inquiry into recruitment and employment in the meat and poultry processing sector

Inquiry intorecruitment andemployment inthe meat andpoultryprocessingsector

Report of the findings and recommendations

We are grateful to all the organisationsand individuals who took the time tosubmit evidence to our inquiry.

We would also like to thank:

The staff of the meat and poultryprocessing firms we visited, and therepresentatives of the agencies thatsupplied workers to them. Theygenerously gave their time to provide us with the information and insights we needed.

The organisations and individuals whohelped us to contact people working inthe industry and arrange interviewswith them.

The British Poultry Council, the BritishMeat Processing Association, theRecruitment and EmploymentConfederation and the Association of Labour Providers for their input.

Acknowledgements

Page

Foreword 1

The role of the Equality and Human Rights Commission 3

Our inquiry into recruitment and employment in the meat and poultry processing sector 4

Our methodology 6

The recruitment of agency workers 7

The problems agency workers face 10

Experiences of agency workers with agencies 14

Additional problems for migrant workers 17

What causes agency workers to be vulnerable to poor treatment? 20

The impact of poor practices 24

Good practice by agencies and processing firms 26

Managing agency workers well makes good sense for business 27

Why the current system and planned initiatives are not sufficient to prevent abuse 29

The way forward 36

References 44

Contact us 45

Contents

1

Foreword

Foreword The meat and poultry processing industrycontributes hundreds of millions ofpounds to the British economy every year.Many products, from Welsh lamb toCumbrian beef, are recognisedinternationally for their quality. They are a source of local income and pride.

Yet this industry owes much of its successto agency workers, many of them bornoutside this country. One third of thepermanent workforce and 70 per cent ofthe agency workers in the industry aremigrant workers.

Over the past 15 months processing firms,work agencies and workers themselveshave all talked to us about how staff,particularly agency workers, are recruitedand treated in the workplace. We aregrateful to them for their time andinsights. We also thank all theCommission staff who were involved,particularly Susie Uppal, Director of Legal Enforcement, and Dr Neil Woodingas Commissioner to the Inquiry, for theircontribution to this important piece ofwork.

Our evidence shows there are significantchallenges facing the industry if it is touphold ethical standards and effectivelypromote equality and inclusion. We foundevidence of widespread poor treatment ofagency workers, particularly migrant andpregnant workers, both by agencies and in the meat processing factories. Someamount to breaches of the law and

licensing standards – such as coercingworkers to do double shifts when they aretired or ill. Others are a clear affront to respect and dignity.

This mistreatment not only blights the lives of individuals, but damages good relations in the workplace andcommunities. Yet much of it remainshidden. Sadly, many of these agencyworkers endure even physical and verbalabuse without complaint, fearful thatcomplaining will wreck their chance ofsecuring stable employment.

But that is not the full picture. There areprocessing firms and agencies who takesteps to act responsibly and reject themistreatment of agency workers. Weheard from firms who treat all workers as an integral and valued part of theirworkforce. Some have come up withimaginative ways of including migrantworkers.

Their motivations are economic as well as ethical. Being known as employers ofchoice, rather than of last resort, enablesthem to attract and retain the moretalented and motivated staff.

Our report also highlights the importantrole of good regulation. Two-thirds ofagencies agree that the GangmastersLicensing Authority has improvedstandards by preventing unscrupulousagencies from operating.

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Inquiry into recruitment and employment in the meat and poultry processing sector

The supermarkets, as the biggestcustomers of British meat, can exercise asignificant influence on the behaviour ofproducers. And unions can provide a voice for those who have concerns aboutworkplace practices.

Today, based on our Inquiry findings, we are recommending a series of steps to firms, agencies, supermarkets,government and unions. Taken together,we believe that these solutions willpromote consistent standards andequality, bringing about systemic changein the industry.

Trevor Phillips Chair, Equality and Human Rights Commission

March 2010

3

The role of the Equality and Human Rights Commission

The Equality and Human RightsCommission (the Commission) works to eliminate discrimination, reduceinequality, and make sure everyone has afair chance to take part in society. We havea duty to promote good relations betweenall people, ensuring that the conditions forsocial division are not allowed to ferment.

We are responsible for promotingawareness, understanding and protectionof human rights. This includesinternational human rights conventions,such as those covering human rights in theworkplace, drawn up and overseen by theInternational Labour Organization.

In the employment market we want tocreate a fairer Britain by promoting faircompetition between businesses, rooted inan environment of equality and respect forall workers.

We want to make sure that:

the legal and regulatory frameworkgoverning the employment marketeffectively upholds equality and humanrights, and

workplaces are environments wherediverse workforces can operate togetherharmoniously, confident with eachother’s differences.

The role of the Equalityand Human RightsCommission

4


In October 2008, the Commissionlaunched an inquiry into recruitment andemployment in the meat and poultryprocessing sector in England and Wales.

We wanted to examine how the peopleworking in this industry are recruited, and how they are treated once they are at work. This would help us to identifypractices that inhibit equality and damagerelations between different nationalitiesand types of worker, and barriers thatprevent progress. It would also allow us tomake recommendations to overcome theseissues by drawing on current good practicein the industry.

We looked at employment andrecruitment issues related all stages of meat and poultry processing andpackaging activity prior to delivery toretail outlets but excluding the slaughterand initial preparation of red meat.

This is a summary of our findings and therecommendations we believe will bringabout change. Further information aboutour findings is available from our website.

The background to the Inquiry

The food and drink manufacturingindustry is the largest manufacturingsector in the UK(1). The meat and poultry sector is a significant part of this, employing 88,800 people, a third located in the East of England and East Midlands(2). The red meat sector is of particular importance to the Welsheconomy, employing over 33,000 peopleand contributing £361 million a year,including exports worth £108 million(3).

There is considerable use of agency,predominantly migrant, workers in thissector. Overall, migrant workers make up70 per cent of agency staff in processingfirms and over one-third of theiremployees(4).

We had received evidence that agencyworkers were treated differently to directly employed workers in terms of pay and conditions and their treatment at work, and that there were tensionsbetween different nationalities in theworkplace. We wanted to explore theextent of these issues and recommendways of resolving them.

Our inquiry intorecruitment andemployment in the meat and poultryprocessing sector

5

Our inquiry into recruitment and employment in the meat and poultry processing sector

The aim of the Inquiry

We therefore carried out a statutoryinquiry (in accordance with our powersunder section 16 of the Equality Act 2006)to:

understand the issues affecting theseworkers

examine the impact of currentrecruitment and employment practiceon individuals and on relations betweenworkers of different nationalities, and

look for examples of good practicewhich promote equality of opportunityfor agency workers and good relationsbetween different nationalities in thissector.

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The Commission gathered a broad andauthoritative evidence base from a widerange of individuals and organisationsacross England and Wales. We obtained a rounded picture of the supply chain:from the agency staff working onproduction lines, the work agencies thatsupply them, the processing firms at which they are placed, to the supermarketswho buy around 80 per cent of the meatproducts from this sector(5). We werealso greatly assisted by the voluntarysector and the regulatory bodies.

Our evidence base includes:

Written evidence

We sent out a ‘call for evidence’, translatedinto 12 languages, to organisations andindividuals working in this sector, andreceived over 150 responses. 120 of thesewere from individual workers, three-quarters of which were in languages other than English, half being in Polish.

We also obtained written evidence from supermarkets, unions, industryrepresentative bodies, regulators, and government departments.

Worker interviews

We conducted 140 face-to-face interviewswith meat processing workers in 15different locations across England andWales. 120 were migrant workers. Over

2,000 pages of verbatim transcripts ofinterviews were analysed using qualitativeanalysis software.

Surveys of meat processingfirms and agencies

The research agency GfK NOP conductedand analysed two in-depth online surveyson behalf of the Commission. We received:

190 responses from meat and poultryprocessing firms

131 responses from work agenciessupplying labour to this sector.

Case studies

We conducted in-depth studies of sevenorganisations – both processing firms andwork agencies – which were recognised as displaying good practice in terms ofrecruitment, employment, equality andintegration. We interviewed a further 50 managers and staff involved inproduction at various levels of seniority,and examined documentation the firms supplied.

Stakeholder interviews

Interviews were also held with a range of stakeholders – from police officers toadvice-giving agencies, and other groupswho represent the interests of migrantand/or agency workers.

Our methodology

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The recruitment of agency workers

The recruitment industry has a turnover ofover £27 billion across the UK, and thereare between 1.1 and 1.5 million agencyworkers(6). Work agencies play animportant role in helping businessesrespond flexibly to fluctuating customerdemand.

In meat processing firms there is a widevariation in the proportions of theworkforce made up of agency staff. Inlarger firms there is evidence that from 10 per cent to over 50 per cent of workersare engaged through an agency.

In most sectors it is not necessary for awork agency to be licensed, but a licencefrom the Gangmasters Licensing Authority(GLA) is required before an agency cansupply labour to the food and drinkprocessing sector.

The 131 work agencies responding to oursurvey, who supply labour to meat andpoultry processing firms, ranged fromlocal firms with only one recruitmentconsultant, to national chains with 50 or more consultants. They told us thataround 70 per cent of workers they supplyto processing firms are migrant workers,with Polish being the largest nationality,followed by Lithuanian, Latvian, Czech,Slovakian and Portuguese.

Some large agencies said that over 90 percent of the workers they supplied to thissector were migrant workers. At one in sixmeat processing sites, every agency

worker used over the last 12 months was a migrant worker.

The main reason they gave for the highproportion of migrant workers is thedifficulty of attracting British workers to the low-paid meat processing jobs,particularly on an agency basis. This wasconfirmed by responses to our survey from meat and poultry processing firms.

Difficulties attracting Britishworkers

Half of agencies, and a third of processingfirms, said it was difficult to recruit Britishworkers. A quarter of processing firms alsofound it difficult to retain British workers.

Work agencies and processing firmsagreed that British workers were probablydeterred by:

a job involving handling meat

the rates of pay, typically at the nationalminimum wage

the working conditions, which includework with frozen products in lowtemperatures, and

the physical demands, often involvingintensive manual labour over longshifts.


8


Work agencies placed more emphasis than processing firms on the rates of payas a disincentive (62 per cent compared to47 per cent).

One-third of agencies attributed thedifficulties in attracting British workers to differences in work ethic betweennationalities. Just under half of agenciesthought British workers were unwilling to take on temporary work. Agencies were five times more likely to hold thisview than meat processing firms, whichsuggests that British workers may be morewilling to accept direct employment on a temporary contract.

Anecdotal reports suggesting that therecession may lead to an influx of Britishworkers in meat processing have not beenborne out by data supplied by processingfirms and agencies.

Agencies refusing to registerworkers based on nationality

A few British workers spoke of difficultyregistering for work with some agencieswho almost exclusively supply migrantworkers, generally Eastern Europeannationals. Interviewees of othernationalities also alleged that agencies hadrejected them on grounds of nationality.Any refusal to register an applicantbecause of their nationality is unlawfulunder the Race Relations Act and a breach of the GLA licensing standards.

Supplying workers on the basisof nationality

A number of interviewees alleged thatparticular nationalities were overlooked byagencies for positions within the meat andpoultry processing industry. This appearsto be supported by the results of ourquestionnaires.

Most agencies had experience of firmsbreaching the Race Relations Act in askingfor workers from specific countries,primarily Polish and British. A third ofagencies confirmed that they also actedunlawfully in sometimes supplyingworkers by judging what nationality theprocessing firm would prefer, orresponding to direct requests.

The top three reasons agencies gave forwhy they thought firms preferred workersof a particular nationality were:

the perceived dependability ofparticular nationalities

the idea that some nationalities have a better work ethic than others, and

ease of communication with other,currently employed, workers.

The goal of finding permanentemployment

Migrant workers told us the main benefitof agency work was that it provides access to the UK labour market. Some,particularly those with limited Englishskills, thought it was the only way open to them to find work.

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However we found that, almost withoutexception, workers would preferpermanent work due to the security andrights it offers. Only four of the 260workers we gathered evidence frompreferred agency work to directemployment, with only two citing the flexibility of agency work as a positive aspect.

“Even now, 10 months on, I wouldn’t besurprised to get a phone call ‘don’t come in tomorrow’. The insecurity, literally thefinancial insecurity, is terrible. You can’tplan nothing when you’ve got money; youcan’t do nothing because you don’t knowhow long it’s got to last you.”

(English male working in meat factoryprocessing, North West England)

Most workers see the agencies asproviding a stepping stone to permanentemployment. This is borne out by therecruitment methods adopted by firmswho use ‘temp to perm’ as an informalprobationary period. This is the mostpopular recruitment method used bylarger firms, who are nearly three timesmore likely than smaller firms to use it.

In all:

one-third of firms recruited 90–100 per cent of their new employees fromtheir agency staff over a 12-monthperiod, and

half of firms recruited over 70 per centof their new employees in this way.

Many allegations of discriminatorytreatment by migrant workers were linkedto workers being transferred to permanentcontracts. Workers were not aware of anycriteria or agreed process for this, and feltthat choices were often made on the basisof nationality or nepotism.

Word of mouth is another commonmethod of recruitment, equally popular in both large and smaller firms. Othermethods used were Jobcentre Plus andnewspaper adverts.

The impact of currentrecruitment practices

We are concerned that currentrecruitment practices may bediscriminatory in that they:

indirectly block British workers fromgetting jobs in the industry – such asthe prevalence of ‘temp to perm’

lack transparency – particularly the process and criteria relating totransferring from agency work to permanent employment

rely on word of mouth, with the result that certain nationalities,underrepresented in currentworkforces, may be excluded fromconsideration, and

are influenced by stereotypical views about the reliability of somenationalities.

10


The evidence our inquiry received showsthere are significant challenges facing theindustry if it is to uphold ethical standardsand effectively promote equality andcohesion.

We heard from processing firms who seek to operate both legally and ethically,treating agency workers of all nationalitiesas an integral and valued part of theirworkforce. But we also found evidence of widespread poor treatment of agencyworkers, particularly migrant andpregnant workers, both by agencies and in the workplace.

We found evidence of practices that:

contravene the various legalrequirements governing agencies,employment rights, health and safety,and equality

breach minimum ethical tradingstandards and basic human rights, and

treat agency and migrant workers inways which, while not necessarilyunlawful, are an affront to dignity and in some cases exploitative.

These practices were reported to us byworkers from all regions in England andWales working at meat and poultryprocessing firms and at fairly similar levels of frequency. This not only affectsindividuals, it also adversely affectsrelations between different nationalitiesand undermines fair competition between firms.

Despite the level of concern raised by ourfindings, the Commission has no evidenceto suggest that supply chain practices inthe meat processing sector are moredetrimental to workers than in any othersector that makes significant use of low-paid, agency migrant labour. Two thirds of agencies agree that the GangmastersLicensing Authority has improvedstandards in this sector, whereas non-regulated sectors have not received thesame intervention.

The experiences of agencyworkers in meat processingfirms

Different treatment of directlyemployed and agency workers

We found that conditions of work andtreatment of workers in this industry can vary considerably, not only betweencompanies, but also across sites within the same company.

More than eight out of ten of the 260workers we took evidence from said thatagency workers were treated worse thandirectly employed workers. The worsetreatment covered every aspect of theirwork – from poorer pay, to allocation of the least desirable jobs, and beingtreated like ‘second-class citizens’ in theworkplace. No one thought that agencyworkers were treated better thanpermanent staff.

The problems agencyworkers face

11

The problems agency workers face

Toilet breaks

Some workers had been prevented fromvisiting the toilet by their line manager.This included pregnant women, womenwith heavy periods, and people withbladder problems. Interviewees describedthe lasting impact of the humiliation ofworkers urinating and bleeding onthemselves while working at theproduction line.

The degrading nature of the treatment inrefusing workers permission to go to thetoilet in such circumstances may amountto a violation of their rights under Articles3 and 8 of the European Convention onHuman Rights.

Physical abuse

Around one-fifth of interviewees told usabout being pushed, kicked or havingthings thrown at them by line managers.

“The managers… they would pull ourclothes… and shout at [us]. And they even[threw] hamburgers. They were so angrybecause we were new and couldn’t do thejob as fast as we were supposed to… thosefrozen hamburgers are like stones.”

(Polish male working in meat processingfactory, East of England)

Verbal abuse

Over one-third of workers said they hadexperienced, or witnessed, verbal abuse.These reports came from workers acrossEngland and Wales in a variety ofprocessing firms, so it is not an isolatedproblem. The shouting was experienced as bullying, humiliating and abusive in its intent. The perception of some women interviewees was that women

received more verbal abuse from linemanagers, and there were instances ofsexual harassment.

A number of workers told us aboutincreased levels of anxiety, feelings ofhumiliation and inability to sleep, due to regular verbal abuse.

“I’ll never forget it… I’m not a slave. I just can’t speak English. He talked to melike he talked with an animal or somethinglike that. It is so terrible… sometimes I don’t even sleep in the night. Because thenext day I need to go to there [to that]horrible place again.”

(Brazilian male in poultry processingfactory, East of England)

Poor treatment of pregnantworkers

A quarter of workers mentioned poortreatment of pregnant workers. Womenattributed repeated miscarriages to thelack of adjustments to work. We alsoreceived reports of pregnant workersbeing forced to continue work that posedrisks to their health and safety, includingheavy lifting and extended periods ofstanding, under threat of losing their job.

Interviewees were not aware that pregnantagency workers had any rights not to bediscriminated against on the grounds oftheir pregnancy.

Some agency staff were given no furtherwork after managers realised that theywere pregnant. This is an issue thatrequires further attention. Agenciesadmitted to us that they felt underpressure not to supply pregnant agencyworkers.

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“Well they get rid of them [pregnantagency workers] when they find out…There’s nothing we can do about it… At the end of the day, without beingdisrespectful, if they ring up for 20 peoplethey are looking for 20 arms and legs to dothe job. They don’t want 19 and a pregnantone who can’t do this and can’t do that.”

(Manager of work agency)

Health and safety problems

Concerns about health and safety wereraised in over half the interviews. One in six interviewees highlighted health and safety as an area where agencyworkers received worse treatment. The main issues were:

poor quality and ill-fitting personalprotective equipment (PPE) – such asgloves which easily split

lack of appropriate PPE – such as warmclothing for workers in cold areas, orprotective gloves for people workingwith knives and frozen products, and

sharing PPE – having to share wet,sweaty or soiled overalls and bootswhich had not been cleaned or driedbetween shifts.

Workers spoke of pains to the limbs andextreme fatigue, partly due to the lack of jobrotation, which meant they had to carry outrepetitive tasks on fast-moving productionlines for extended periods of time.

“Working at a line, it’s really hard work,and the boxes are about 16kg, each, sothey’re quite heavy and my hands areswollen at the end of the day… andpainful… There are days I just cannot open the door, or even keep a glass in my hand. I can’t feel anything.”

(Polish female working in meat processingfactory, East of England)

Many migrant workers had either not beenprovided with health and safety training orhad been unable to understand it fully.

Only about three in five (59 per cent) firms said that their business provides the agency with a health and safety riskassessment of the relevant job roles before using staff. This is a mandatoryrequirement to ensure agency workers are placed in a safe environment.

Working time breaches

Some workers told us they worked everyday of the week without any days off. Wewere told:

the maximum number of hours workedper week, on a regular basis, was 90hours

of other workers regularly doing over60 hours and,

of individual shifts lasting 16–18 hours,with workers expected to start workagain after a few hours’ rest.

Even if workers have signed an opt out ofthe 48-hour maximum working week –which most agency workers do – they havethe right to at least one day off a week anda break of at least 11 hours between oneday’s work and the next.

13

The problems agency workers face

Other problems associatedwith agency labour

There are other aspects of agency workthat were commonly complained about.Although not unlawful, these are causes oftension and resentment between workers,because they do not apply to permanentworkers doing the same job.

Agency workers sent homefrom work

Many agency workers are told they are notneeded, either immediately upon arrivingat the factory, or after working part of ashift, due to overbooking of agency staff.They are frequently sent home withoutpayment despite many having spent timetravelling to work. Those at factories inrural locations reported having to waitunpaid for 10 or 12 hours until the agency-supplied transport could take them home.

Differences in pay rates

Around a quarter of processing firms said their pay rates are higher for directlyemployed workers than for agencyworkers. And less than a quarter offer thesame enhanced rates to agency workersfor doing overtime, or working weekendsand bank holidays.

Agency workers expressed theirfrustration about working alongsidedirectly employed colleagues who, at peakperiods, are being paid up to three timesas much for carrying out the same work.

Fewer and shorter breaks

Around one in six agency workers saidthey got fewer and shorter breaks thandirectly employed staff. They also gotunpaid breaks, whereas directly employedstaff were paid.

14


Most of the agency workers weinterviewed expressed somedissatisfaction with their agency, although there are some good practiceagencies taking considerable steps to help migrant workers in particular.

The problems agency workers areexperiencing with agencies, found in ourinquiry, build on those documented inseveral previous reports into agency and vulnerable workers generally(7).However, we did not anticipate the level of coercion and fear we found.

Paying agencies to find work

Around one in seven interviewees hadpaid their agency to find work for them, or knew someone who had done this.

It is unlawful for agencies in the UK tocharge a fee before finding work for anindividual, but no one who mentionedpaying to find work seemed aware of this.People with limited English language skills were more likely to be exploited in this way.

Coercion and threateningbehaviour

Some migrant workers had been forced towork – when they were tired after a longshift, ill or pregnant – under threat oflosing their job and any further work fromthe agency.

There were also reports of:

an agency entering the workers’ houseand waking up sleeping people to makethem work on their day off, and

agency managers standing at thefactory exit and turning back agencyworkers to force them to work overtimewhen they tried to leave the factoryafter their shift had ended.

“The Polish agency managers just treatus very badly… there was a situation whereone lady she’s been… asked to workovertime and she was tired after eighthours just standing in one place and thePolish manager said, ‘We have to sack, I think 20 people to make the rest realisethat they have to do it’.”

(Polish male working in meat processingfactory, Yorkshire and Humber)

It is a critical breach of the GangmastersLicensing Authority (GLA) licensingstandards to force or coerce a worker towork against their will.

Problems with holiday pay andtaking leave

A quarter of the workers we interviewedsaid they had had problems taking, andbeing paid for, their annual leave. This wasone of the most common problems peoplehad with their agencies.

Experiences of agencyworkers with agencies

15

Experiences of agency workers with agencies

“[The agency] says ok, you can go onholiday. When you go back they never payyou. If you argue ... the next day you don’thave the job.”

(Polish interviewee working in a factoryprocessing meat and poultry, EastMidlands)

Some agency workers thought onlydirectly employed workers received paidannual leave. A number of workers linkedthe problems they experienced takingtheir annual leave and getting holiday paywith a lack of information from the agencyon entitlements and how to obtain leave.

The legal minimum holiday entitlement is5.6 weeks, calculated from the number ofhours worked.

Problems getting full paymentfrom agencies

Some agency workers complained of notbeing paid their full wages. They eitherdidn’t receive the correct payment for thenumber of hours worked, or didn’t getenhancements they were entitled to. Allworkers, including agency workers, areentitled to receive at least the nationalminimum wage and it is a breach of theGLA licensing standards to withhold this.

Some workers who tried to contact theiragencies about failure to pay complainedabout being ignored, their calls notreturned, or being passed from one personto another. A small number felt that,because they were always underpaid, thiswas a deliberate ploy by the agency.

Deductions for housing

Direct provision of housing to agency staffhas fallen since 2007 when a maximumcharge for deductions was introduced.One-fifth of agencies do help migrantworkers find suitable accommodation.However, we heard allegations of housingbeing supplied at charges above the legalrate by third parties linked to agencies.Two workers told us that agencies theyhad been with gave them no choice but tolive in accommodation provided by theagency. This is a breach of the GLAlicensing standards.

“Before when I came into this country,when the [agency] bring us into thiscountry from Poland, in the contractthey’ve got a point where [we] must ... livein agency accommodation ... Those housesare very bad quality.”

(Polish male working in meat processingfactory, Wales)

Deductions for transport

A number of workers told us their agencywas charging them an unreasonableamount for transport.

“We were deducted money for transport,£7 a day...... so there were times weworked and we could earn just [enough]for accommodation and transport.”

(Polish male working in meat processingfactory, East of England)

Good practice agencies mentionedcompetitors who were subsidising theircharge rates by deducting high transportcosts from workers.

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Deductions by payroll‘umbrella’ companies

Many agency workers are required to workthrough a payroll company who pays thewages on behalf of the agency. The workersometimes gains a few extra pounds in the pocket per week because of a taxallowance scheme which takes them below the level at which they need to pay National Insurance.

However, this means that they will loseout later on when claiming any NationalInsurance related benefits and, as thepayslip below demonstrates, they can lose up to 10 per cent of their weekly wagein an administrative fee deducted by thepayroll company.

Example of pay slip issued by a payroll company

ETADEEYOLPMEREYOLPME

DEPARTMENT N.I. NUMBER & TABLE TAX CODE PAY METHOD PERIOD

SNOITCUDEDYAPSRUOHETARETAD OT RAEY

Total Pay 89.00 6.50 32.00 Basic 1 208.00 PAYE Tax 0.0000.0CIN00.98yaP elbaxaT00.42 nigraM allerbmU00.0xaT00.59 esnepxE feileR xaT00.0tiderC xaT

N.I. Employee 0.00N.I. Employer 0.00N.I. Pay 89.00

SAP 0.00SPP 0.00SSP 0.00SMP 0.00

00.59–snoitcudeD rehtO00.0eeyolpmE noisnePPension Employer 0.00

(T=Taxable, N = NI’able, B=Both)

9002/30/32rekroW ycnegA nAynapmoC lloryaP A

25wSCAB1306ycnegA kroW A

HRS TAXABLEPAYTAXABLEPAY DEDUCTIONS

NON-TAXABLEPAY

TOTAL PAY

ERSN.I.

00.4200.9800.23

184.00119.00

208.000.00 NET PAY

No tax or NationalInsurancededucted

A £24 ‘administrationfee’ deducted everyweek by this payrollcompany (over 10% ofthe wages)

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Additional problems for migrant workers

Around 70 per cent of workers supplied by work agencies to meat and poultryprocessing firms are migrant workers(8).The majority of workers we interviewedwere living with one or more members oftheir family.

We found that the problems andvulnerability migrant workers face asagency workers are substantially increasedby their migrant status.

Lack of understanding ofemployment documentation

Many agencies do not make sure thatworkers whose first language is notEnglish understand the documents theygive to them. And only one in eighttranslate key employment documents. We found that workers who did not have a copy of their employment documents, or did not understand it, were confusedabout their rights and also what rights,such as deductions from wages, they had signed away to the agency.

Despite the fact that over one-third of the migrant workers we interviewed did not understand the contents of thedocumentation their agency had giventhem, they felt under pressure to sign upto it. Some had asked family, friends orlocal advice agencies to translate it forthem afterwards, but none had refused to sign it beforehand.

Some never received a copy of thedocuments, in breach of the GangmastersLicensing Authority (GLA) licensingstandards, leaving them unsure as to whatthey had signed up to and with no meansof checking.

Different treatment based onnationality

Seven out of ten interviewees said theythought they were treated differently infactories or by agencies because of theirrace or nationality. A number of workerssaid that line managers favoured workersof their own nationality in terms of workallocation, work rotation, access topersonal protective equipment (PPE) andrecruitment to permanent positions. Thisperceived favouritism damaged relationsbetween different nationalities.

The most common complaint was unfairallocation of work. Interviewees told usthat some nationalities were consistentlygiven work which was harder, heavier ormore unpleasant.

One-third of interviewees described verbal abuse in the workplace, often as an everyday occurrence. Migrant workerscommonly described their experiences of verbal abuse as not being treated as ahuman being, but as a ‘animal’ or ‘object’.Some interviewees said that factorymanagers and agencies knew that migrantworkers would put up with poor treatmentas they had limited choices.

Additional problems formigrant workers

18


One voluntary sector organisationdescribed a ‘pervading culture of racialabuse’ in some processing firms. And anumber of interviewees saw the verbalabuse they received as racially motivated.

“This manager is coming and [shouting]‘you f***ing shit, you f***ing shit Polish’.They use the coarse [language] like this.We’re cutting small pieces off the meat,and if it’s some fat on this, managers comeand swear [at] people.”

(Polish female in meat processing factory,North West England)

Segregation by nationality

One of the challenges for processing firmsis to manage a highly diverse workforcewhere many migrant workers have limitedEnglish skills. A key approach appears tobe the segregation of shifts or productionlines by nationality.

Interviewees said that:

managers preferred particularnationalities for certain shifts as theyregarded these workers as ‘morereliable’ or ‘hardworking’

some firms attempted to managecommunication challenges or to avoidtensions by segregating shifts so that allworkers spoke the same language, and

some supervisors refused to havecertain nationalities working for themon grounds of race or colour.

“There was a [English] manager, and hejust didn’t like black people and if therewere some black people [sent from theagency], they were able to stay just one,two days and everybody knew that aftertwo days, you wouldn’t see a black guyagain… he [would] approach the black guyand ask him for his name. And when hegot his name in writing… the guydisappeared.”

(Polish female working in poultryprocessing factory, East of England)

Segregation on the grounds of nationalitycan amount to unlawful discrimination,and is also damaging to integration andinteraction between different nationalitiesboth in and outside the workplace.

Insufficient support withlanguage skills

Most workers told us their firm had notoffered them support to learn English (orWelsh, for workers in Wales). Less thanone-third of agencies offered advice onaccessing English lessons. Many migrantworkers found English lessons themselvesas they saw this as the key to finding betterwork and being able to interact moreeffectively with British colleagues. Lack offluency in English was consistently linkedto poor treatment, and inability to accessinformation and complaints procedures.

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Additional problems for migrant workers

Vulnerability to criminalexploitation

At its most extreme, a lack of knowledge of rights and barriers to complaining canlead to criminal exploitation of migrantworkers. In one instance a criminal gangcharged migrant agency workers £250 fora placement at a local poultry firm. Agencyworkers were then subjected to demandsfor increasing amounts of money and tosevere beatings if they were not able tokeep up with escalating payments.Hundreds of workers were affected and suffered in silence.

The police inspector who led thisinvestigation said that similar exploitationof migrant agency workers had also beenfound in 12 other police forces acrossEngland and Wales.

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We found that vulnerability is increasedby the interaction of a number of factorsincluding: being an agency worker, limited English skills, pregnancy, lack ofemployment status and unfair tax status.

Workers failing to makecomplaints

Workers are afraid of complaining, even in the limited number of cases where theyhave access to complaints procedures andunderstand their rights.

One-third of workers said they were afraidof complaining about poor treatment inthe workplace or by their agency. Thesewere mainly agency workers, fearful thatthey would lose their current job, or thatfuture work would be withheld as‘punishment’ for raising a complaint.Some workers told us about instanceswhere this had occurred. They alsothought that if they did complain theymight lose the chance to achieve their goal of transferring to direct employment.

“If someone employed by an agency[says] … he doesn’t like something with his job, they say, ‘Okay, you can go home,we’ve got 100 different people for yourplace.’...It is better to not say anything and just work, because after [making a

complaint ] I won’t get a job. They [theagency] don’t call.”

(Polish female interviewee working inpoultry processing factory, East ofEngland)

Only around half the workers weinterviewed said they knew who to go to if they had a problem in the workplace.

Most agency workers endure unlawful orundignified treatment on the basis thatthey feel powerless to achieve the resultthat they want, and do not think theproblem will be resolved without themsuffering penalties. In the minority ofcases where workers had complained they were dissatisfied at the response, as nothing appeared to improve.

Workers were much more likely to raiseconcerns in firms that provided a risk-freeenvironment for doing so, but we foundthat this sort of environment is rare. This is despite the fact that the firms who operated in this manner told us that listening to concerns from workershelped them operate more efficiently andsolve problems before they disruptedproduction.

The three-way relationship between theagency worker, agency and processing

What causes agencyworkers to be vulnerableto poor treatment?

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What causes agency workers to be vulnerable to poor treatment?

firm makes it difficult for complaints to surface, and where complaints areunresolved, presents additional difficultiesto agency workers trying to enforce theirrights.

Lack of awareness of anyproblems by firms

Employers are legally responsible for making sure discrimination orharassment, on grounds of nationality orrace, does not occur. But it appears thatprocessing firms are not taking steps toprevent or to remedy this because they donot even acknowledge the existence ofproblems. Nearly all firms said they wereunaware of the main concerns consistentlyraised by agency workers and did not evensuspect they occurred in their factories –harassment, discrimination, poortreatment of pregnant workers, tensionsbetween different nationalities, physicalassaults, and workers being victimised formaking a complaint.

Most firms had received no formalcomplaints from workers in the past 12months about these issues. They mainlythought this was because there were noproblems or, in a minority of cases, thatalthough there might be problems,workers didn’t think these were seriousenough to complain about. But workerstold us they were deeply affected by theirexperience of discrimination, harassmentand tensions, and it also damagedintegration and cohesion in the workplace.

The strength of our evidence indicates thatthere is no room for complacency in anyworkplace that includes a high proportionof low-paid, migrant workers.

A further problem is that processing firms and agencies are unsure who isresponsible for dealing with complaintsfrom agency workers. They were almostevenly split as to whether the agency orthe firm had the main responsibility fordealing with them.

Lack of employment rights

Many agency workers endure poortreatment in the hope of gaining directemployment under a contract ofemployment, and the rights associatedwith it.

Over half the workers supplied toprocessing firms are engaged under acontract for services. This is not a contractof employment and means that they donot have the rights that are exclusive toemployees. These include:

the right not be unfairly dismissed or unfairly selected for redundancy

the right not to be dismissed ordisadvantaged for exercising their right to health and safety

unpaid leave for family emergencies,and other paid or unpaid time off work in certain situations, and

statutory redundancy pay.

Unfair tax position

Despite having no employment contract,agency workers pay PAYE and have Class 1 National Insurance contributionsdeducted from their wages. We areconcerned that these very low-paidworkers are doubly disadvantaged, payingall the tax of an employee and receivingnone of the benefits, thus increasing theirvulnerability to any loss of income.

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Firms using agency workers toavoid employment obligations

Around a quarter of firms told us that one of the reasons they use agencyworkers is because this does not entail the obligations that come with directemployment. Firms using agency workersto avoid meeting employment obligationsare breaching the Ethical TradingInitiative (ETI) code, which states that:‘Obligations to employees under labour or social security laws and regulationsarising from the regular employmentrelationship shall not be avoided throughthe use of labour-only contracting’.

About six out of ten firms use agency staffall year round. A number of workers toldus they had worked continuously for anumber of years as temporary agency staffin the same factory in the hope of directemployment.

Processing firms told us the mostimportant reasons for using agencyworkers were:

to meet the needs of their customersbetter, and

to manage fluctuations in demand.

Cost savings are not the deciding factor forthe majority – indeed only around one-third of firms cited cost savings as animportant factor in recruiting and usingstaff supplied through agencies.

Firms told us that their ability to offerpermanent employment is affected byunpredictable fluctuations at short noticein supermarkets orders.

“Your agency are there just, because thesupermarkets are so, you know, one weekthey’ll say they want X amount ofthousand cases, and the next week thatwill drop off,....If the supermarkets’ordering system was a bit better, you couldsay right for the next 10 weeks I want thatamount of staff, we could recruit them.”

(HR Manager, poultry processing firm)

It is clear that agency labour plays animportant role in managing short-termfluctuations in demand. But the fact thatmost agency workers work in the samejobs, the same number of hours as directlyemployed staff, and are often used all yearround, suggests that they are not beingused just to cover peaks and troughs.

Managers in good practice firms said thatit was not ethical to keep a member of staffworking on an agency basis when theyweren’t covering fluctuations in demand.

Lack of awareness of existingrights

Lack of English language skills oftenmeans that workers do not understandtheir employment status or the rights theyhave. None of the migrant agency workerswe interviewed had any idea whether theywere working under a contract for servicesor as an employee of their agency. Overone-third of migrant workers could notunderstand the documentation they hadbeen given because it was only provided in English. Others had not been given anydocumentation by their agency.

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What causes agency workers to be vulnerable to poor treatment?

Lack of English language skills

Lack of English language skills meant thatmany workers:

did not understand instructions givenby managers, including on health andsafety issues

were constrained in their choice ofagency and unable to progress at work, and

suffered more verbal abuse in theworkplace.

Culture of abuse towardsagency workers in some firms

A significant proportion of theunacceptable and discriminatory practicein the workplace stems from treatment by line managers, but it is difficult toconceive that managers at a higher levelare not aware of incidents. In any event,under the Race Relations Act, employersare legally required to take reasonablesteps to provide a harassment-freeenvironment, regardless of theirknowledge of specific circumstances.

Some workers observed that linemanagers were themselves under pressureand saw verbal abuse as an everyday partof managing and motivating staff to meetproduction targets.

However, all workers agreed that agencystaff were much more likely to experiencethis type of abuse. In fact, intervieweeswho had moved from agency work todirect employment commented on thereduction in abuse directed at them.

A number of migrant workers linkedverbal abuse with a manager’s frustrationat their inability to speak fluent Englishand immediately understand instructions.Instead of finding ways to communicatewith workers, line managers oftenresorted to shouting and verbal abuse.

None of the workers submitting evidenceto the inquiry had experience of managerschallenging abusive or discriminatorytreatment of workers. Some highlightedthe lack of training for line managers as a factor.

In the good practice factories we visited,managers agreed that shouting andswearing at production workers, to makethem work faster or harder, was not onlyunacceptable, but also ineffective inmotivating them. They advocated well-trained managers leading by example in factories with a clear ethos of respect, in which shouting and abuse was nottolerated.

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As the Department for Business,Innovation & Skills (BIS) advised us,failures to meet workplace obligations can:

Contribute to a ‘race to the bottom’, ifbusinesses flout regulations in what is a low-skill, low-margin sector

Reduce business incentives to invest in technology and training, withpotentially adverse effects onproductivity and quality

Have an adverse effect on the health,safety and economic wellbeing ofworkers, and

Create community tensions.

Food hygiene

The evidence to our inquiry showed both alack of adequate training for some agencystaff and practices which disregarded foodhygiene.

Workers took the view that the constantpressure to increase line speeds and therate of work had an adverse impact oncompliance with hygiene standards.

“Constantly forcing people to rush. Forexample [if we] try to wash or to wearsomething [protective clothing], becausethis is a hygienic process, [working withfood], managers constantly pressure‘Move, move! Why are doing so slowly? I will dismiss you.”

(Polish male working in meat processingfactory, Yorkshire and Humber)

The Meat Hygiene Service (MHS)confirmed that inadequate training anddisregard for hygiene can result in:

contamination of the product

for the factory – inadequate cleaningand disinfection standards

for the worker – health and safety risks, and

for the consumer – depending upon thelevel of contamination, from foodpoisoning to serious illness and death.

The MHS stressed the importance ofprocessing firms ensuring that trainingwas understood by all staff, includingthose whose first language is not English.

The impact of poor practiceson workplace inclusion

Over half of workers reported tensionsbetween different nationalities and limitedintegration in the workplace. Indicators ofpoor inclusion in the workplace included:

verbal abuse related to nationality

arguments, sometimes resulting in fistfights, between workers of differentnationalities

exclusion and isolation of particularnationalities, and

segregation (both by shift, and self-segregation during rest periods).

The impact of poorpractices

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The impact of poor practices

However, most migrant workers weinterviewed were positive about theirexperience of life in England and Walesand their interaction with members of thelocal community, describing relationshipsas being more positive in the communitythan in the workplace.

“When we moved, the neighbour, … anEnglish person, they even helped us [sortout problems] with the electricity… my son plays with the kids in the street andeverybody gets along together nicely,there’s no problem.”

(Portuguese female working in poultryprocessing factory, East of England)

Factors which are adverselyaffecting inclusion

The workplace tensions appeared to beinfluenced by a number of factors,including:

Failure to address harassmentand discrimination: Working in anenvironment where harassment anddiscrimination were commonplace, andwent unchallenged, deepened divisions.

Lack of language skills: A lack of proficiency in English for someworkers, combined with insufficientaccess to English language training, isreducing integration and cohesion inthe workplace.

Pay differences: Some directlyemployed workers resent agencyworkers because the lower pay theyreceive is viewed as depressing wages.Agency workers also told us of being onthe receiving end of this resentment.

Using agency workers to doovertime: Permanent workers see theuse of agency workers to do overtimeand ‘premium shifts’ more cheaply to be reducing their own opportunity forovertime. Businesses with 500 or moreworkers are three times more likely touse agency workers to do overtime,compared to businesses with less than500 workers. Agency workers are alsomore likely to do overtime in businessesthat supply supermarkets.

“There’s now a lot of resentment fromEnglish against the foreigners coming inas well, because of the current climatewith the credit crunch… and thinking thatthey’re taking their work. But the agencyand the management of the site… they’renot doing anything… I think it [could] be atime bomb ready to go off to be honest.”

(British male working in meat processingfactory, North West England)

Segregation by nationality: Reportsof segregated workplaces includedevidence submitted by the Polish-WelshMutual Association which stated thatWelsh and Polish workers are typicallysegregated on processing lines. Thispractice, and the consequent lack of interaction between differentnationalities, increased the scope forperceptions that the other nationalitywas being treated more favourably.

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Good practice in promotinginclusion

We found examples of firms who managedto promote positive relationships betweennationalities in the workplace. They had asimilar range of nationalities working forthem as firms experiencing tensions,which clearly shows that hostility betweennationalities in the workplace is notinherent but can be avoided throughtargeted action.

This good practice included:

Company ethos: Company policiessetting out the firm’s commitment to dignity at work, linked to clearexpectations of behaviour. These were communicated to all workers atinduction, and consistently enforced,and were seen as important inpromoting inclusion in the workplace.

The role of managers: Workershighlighted the role of line managers in promoting interaction and cohesionin the workplace. They mentioned theimportance of creating inclusive teamswhere workers of all nationalities feltpart of an organisational whole.

Promoting cohesion betweennationalities in the workplace

Firms have various ways of dealing withlanguage barriers in the workplace. Someemploy interpreters. Others provide

English language lessons. This all helps tobuild skills and confidence and developpositive communication.

Other positive steps taken by firmsincluded:

Promoting interaction between workersof different nationalities – even settingup factory sports teams, where migrantand British workers played alongsideeach other, such as at Dalehead Foods.

Good practice by agenciesand processing firms

Dealing quickly with incidents causedby tensions between nationalities.

Providing information to help migrantworkers integrate into the workplaceand community – such as translatinginformation about charity fundraisingevents into several languages toencourage participation.

Factory football team at Dalehead Foods

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Managing agency workers well makes good sense for business

Agencies and firms which promote goodpractice told us of the business benefits –such as attracting, retaining and being in aposition to supply workers who are well-motivated, loyal and increasingly skilled.They become employers of choice, who areable to protect the reputation of their ownbrand products by eliminating exploitation.

One firm that was frequently mentioned as an employer of choice for agencyworkers was Bernard Matthews. This was because of the respect for, and lack ofdifferentiation between, agency staff anddirectly employed workers, and the stepstaken to promote good relations betweendifferent nationalities. Some agencies havesimilarly developed a positive reputationas supportive of migrant workers, withword-of-mouth recommendations beingpassed to others.

Examples of good practice

Good practice work agencies and meatprocessing firms took steps to address thecommon problems agency and migrantworkers face in several areas:

Pay and conditions

By paying agency and directly employedworkers the same for carrying outsimilar work.

By ensuring that workers were paid fortheir travelling time if they arrived atwork, but were not needed.

Some processing firms carried outdetailed checks on agencies beforeusing them, to ensure high standards.

Making sure workers can raiseany issues

By providing a confidential hotline forworkers with issues of concern.

Taking steps to make sure workersunderstand their employmentdocumentation and that it is accessible.

Engaging workers on contractsof employment

Some agencies offer contracts ofemployment to their workers. These not only bring significant advantages in terms of security and employmentrights in the workplace, but alsobenefits outside the workplace, enabling workers to secure betterrooms from landlords and mobilephone contracts.

Support for migrant workers

Most work agencies provide a range ofsupport to migrant workers, includingadvice on opening a bank account (82

Managing agency workerswell makes good sense forbusiness

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per cent) and help in obtaining theirNational Insurance number (82 percent). Around half of agencies provideinformation about the local communityand offer advice on registering with a GP.

Some agencies provide English lessonsor participate with local colleges. Othersemploy recruitment consultants withlanguage skills for the benefit ofmigrant workers. Larger recruitmentcompanies are more likely to offer arange of support.

Ethos of dignity and respect inthe workplace

We found evidence of some firms that:

train managers to positively motivatetheir workers, resolve conflicts andmanage diversity

create a positive ethos where the rightsof all workers were respected and poorpractice dealt with quickly andtransparently

allocate a ‘buddy’ to new workers tohelp them integrate with the workforceand learn skills.

Ensuring health and safety

Firms use various methods to make sure migrant workers understand healthand safety information. This includesproviding translated training documents,even using picture cards supported withverbal instructions in other languages.

It can be done…

The wide variation in practice betweencompanies, and sometimes acrossdifferent sites within the same company,shows that the challenges of overcomingcommon problems can be, and are, met bysome firms and at some sites. But firmsmust first be willing to recognise the issuesand take targeted action.

We found that this willingness sometimesstems from a company’s own ethos ofdignity and respect, and sometimes frompressure from the supermarkets theysupply. Regardless of what had motivatedthem to take good practice steps, firmstold us about the business benefits, notleast that of a well-motivated, skilled andstable workforce.

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Why the current system and planned initiatives are not sufficient to prevent abuse

A fair, competitive environment sothose traders who comply with andmaintain standards can operate without disadvantage.

Supermarkets taking greaterresponsibility for improving poorpractice in their supply chains.

Agencies, firms and supermarketsmaintaining standards and reportingany breaches to the regulators.

Union protection for workers.

Abuses are not coming to light

Abuses of workers, and the poor standardsthat allow unethical companies to undercuttheir competitors, are not coming to light.This is principally because of the barriersthat prevent workers from complaining,either internally or to a regulatory body.

Complaints will only surface if theinsecurity of employment that detersagency workers from complaining isaddressed. Workers need protection fromlosing their job, both through legislation,and by processing firms making acommitment to give them a permanentcontract where this is practical.

Current government initiatives – such as raising awareness of rights and a

It is clear that the current system is notworking adequately to prevent unlawfuland unethical treatment of agency workers by agencies, or by the firms they are placed with.

This is not because the legal, licensing orethical standards for agencies and firmsare generally too low. Indeed many of theproblems would be eradicated if theGangmasters Licensing Authority (GLA)licensing standards and equality and otherlegislation were properly complied with byagencies and processing firms.

The prevention of the abuse of workers inthis sector is dependent on a combinationof essential factors:

Abuses coming to light through workersraising concerns with the agency orworkplace, and if they are not resolved,with a regulator.

Agency workers having legal protectionin the workplace from discriminationon the grounds of their race, gender,disability, age, sexual orientation, race or religion regardless of theiremployment status.

Effective, adequately resourcedregulators – particularly the GLA – to ensure consistently enforcedstandards for agencies.

Why the current systemand planned initiatives arenot sufficient to preventabuse

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confidential helpline – cannot address thewhole problem of complaints failing tosurface, since lack of awareness of rights is only part of the cause. And given theproportion of workers that are afraid ofmaking complaints, any system whichplaces the principal onus on vulnerableworkers to raise issues will face problems.

Although further protection for agencyworkers will come into force next year, thiswill not address agency workers’ insecurityof employment, particularly the majoritywho do not have an employment contractwith their agency. Neither the existing norforthcoming legislation addresses this lackof employment protection.

When the Agency Workers Regulations are implemented in October 2011, agencystaff will have the right to the same pay,holidays and other basic workingconditions as directly employed staff after 12 weeks in a given job. But they will still have no right to have their jobmade permanent after that period, or even after a year in the same job.

Some good practice firms give agencyworkers a permanent contract after theyhave done three or six months work. Butothers continuously use the same agencyworkers for months or years, rather than to cover peaks and troughs. As ourevidence shows, workers become far lessvulnerable, and much more confident to raise concerns, once they have apermanent contract.

The government cites the flexibility ofagency work as an advantage for bothemployers and workers and the reason for not changing the employment status of agency workers. However, our inquiryfound that agency work does not provide

flexibility for low-skilled, low-paid agencyworkers; the converse is the case. They feelobliged to work any hours requested ofthem regardless of other arrangements,fatigue, holidays or illness. TheCommission supports the need forflexibility in the workforce, but not at theexpense of equality, dignity and respect.

Legal protection fromdiscrimination in theworkplace

We are also concerned about the lack oflegal clarity about the situations in whichagency workers are protected fromdiscrimination and the gaps in their legalprotection. For example, the Court ofAppeal judgment in Muschett v HMPrison Service(9) suggests that, in typicalagency worker arrangements, the workeris not legally protected from dismissal ordisadvantageous treatment on a protectedground, such as race or pregnancy. Thelegislative gap in the protection of someagency workers needs to be closed and thelegal situation for all agency workersneeds to be clarified.

An effective, adequatelyresourced regulator to ensureconsistently maintainedstandards for agencies

The scope for businesses to gain perceived economic advantage based on discrimination, exploitation andillegality needs to be removed.

The principal regulator of agencies in thissector is the GLA. The GLA was set up in2005, as a direct response to the tragedyof the cocklepickers in Morecambe Bay, to curb the exploitation of workers in

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the agricultural, horticultural, shellfishgathering and associated processing andpacking industries (the ‘regulated’ sectors).

Almost two-thirds (64 per cent) ofagencies thought that the GLA had helpedto improve the standards in work agenciesand labour suppliers. However, goodpractice agencies, firms and supermarketstold us they would like to see moreenforcement activity by the GLA. Almosttwo-fifths (38 per cent) of agenciesthought that there wasn’t enoughenforcement activity, while only just over one in five (22 per cent) thoughtthere was enough or too much.

It was widely recognised that the GLA’sability to eliminate labour problems fromthe meat processing sector is hampered bya lack of resources.

“I think they [GLA] have had a fairlypositive influence, but the reality is thereare not enough of them.”

(HR manager at a poultry processing firm)

It is maximising the use of its resources by developing a voluntary agreement with supermarkets and suppliers – theSupermarket and Suppliers Protocol –which will help to ensure that all parties in the food supply chain participate inupholding the GLA licensing standardsand reporting breaches. Both processingfirms and agencies told us they welcomedthe Protocol on the grounds that it wouldestablish ‘common ground rules for all’,and expose those organisations thatsought to exploit agency workers.

We therefore urge all supermarkets andsuppliers to sign up to this agreement.

A fair, competitiveenvironment in whichconsistent standards areenforced

A key theme to emerge was the frustrationof processing firms operating within thelaw and promoting good practice aboutbeing undercut, in a very competitivemarket, by less scrupulous companieswhich did not maintain the same labourstandards.

Agencies frequently expressed frustrationat the ability of competitors to undercutthem by acting unethically and unlawfully.They were also extremely frustrated with a perceived lack of action from regulatorybodies to prevent these practices, which they considered to be seriouslyundermining fair competition and creating disincentives to act in a lawfuland ethical manner.

The major business concern among the agencies and processing firms was that they were not competing on a levelplaying field.

Some faced a stark choice betweentrading as ethically as they wished andobtaining contracts.

Some complained of competitorsemploying a wide range of unethicaland/or unlawful practices to keep theirwage and tax bills down.

Scope for undercutting

The difficulty in maintaining minimumstandards is increased by the legitimacy of tax allowance schemes which arefrequently abused. Businesses stronglyobjected to the use by some agencies of

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travel and subsistence schemes whichpermit the deduction of expenses that bearno relation to the travel or subsistencerequired, and are not required to bejustified by HM Revenue and Customs.

These schemes allow unethical agencies toundercut more ethical rivals by supplyinglabour at below the guideline minimumrates published by the GLA. The GLAindicative rate is defined as:

...the Minimum feasible rate that a workagency would be likely to charge to meetlegal obligations relating to employment of workers (not including managementfees or profit).

From 1 October 2009, the indicativehourly charge rate for supplying workersover the age of 22 at the nationalminimum wage is £7.51 an hour.

There may be exceptional circumstancesin which work agencies will be able to fulfiltheir legal obligation to workers and stillcharge below it, but the indicative rateprovides the most transparent indicationthat agencies may be depriving workers oftheir entitlements. Two thirds of agenciessaid that they had been undercut bycompetitors supplying labour at less thanthe GLA Indicative rate in the past year.

A number of agencies do not think thatcurrent margins allow for compliance withlabour laws, and they attribute this tosupermarkets driving their prices, andtherefore their margins, down. Somethought that the downward price pressureexerted by supermarkets and the way theywent about ordering products fromsuppliers brought about the conditionswhich supported unethical traders.

Supermarkets taking greaterresponsibility for change

A number of agencies and processingfirms highlighted what they saw as thesignificant power of the supermarkets on practices in the meat and poultryprocessing industry and the agencies that supply them with labour.

1. The supermarkets are, in reality, morepowerful than the government andtheir mountain of legislation.

2. It’s an opportunity for supermarkets touse their power and influence on theirfood manufacturing suppliers for thegood of agency workers, that is, toencourage best practice.

3. The supermarket as the ‘client’ is king,and can really force producers to useonly reputable agencies. It will preventsuppliers using agencies that attemptto flout both GLA and AWD (AgencyWorkers Directive) rules.

4. Only the supermarkets have theleverage to force compliance.

Agencies responding to survey

The role of supermarkets

Our findings show that supermarkets havean important part to play as:

80 per cent of processed meat issupplied to supermarkets, and

the main reason for using agency staff is to meet supermarket demand.

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Agencies and processing firms told us they would like increased action fromsupermarkets to help level the playingfield. The main ways in whichsupermarkets can bring aboutimprovements are:

Supporting the GLA under theSupermarket and Suppliers Protocol.

Setting standards for their suppliers.

Ethical auditing of their supply chains.

Working co-operatively with supplierson production demands.

Dissemination of positive practice.

Variance in standards set bysupermarkets

Some supermarkets set higher standardsfor their suppliers than others.

Most but not all supermarkets have signedup to the Ethical Trading Initiative (ETI)base code, which contains minimumvoluntary labour standards. Somesupermarkets simply require minimumcompliance with the law and ethicaltrading standards, such as no physical or mental mistreatment of workers.

But others insist on more. Even wherethere is no legal imperative, somesupermarkets are challenging suppliers to operate fairly towards workers andmaintain their dignity.

“In particular we expect suppliers to ...respect the wellbeing of their employeesby treating employees fairly, honestly andwith respect for their basic human rights.”

Waitrose

Examples of practices which are notunlawful but detract from dignity include:

‘hotbooting’ – the practice of oneworker having to step into the boots of the worker leaving the previous shift, and

requiring workers to wait for extendedperiods for permission to use the toilet.

The assumption that requiring higherstandards from suppliers will significantlyaffect the bottom line of supermarkets, andlead to the consumer paying more for meatproducts, is incorrect. For example ASDAhas calculated that encouraging suppliersto pay agency workers in this sector thesame as permanent staff doing similarwork from their first day will increase theirpurchasing costs by a relatively smallfraction of the overall turnover.

The importance of ethicalauditing by supermarkets

It is important that these standardstranslate into real improvements foragency workers on the production lines.Supermarkets have the power and abilityto do more to carefully audit the practicesof their suppliers. If they find evidence of illegal or unethical behaviour in aprocessing firm, or any agencies supplyingthat firm, they can insist on improvements.The more product they buy from asupplier, the more leverage they have.

We found that the current system ofethical auditing by supermarkets is notuncovering the problems in the agencysupply chain, despite almost exclusivereliance upon these audits as the tool formonitoring the supply chain. Ethicalaudits are not giving a true snapshot of the range and extent of problems facing

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agency workers. There are several reasonsfor this:

The current risk assessment is based on worldwide labour conditions, suchas in India and China, and needsrecalibrating for the UK.

There is no standard audit methodologyfor auditing under the ETI base code.

The reliance on self-audits completedby meat processing firms as the primarymeans of flagging up issues of concernand for supermarkets to assess whethera firm’s standards pose a risk.

ASDA, for example, stopped using selfauditing around 6 years ago on thebasis that ‘self audits are not worth the paper they are written on’.

External audits, although likely to bemore reliable than self-audits, are notalways conducted by auditors who aresufficiently skilled in identifying issuesof discrimination and harassment.

Other factors withinsupermarket’s capacity

There is a need for retailers to workmore closely with their suppliers to helpthem establish greater predictability intheir labour demand.

“[Firms] commonly expressed the view that their retail customers do not fullyappreciate how market dynamics drive lowpay, short notice overtime and the use ofagency workers within their businesses.Price, lead times and product promotionswere all cited as factors that canundermine a supplier’s ability to meetethical employment standards.”

ETI written evidence

Although supermarkets are positivelydisseminating good practice to theirsuppliers through conferences andother means, this does not appear to be reaching managers in charge ofprocessing lines. But supermarkets arestarting to address this, for example,Marks & Spencer are trialling asupervisor training package inconjunction with the ETI.

The role of processing firms inupholding standards

The high proportion of agency workerswho told us they had experienced poorand often unlawful treatment by agenciesindicates there is insufficient scrutiny ofagencies by processing firms before usingtheir labour. Firms also fail to monitoragencies on an ongoing basis.

Nearly all processing firms said theygathered some information about workagencies before using their workers.However, one in seven firms do not findout if the agency they are using is GLAregistered. Using an unlicensed agency isillegal and carries the risk of a criminalprosecution and a fine. It is a concern thatthese firms appear to be ignoring theirlegal responsibilities.

Although most processing firms doestablish the rates of pay and terms andconditions, around one-fifth use agencyworkers without first finding out whatterms and conditions the agency providesto its workers.

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Good practice firms told us of the detailedongoing auditing systems they had set up to make sure agencies were of a highstandard and met legal requirements. Thevast majority of meat processing firms usebetween one and four different agencies,with a third relying on only one agency. So it would not be onerous for all firms tointroduce systematic processes to makesure agencies comply with the law andoperate ethically, and to monitor this onan ongoing basis.

Union protection for workers

In workplaces where unions arerecognised, or have a strong presence, we found that they provide a significantdegree of protection for workers.

Data from our survey of meat processingfirms indicates that firms with unionrecognition agreements implementpractices that could be expected topositively address some of the issuesraised. For example, firms with unionrecognition agreements are more likely to take the following measures than those without:

To consider the quality of work agencies and the agencies’ treatment of workers as being an important factor in choosing an agency.

To translate key documentation, such as employment contracts andcomplaints procedures.

To recognise the potential existence of issues that the firm should address,such as limited interaction betweenworkers of different nationalities andharassment.

To receive formal complaints on a range of issues, including workersbeing shouted or sworn at. Thisindicates that workers are aware of, and more prepared to use, complaintsprocedures in these workplaces.

Agency workers are generally not coveredby collective agreements. Therefore Unite the Union is seeking to negotiateminimum standards for them with anumber of employers and has successfullynegotiated an agreement with BernardMatthews. These minimum standardswould remove many of the problems anddifferentials in treatment faced by agencyworkers.

However, many agency and migrantworkers said they were unaware of thepresence of any union, or that that theunion could help them. Many suggestedthat unions could do more to reach out to them. But others observed a hostileattitude to the role of trade unions in theirworkplace. Some interviewees highlightedinstances where the hostility of firms tounion activity resulted in workers beingunwilling to act as union representativesfor fear of retribution.

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What needs to be done

We are making recommendations to thekey bodies in the industry – supermarkets,work agencies, processing firms, and theirnational representative bodies – toencourage a systemic change in behaviour.Our recommendations are also aimed atregulatory agencies, the government, andtrade unions.

The recommendations are designed toensure a level playing field for businessesand to protect vulnerable workers fromthe problems identified in our findings.Their emphasis is to reduce the onus onvulnerable individuals to challenge theagency or meat processing firm when theyare discriminated against or treatedunfairly.

Our recommendations address the needto:

Reduce the causes of vulnerability.

Hold organisations to account.

Promote equality, human rights andgood relations.

Recommendations to reducethe causes of vulnerability

To reduce job insecurity

As our findings showed, a key source ofvulnerability is the insecurity caused bylack of employment protection and rights.We recommend that:

1. Work agencies offer contracts ofemployment to workers engaged bythem where possible.

2. Processing firms regularly review their use of agency staff to ensure that they offer agency workers directemployment when being used on anongoing basis, rather than to deal with short-term fluctuations.

3. Processing firms do not use agencystaff to avoid the obligations whichcome with a regular employmentrelationship, in compliance with the Ethical Trading Initiative (ETI)base code.

4. The government reconsiders the extentof employment protection and rightsthat agency workers engaged oncontracts for services require in orderto reduce their vulnerability to losingtheir job if they raise any concern.

The way forward

37

The way forward

To protect agency workers fromdiscrimination in the workplace

5. All agency workers should have the same degree of legal protection as permanent employees fromdiscrimination on any of the protectedgrounds. This should be the caseregardless of whether:

they have a contract of employmentwith the agency or are engaged under a contract for services

the work agency or the end user isresponsible for the discrimination.

6. We recommend that:

All processing firms take steps to ensurethat the culture in their workplace is onethat actively tackles harassment anddiscrimination and promotes an ethoswhere discrimination is viewed by all as being unacceptable, including thefollowing actions:

implementing an equal opportunitiespolicy,

providing diversity and equalityawareness training to staff,

providing specific training andguidance for line managers, includinghow to manage pregnant workers andworkers of different nationalities

ensuring that all staff have access to aconfidential complaints and grievanceprocedure.

To address lack of understanding of employment rights anddocumentation

In our view it is essential that all workershave a clear understanding of their termsand conditions of work. The InternationalLabour Organisation (ILO) recognises theimportance of migrant workers beingprovided with written contracts ofemployment in language that they easilyunderstand, as a means of preventingforced labour(10).

We recommend that:

7. The Gangmasters Licensing Authority(GLA) includes, as a licensingstandard, a requirement for agencies totranslate key employment documentsinto a language the worker easilyunderstands or to take alternative stepsto ensure that the worker understandsthe contents of the documents.

8. The government explores methods of making standardised informationavailable online that can be downloadedby companies, in the main languagesspoken by migrant workers, to minimisecosts to individual companies.

9. The Department for Business,Innovation & Skills (BIS) consider the requirement for standardisedinformation on pay slips, so thatworkers understand any deductions.

In relation to agency workers’ difficultiesin understanding and taking their holidayentitlement, we recommend that:

10.Pay slips issued by agencies includedetails of the amount of accruedholiday entitlement.

11. BIS give a greater focus to raisingworkers’ awareness of their rights to holiday pay.

38


Helping vulnerable workers to raiseissues of concern

Some processing firms and supermarketsprovide confidential hotlines for workers.We recommend that processing firms andagencies:

12. Provide workers with a confidentialand well-publicised process for raisingissues of concern in a language theyunderstand. This should be done aspart of an integrated approach toproviding an environment in whichworkers feel confident to raise issuesinformally and formally.

13. Display or distribute information andcontact details of the Pay and WorkRights Helpline and GLA to workers.

As the three-way relationship between theagency worker, agency and processingfirm causes uncertainty as to who isresponsible for resolving problems, werecommend that:

14. BIS issue guidance to clarify thecircumstances in which the agency hasprimary responsibility for dealing witha worker’s problem, and those in whichthe processing firm has primaryresponsibility.

Given the reluctance of workers tocomplain for fear of suffering penalties:

15. The Commission use its strategiclitigation powers to highlight theunlawful victimisation of agencyworkers for making complaints about discrimination.

Promoting integration and moreeffective working and reducingvulnerability through Englishlanguage provision

We recommend that:

16. Processing firms and agencies provideworkers with access to ESOL classes,where needed, at times and locationsthat best facilitate participation andlearning.

17. Processing firms assess migrant workers’knowledge of English and literacy inorder to develop and deliver appropriateworkplace communication, includingtraining packages and signage.

Forthcoming improvements as aresult of the Agency WorkersDirective

The Agency Workers Regulations 2010need to provide practical, rather thantheoretical, protection for agency workers.So we recommend that:

18. The government ensure that theprimary responsibility for checking thatthe worker is receiving parity after 12weeks lies with the agency, rather thanthe onus being on each agency worker.In addition that agency workersunderstand and can access their rights.

To enable agency and migrantworkers to gain the benefits of unionactivities

We recommend that:

19. Trade unions should build on the workthey are already doing in recruiting andsupporting migrant workers with widerwell-resourced organising campaignsaimed at vulnerable workers, especiallyin sectors where precarious, low paidemployment is common.

39

The way forward

Recommendations to holdorganisations to account

Ensuring adequate regulation andenforcement

We recommend that:

20. The government ensures that the GLAis funded at an appropriate level todeliver its remit and deal with thewidespread breaches of licensingstandards revealed by this inquiry. As a minimum the recent increases in staffing should be maintained.

Upholding the GLA indicative rate

We recommend:

21. The GLA provide guidance to workagencies clarifying that, if they areasked by a processing firm to providestaff at less than the GLA indicativerate, or are aware of other agenciesdoing so, they should inform the GLA.

22. The Recruitment and EmploymentConfederation (REC) and theAssociation of Labour Providers (ALP) reinforce this guidance to their membership.

Ending abuse of tax-free allowances

To increase transparency about workerspay, and remove grey areas that are opento abuse, we recommend that:

23. HM Revenue & Customs review the need for non-transparent taxallowance schemes which allowunethical agencies to supply labour at very low rates, and undercut moreethical rivals.

24. Enforcement work in respect ofumbrella companies who abuse tax free allowances for workers isprioritised and appropriatelyresourced, with publicity ofenforcement activity so as to raise awareness of this issue.

Forced labour

We recommend that:

25. The GLA be given formal authority andappropriate resources to investigatethe new offence of forced labour whenthe legislation comes into force.

26. The government produce guidance for work agencies and employers onforced labour, including clarifying thecircumstances where the actions ofrecruitment consultants, includingforced overtime, can amount to forced labour.

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Health and safety

We recommend that:

27. The Health and Safety Executive(HSE) address the issues raised by ourinquiry through targeted complianceand enforcement action.

28. Processing firms take steps tosafeguard the health and safety ofagency workers, including:

always providing work agencies with a health and safety risk assessmentbefore sourcing their workers

working with agencies to make sureagency workers get the training andequipment they need to carry out theirwork safely

ensuring health and safety training isclearly understood by all participants,including those with limited Englishlanguage skills.

29. Processing firms take steps tosafeguard the health and safety ofpregnant workers, including:

carrying out individual riskassessments for pregnant staff,including agency staff, and providingsuitable conditions for pregnant womento continue work, where possible.

Supermarkets

Retailers that require higher standardsfrom their suppliers are concerned not tobe undercut by retailers who do not applysimilar standards.

We recommend that:

30. Those supermarkets who are notcurrently members of the ETI sign up to the ETI base code in order toprovide a basis for consistency ofstandards, and

31. All supermarkets encourage suppliersin their supply chain to adhere to theGLA Supermarket and SuppliersProtocol, including passing on anyserious breaches of GLA licensingstandards, revealed by ethical audits,to the GLA.

32. To enable supermarket auditingsystems to drill down the supply chainmore effectively, we recommend thataudits are:

made appropriate to the risks in the UK

not reliant on a system of self-assessment

carried out by skilled auditors with theexperience and investigatory skillsnecessary to identify issues highlightedin this report, and

able to overcome the factors which arepreventing agency workers giving anaccurate picture of the conditions inwhich they work.

33. We also encourage supermarkets towork more closely with suppliers todevelop sustainable approaches toordering which support the increaseduse of regular employmentrelationships.

41

The way forward

Recommendations to promoteequality, human rights andgood relations

Recruitment

To guard against potential discriminationin recruitment, we recommend that:

34. Agencies adopt a comprehensive equal opportunities policy which iscommunicated to clients and peopleseeking work through the agency, andis understood by all employees of theagency. The policy should make clearwho to complain to if the policy isbreached.

To ensure fair, transparent and non-discriminatory recruitment to permanentemployment, we recommend that:

35. Processing firms implement equal andtransparent systems for recruitingstaff, in particular the criteria andprocesses used in moving agencyworkers to direct employment. Theseshould be communicated to agencyworkers and included in contractsbetween processing firms andagencies. Managers should receivetraining in their operation.

36. Processing firms monitor theoutcomes of their recruitmentpractices to ensure that particulargroups, including British workers, are not disadvantaged.

A greater reliance on Jobcentre Plus for recruitment into this sector wouldincrease the range of options for agencyworkers seeking permanent work andenable processing firms to reach a wider range of potential workers. Werecommend that:

37. Jobcentre Plus consider how they canbest meet the needs of meat processingfirms looking for staff, with a view toincreasing the supply of workersthrough Jobcentre Plus.

Discrimination and coercion

Work agencies and processing firmsshould:

38. Provide training to recruitmentconsultants and managers on theirduty not to discriminate against,harass or coerce agency workers

39. Treat acts of discrimination,victimisation and coercion by theirstaff as a disciplinary offence.

Work agencies should:

40. Make sure all recruitment consultantsand managers understand thatcoercion of agency workers is contraryto the GLA’s licensing standards andcould result in the agency losing itslicence.

42


Promotion of cohesion in theworkplace

We recommend that:

41. Processing firms and work agencies,supported by the government andsupermarkets, take steps to promotecohesion in the workplace in thissector. Providing support to improveworkers’ English language skills is akey step in this.

As differences in pay rates betweenagency and directly employed workerscan generate hostility betweennationalities and undermine goodrelations in the workplace, werecommend that:

42. Processing firms consider introducingpay parity between agency workersand permanent staff carrying out likework from day one, includingenhancements paid for overtime,weekend and night work.

Training

As part of an integrated approach toequality, cohesion and dignity at work, we recommend that:

43. Processing firms provide supervisorsand managers, particularly first linemanagers, with appropriate training toenable them to operate in a way whichpromotes equality and cohesion andrespects the dignity of workers.

44. Supermarkets support processingfirms in their supply chain withtraining programmes specificallyaimed at supervisors and linemanagers, and build on current ETIinitiatives which promote equitablemanagement practices.

Ethical Trading Initiative (ETI) andfuture work

So that this sector can agree consistentstandards with a view to providing a levelplaying field, we recommend that:

45. The government work with the ETI to set up and lead a representativeindustry task force to producestandardised recruitment andemployment practices for the meat processing industry.

46. This task force includes tradeassociations and other representativebodies, supermarkets, regulatorybodies, including the GLA and theCommission, selected work agenciesand processing firms, the TUC, theChartered Institute of Personnel andDevelopment (CIPD) and relevanttrade unions.

The issues on which consistent standardswould benefit the industry to cover theprinciple issues on which practices differ,including:

pay parity, and when overtime ratesare applicable

the period of service after which acompany should positively considermaking a worker permanent, and

the development of a standard audit methodology based on aninvestigatory approach for auditingunder the ETI base code.

47. Key bodies in the sector, including thesupermarkets, should increase thesharing of best practice in areas ofconcern highlighted by this inquiry.

43

The way forward

Reviewing the implementation ofthis report’s recommendations

48. Twelve months after the launch of this report, we recommend that the Commission:

reviews the extent to which relevantbodies have effectively implementedthe report’s recommendations, and

takes enforcement action asappropriate.

Licensing and regulation of agenciesin other sectors

49. Although outside the scope of thisinquiry, we believe that there is a case for broadening the GLA’s remit to include other sectors wherelow-paid agency workers are at risk of exploitation, and we encourage the government topositively consider this.

44


References1. Food and Drink Federation https://www.fdf.org.uk/statsataglance.aspx

2. Improve, Meat Production, Processing & Preserving, Labour market Informationprofile 2008.

3. Source: Hybu Cig Cymru - Meat Promotion Waleshttp://www.hccmpw.org.uk/news_and_events/newsstory.aspx?k=newsstory-A222B25D

4. Improve, 2009, Meat Production, Processing and Preserving Labour MarketInformation Profile 2009/2010 http://www.improve-skills.co.uk/downloads/research_lmi/Sub_Sector/Meat-2009-template.pdf

5. Red Meat Industry Forum, A Guide To The red meat supply chain,http://www.redmeatindustryforum.org.uk/supplychain/

6. The REC Annual Industry Turnover & Key Volumes Survey 2007/08.

7. ECCR (The Ecumenical Council for Corporate Responsibility) Vulnerable MigrantWorkers: The Responsibility of Business (May 2009).

Oxfam Briefing Paper 31 July 2009,Turning the Tide - How best to protect workersemployed by gangmasters, five years after Morecambe Bay.

Agency labour in the UK poultry sector: A research report for the Ethical TradingInitiative, Ergon Associates and Working Lives Research Institute (May 2007).

Hard Work, Hidden Lives, TUC Commission on Vulnerable Employment (May 2008).

8. We have used the definition of ‘migrant worker’ adopted in the InternationalConvention on the Protection of the Rights of All Migrant Workers and Members ofTheir Families as ‘a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a State of which he or she is not a national’.

9. Court of Appeal 2/2/10, Case No: A2/2008/2457.

10. A Handbook for Employers & Business, Special Action Programme to Combat ForcedLabour, International Labour Organization 2008.

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