Editor’s
note: Katharine Booth holds a LLM, Advanced Programme in European and
International Human Rights Law from Leiden University, Netherlands and a LLB
and BA from the University of New South Wales, Australia. She is currently
working at the Asser Institute in The Hague. She previously worked as a lawyer and
for a Supreme Court Justice in Australia.
This series
of blog posts focuses on the regulation of so-called ‘gangmasters’ in the UK
and Australia. A ‘gangmaster’ is an old English term for a person (an
individual or business) who organises or supplies a worker to do work for another
person.[1]
Gangmasters have been described as ‘middlemen’ or ‘brokers’ between
a worker and a business that needs temporary, and often seasonal, labour. In
other countries, including Australia, gangmasters are commonly referred to as labour
hire providers or labour market intermediaries.
In recent
years, legislation has been implemented in the UK and three Australian States (Queensland, Victoria and South Australia) requiring gangmasters to be
licensed. According to Judy Fudge and Kendra Strauss, central to these licensing schemes
is the protection of vulnerable workers from forced and unfree labour and
exploitation:
“[E]vidence suggests that ‘sweating’ at the
bottom end of the labour market (increasingly populated by migrant workers,
both documented and undocumented, in many countries) often involves labour
intermediaries who exploit the ways in which processes of racialization and the
construction of new categories of social difference, instigated by immigration
regimes, render some workers extremely vulnerable—including to forced and
unfree labour.”
As noted by
Kendra Strauss, migrant workers are especially
vulnerable to exploitation as they often migrate from less developed economies,
have a precarious migrant status, and are employed in poorly-paid positions. They
often lack English language skills and have little knowledge of their legal
entitlements and pathways for accessing remedies which, according to an Oxfam
GB report, makes it unlikely that they will
report abuse or exploitation, for fear of losing their jobs. Moreover, as Sayomi Ariyawansa explains, the three-tiered or
tripartite arrangement between the worker, gangmaster and host business means
that there is no direct contractual relationship between the worker and host
business and little oversight of the legal arrangements between the worker and
gangmaster. This makes it easy for unscrupulous gangmasters to slip through
legal cracks, but also for businesses to unknowingly enter into arrangements
with gangmasters that do not comply with the law.
This series
of blog posts explores the connection between the regulation of gangmasters and
the enactment of modern slavery legislation, namely legislation calling on
companies to report on modern slavery and other labour and human rights abuses
in their corporate supply chains. It is divided into four main parts. Part 1 of
this series explores two main issues. (1) The circumstances that led to the
enactment of gangmaster licensing schemes in the UK and Australia, and the
laws’ provisions relating to the licensing of workers. (2) The limitations of
these laws, particularly the inability of licensing schemes to hold liable
companies that enter into business arrangements with gangmasters, as well as
companies higher in the supply chain. Part 2 explores reform of these laws in the
UK and Australia in view of the relatively recent modern slavery legislation
implemented in both countries.
Flashpoints Lead to Legislative Change
The
enactment of both the UK and Australian gangmasters legislation followed flashpoints
of heightened public awareness of extreme exploitation of migrant labour. In
the UK, 23 undocumented Chinese migrants working as cockle pickers were drowned
by a rising tide in Morecombe
Bay, Lancashire, in
February 2004. The victims had been smuggled by Chinese
gangmasters into the UK, where they had been housed in overcrowded and inadequate
accommodation and paid a pittance for working often long hours in dangerous
conditions. The impact of the Morecambe Bay cockling disaster, as it came to be known, was profound,
with calls for more to be done to tackle gangmasters operating in the UK who
were putting the health and safety of often vulnerable migrant workers at risk.
Five months
after the Morecambe Bay cockling disaster, the Gangmasters
(Licensing) Act was enacted and, in April 2015, the Gangmasters Licensing
Authority (GLA) was established. The Act empowered the GLA to regulate the
licensing of gangmasters involved in the supply or use of workers in connection
with the agriculture, horticulture, food processing, shellfish gathering and
forestry sectors. To hold a licence, gangmasters are required to comply with
the Gangmasters
(Licensing Conditions) Rules 2009. Gangmasters must, for example, enter
into written employment agreements with workers and take reasonable,
practicable steps to ensure that workers are aware of their legal rights and
obligations, and they must not withhold or threaten to withhold payments to
workers. The GLA, therefore, aimed to regulate the exploitative activities of
gangmasters in specific industries through the introduction of a national
licensing scheme.
Investigations handled by the GLA led to
the revocation of licenses and, in extreme cases of exploitation, civil claims
against gangmasters. In a recent High Court
judgment on the Gangmasters (Licensing) Act, the claimants, Lithuanian nationals
employed to catch farm chickens, successfully alleged that they were employed
in an exploitative manner. A GLA investigation revealed that the parties had
never signed an employment contract and the claimants had no knowledge of their
legal rights and entitlements. They worked for extremely long periods with
insufficient breaks, were paid considerably less than the statutory minimum, and
not paid amounts owed to them, including holiday and overtime pay. Further, their
pay was subject to unlawful deductions for so-called employment fees, as well
as charges for inadequate accommodation in excess of the statutory maximum. The
claimants were threatened and intimidated by a Lithuanian middleman if they
complained about the conditions of their employment. In this case, the High
Court granted summary judgment in favour of the claimants on all grounds.
The passage
of the Australian gangmaster licensing legislation followed media reports in May 2015 that revealed rampant
exploitation of migrant labour in Australian-grown fresh produce stocked by
major supermarket chains. Subsequently, three Australian States (Queensland, Victoria and South Australia) enacted legislation to regulate
the licensing of labour hire service providers. For a
detailed analysis of the Australians laws, see Anthony Forsyth’s article ‘Regulating Australia’s
‘gangmasters’ through labour hire licensing’. The Queensland Government, for
instance, introduced the Labour Hire Licensing Act 2017 following a
parliamentary inquiry into the practices of the industry. The final report of
that inquiry contained evidence of serious mistreatment
and exploitation of workers in Queensland, particularly in the low-paid horticulture,
meat processing and cleaning industries, committed especially against migrant
workers. Similarly, in September 2015, an inquiry conducted by the Victorian
Government reported that many temporary migrant and
student visa holders, often young backpackers from Asian countries, were being
subjected to exploitation in the labour market, particularly in the horticulture and food services sectors. For more information about labour
hire in the Australian horticultural industry, read Sayomi
Ariyawansa’s article. The impetus for the passage of the UK and Australian
laws was, therefore, closely connected to the protection of migrant workers from
exploitation and other labour and human rights violations.
The provisions of all of the Australian laws
are broadly similar to the Gangmasters (Licensing) Act. All provide for a
State-wide licensing scheme for labour hire providers. One key difference,
however, between the Australian laws and the UK Act (as originally enacted) is
that the scope of the former is unlimited. That is, in Queensland, Victoria and
South Australia, all labour hire providers must be licensed, regardless of the
industry in which they operate.
Limitations
of the Licensing Laws
The
enactment of the UK and Australian laws has not been without criticism. In the UK, the remit of the GLA was restricted to the five sectors
specified in the Gangmasters (Licensing) Act. Temporary workers engaged in
other sectors, including the construction, hospitality and social care sectors
that engage
large numbers of migrant workers in the UK, were excluded from the GLA’s
operations. Unlike the Gangmasters
(Licensing) Act, the Australian laws do not limit the scope of their
application and therefore apply to all sectors. However,
the effectiveness of the Australian laws is limited in that they are enacted by
State Governments rather than the Federal Government. This means that there is
no uniform, Australia-wide labour hire licensing scheme to address worker
exploitation, but rather a patchwork of State-based legislation.
Moreover,
both the UK Act (as originally enacted) and the Australian laws provide only for
the establishment of a labour hire licensing scheme and compliance with that
scheme. The reach of the licensing authorities is generally restricted to the passive regulation of licences and contraventions
of the relevant rules that are connected to alleged offences by gangmasters.
Further, the scope of liability under the
laws is limited, as both the UK and Australian laws regulate only relationships
between workers, gangmasters and labour users. This means that companies
further up the supply chain, such as major retailers, cannot be held liable
for, for example, entering into a contractual relationship with a labour user
that engaged an unlicensed gangmaster. By way of example, the recent UK case concerning
exploited Lithuanian chicken-catchers resulted in claims against the individual
gangmasters only – not the businesses that engaged those gangmasters and sold
the eggs hand-picked by the workers to consumers. This is because the UK and
Australian laws only regulate the tripartite arrangement between the worker,
gangmaster and host business – and the latter is unlikely to be the major
corporation or retailer that sells the final product to the consumer. They do
not oblige the retailer, for example, to conduct human rights due diligence
(HRDD) to ensure that workers are being treated according to the law. In
relation to the Australian horticultural industry, Sayomi Ariyawansa has suggested that workers’
entitlements could be best assured by licensing legislation requiring retailers
to conduct ‘targeted transparency’ or a form of HRDD:
“Retailers should be required to prepare and publicly
disclose a statement which addresses its due diligence processes in relation to
ensuring its suppliers comply with the licensing scheme. Further, where a
retailer has failed to take all reasonable steps to ensure compliance, the
authority responsible for the enforcement of the GLA model may issue a guidance
to the retailer, and may publish this guidance in a way it considers
appropriate.”
Such due diligence would reflect the
growing recognition of human rights abuses in corporate supply chains.
This blog post has explored the context in
which the UK and Australian labour hire licensing laws were enacted, as well as
some limitations of these laws. Part 2 delves into the subsequent reform of the
UK law and the effect of the enactment of modern slavery laws in both the UK
and Australia.