so we allow them to accrue it indefinitely. And when they leave,

if they have not taken it, we pay it with the P 45. Three simple steps, I

have never met anyone else fulfil those. Why don't agencies do that?

That is the sort of thing that ordinary workers in a 21est century

developed company, should expect that they accrue the holiday, and

have the right to the holiday and if at the end of the employment

relationship that they are able to be paid this.

I cannot overstate the dark shadow of working for an agency. Some of

the stuff I have heard, I get. I understand. The best practices that

Adrian talks about, that is not the world that the people in the GMB

experience at all. My question was looking around,

whether or not it is possible to develop a quality mark that would be

able to distinguish those agencies that are compliant or leading and

has the GMB and other unions worked with the industry to see if that

sort of badge could be developed so that employers know this is a

trusted agency, this is an agency that is compliant and it's like a

trust mark. It's like a British standard in safety? David's

organisation, the ALP takes very much a step towards that. They come

up each year when the national Living Wage or minimum wage changes

with what they call minimum charged rate guidance. What they say is if

you are paying ?7.20 an hour and including employer's National

Insurance, holiday pay, SDLP P, auto enrolment, pension, and what they

call the unavoidable cost of observing the law on employment

issues, they come out with a figure of ?9.38 per hour, saying that is

cost. So that is 0% profit margin at 9.38 if you are engaging a labour

provider, you should, the think that the wording is that they should be

charging that plus a sustainable profit margin, which generally in

the agency world is between 10 and 20%. So an a ?7.20 employee, you

should be charging between ?10.30 and ?11.30 depending on the

circumstances. If you came in at 9.38, ie zero %, you would not get

very many big contracts. You have to come in below that. I rang a client

asking the cheapest price he had been quoted H he said ?8.73,

although he had been told for the first month he could have as many

temples pore ?7.50. It does not make sense. Most of the large agencies

and some smaller ones, operate at prices which mean that they cannot

be observing their obligations. So do you think that licencing is

the answer? Well I think it is. But the industry is so opposed to it,

again, like Dave said, an increase of the GLA remit with stronger

standards, that it would a need so many multiples of its budget to be

affected, that to licence it without being effective is pointless.

Could you put a position in place if you are not licensed you cannot be a

recruitment agency? That is in place now. But I don't share David's Rosie

view of the agencies within the GLA sector. There is more compliance

within than outside of the sector and Paul Broadbent spoke of

frustration that he noses of agencies that are compliant within

the GLA sector, that are getting up to every trick outside of the book

outside of it. Jennifer, what does Tranceline do?

We INAUDIBLE

Michelle? To pick up on a couple of things, the first question,

Jennifer, you said earlier about insurance services to agency workers

that Transline never offered? That was my counterpart in the last

inquiry. So the best connection, so you have never offered? OK. And

picking up on following the last theme there, in terms of licensing

that the questions were, given what was described around the margins

being low, and yourself, do you think that the effect of licensing

would start to change this race to the bottom that we are seeing in

terms of margins being cut? Yes. I am in agreement. I think we could

widen the scope of the employment agency. The agency world is

regulated by the employment agencies inspectorate. They have been to see

me. But I do belief there are not that many people within that

department. I do think that a level of licencing is a requirement in the

sect. It is not something that we would push against having in place.

If so, what specifically, would you like to see from your side of the

fence that you think would start to change the shape and the nature of

the industry? Any ideas? The contract terms that the workers are

under. What good looks like, the pay models that are in use. And making

it clear to our end user clients what they must look out for. That is

a big education piece that across the sector, is, how douse, and

aagree, how does somebody know if the agency is compliant or not. That

is something that we are working hard on outside of this. You

mentioned, I know you have undertaken a full review since

writing to the committee in September 2016, can you run through

the specific changes? In a letter to the committee 16th September, 2016

you had under taken a full review of the business to ensure it was fully

compliant. Can you step through what you have done? We engaged with the

third party autotors that were recommended by the ALP to do a

review of all of our contracts, the contracts for the workers and how

they are structured. The recruitment process, ensuring that the workers

fully understand what they are engaging into and that has gone

beyond that point to make sure that it is available to them, that it is

readable. The employment agency eninspectorate has been in to look

and to review, they have a code of conduct. There were some minor

points that we rectified. We are working on the recommendations and

all of them are almost in place to make sure that we are ALP and GLP

compliant. I am keen to understand this in

detail. You spoke about contracts, so what you are saying you have put

in place steps so that the workers understand the nature of the

contracts that they are signing up to, to have the contracts themselves

changed is more effort? The understanding? The underlying

principles of the contract have not changed but the contract has been

revamped and it is much more, it is easier for the worker to understand.

It is worker friendly, one of the recommendations that we received and

have put in place. Could you supply a copy of the contract to compare

it? Yes? Other steps in terms of the review, can you step through them?

We are continuing under our client review. We have undertaken an

investigation from the R BC, heavily engaged with a myriad of

third-party... I am trying to understand specifically, the top

threeas you have changed apart from the contracts, the specifics rather

than the generalities? The contract, the way that the workers are

engaged, worker engagement, ensuring that we understand how the workers

feel on the ground. Working with the clients to ensure that they know

what is required. To know that there is nothing within our power that is

going on, that has been more complex. Do you still have

prepayment cards? They are in existence, I did defend them the

last time I was here, however we have changed the way, there are a

range of options, if someone chooses that they need a prepayment card

while waiting for a bank account to be opened, and we encourage then

people to move away after they have opened a full bank account but it is

a mechanism nichl to ensure that payment is received on a timely

basis. We don't actively encourage people to stay on them for a long

period of time. But it is opportunity to ensure that they are

paid on a timely basis. When you are dealing with people not on huge

amounts of money, they may not have saying savings, they need that money

in place. So you are showing the average time

for getting that organised? Have you seen the data? I have.

Are you willing to write to the committee to set out specifically

what you have done to come pair where you were then as to where you

are now. Thank you. Can I ask Jennifer, do you turn down

work if a client says, or potential client wants to pay the least amount

that they can, can you help them do that as part of the package, do you

turn them down? It is not our policy to supply all that we can, we look

at the risk, whether it is right for us to supply. We have been known to

walk away from clients or turn them down as they are not prepared to

work within our remit. OK.

In the first session with thoughts about how agency would seems to

becoming much broader than the traditional idea and businesses are

starting to design their models around a higher proportion of agency

workers. What of the consequences of that to the Labour market and the

quality of training and skills, to individuals themselves and to

society, and also what of the risks to employers? Can I start with you,

Tim? Thank you very much. The key question I think, first of all we

are seeing this becoming a model particularly in this gig economy,

this fourth industrial revolution that is hurtling towards us. And

firstly in terms of the individual consequences how can you plan, how

can you begin to plan your life and how do you know you're going to get

enough work provided by the agency themselves or by the employer, I use

that phrase on purpose to be able to put the Mill on the table and pay

your bills on let alone save for a mortgage will get a roof over your

head. And you cannot underestimate, people tell you all the time, the

fear factor. I was listening earlier and I hoped Peter asked me the same

questions about the union 's role. You cannot underestimate this fear

factor. People do not want to be treated like they are treated by

some agency employers. People do not want to be treated where they just

do not know where their next meal is coming from. That brings individual

challenges. Secondly there is no evidence at all of employers who use

large-scale and I differentiate large-scale between that and extra

manual, for example, large-scale use of agency employers that they invest

in those employees. They are viewed as temporary in every sense. They do

not integrate with the permanent workforce. They are not investing in

terms of their skills or in terms of their standing in the workplace and

in the community. Let's be honest about where this has led. This led I

think to large numbers of people voting to come out of the EU. For

some years people have felt, workers have failed, that their lot is

getting worse and worse and worse and with this drive towards

commercialisation they feel even more disenfranchised. They feel like

people like yourselves, politicians, do not understand the challenges or

look like them sound like them or have the same wife expenses. So

let's blame migrant workers, who brought over here, contrary to some

of examples I have just heard from Jennifer, that is simply not true

for Assange -- TUPE workers. I quote, the training team are told to

lower the test scores to pass and get people through their tests

whatever it takes even when they have little or no English are

putting people at risk, but are not even able to read the fire exits.

That is the implication. People there for look for something to

blame. I cannot take any more losses or cuts and if they were not

overhear my employer would treat me brilliantly like they used to.

Probably all nonsense. I would be able to get into the doctors this

week and I would have my child in a class of less than 40 people.

Employers who are highly profitable, that is the key point for me. We're

talking about employers like ASOS and next, you are highly profitable

and do so at the expense of their workers. There is a next warehouse

in South Yorkshire that needed to employ seasonal workers to meet the

Christmas demand. This was just after Next had announced record

profits. The first time they had ever declared profits higher than

Marks Spencer 's. They offered these warehouse jobs at 10p per hour

above the national minimum wage and offer them to the Polish agency.

When we challenge them Next said people in that area would not work

for tempi above national minimum wage. Who picks up the tab?

Vimpelcom you there working at 10p per hour which drive down wages for

everybody. Indigence local workers probably have to claim top of

benefits, which we then pay. Into the welfare so we are now paying in

work people to claim benefits to support the system and employers

just raise their profits. It is unsustainable, unfair and

unreasonable and it has to change. What do you think, I ask Adrian,

this is going to see businesses with the upstart incident downside,

surely there will come a point where they will realise that the lack of

investment in the workforce and the lack of sustainability and security

is detrimental to the workforce they are employing, workforces are

businesses starting to see this? I think they are. We only deal with

companies like that. There's always going to be a number of responsible

employers who realise that well treated and properly paid workforce

is going to be more productive and unexploited one. That is whether the

sciences like, I do not know. Australia about being first on dodgy

criminals and Steve said he would say the majority of agencies are

dodgy I would say the vast majority are responsible. I would like to go

back the hearing about the Passos experience. Can you tell us more

about how TUPE have used agency workers and can you also say

something about the route out of agency work for people as well? At

any given time TUPE employee 80% of their employees through this model.

Where is the benefit for the employer? You can hire and fire at

any given time. They are disposable and picking up on ageing's point

about where agencies are able to offer the flat ?7 50 per hour it is

not reasonable and it is unsustainable and it doesn't make

sense. So who pays the price for that? The workers, obviously. And

through the use of payment cars, the National living wage, they get this

minimum wage, any payment out of that takes them over. Payment cards,

lodgings, an example where and because landlords have people six in

a room and charge people for it. National Insurance deductions, all

taking workers below the minimum wage. So what is the way out? I tell

you the way out. Nestl in New York are the best exponent of the use of

agency workers. There is a tripartite agreement with the trade

unions and they talk on a monthly basis about numbers of agency

workers who enjoys parity rights from the first day. You get the same

rates of pay as Nestl workers. Fasan Nestl by the end of this year

will be a properly accredited living wage employer. They get parity

rights from day one. Secondly it is over 50%, if is a statistical fact

that over 50% of the agency workers at Nestl end up as permanent

employees and thirdly, no temporary agency workers is used and Nestl

for any length of time without them becoming permanent. It is properly

scrutinise, openly and transparently done. No one is used and abused and

thrown out of the door. So why do they bother using an agency? To

properly made demands that are unexpected. With there is each

other, not do that? It could very at any given time. The differences

we're not talking about 50% of the workforce, we are talking about 3%

or 4% or 5%. Exactly the same as the care sector. The private care

sector. You would go into some of that with use of agency staff

Olesen, poor management, lazy management. Fairness is good and

decent examples where they would only use agency workers were

somebody had called in sick at the last moment. Exactly the same point

could you talk about your relationship with ASOS we are their

main supplier of agency workers and the having Asian union, I do not

think they can be called upon for not engaging with the union. They

specifically did not engage with the GMB. And that is not advance of the

damage and but, I'm not here to defend anybody apart from talking

about what Transline know about. I would like to note that I looked at

some stats yesterday and within our sector in the last 12 months there