14 March 2006 | Anusha Bradley

Purchasers face up to a year in jail or a £5,000 fine if they use unlicensed gangmasters to provide workers, under new government proposals for the agriculture and food processing industries.

The Department for Environment, Food and Rural Affairs (Defra) yesterday announced temporary labour suppliers in these sectors, or so-called 'gangmasters', must be licensed or they too may face a penalty.

The new regulations will be effective from October.

As reported in SM (News, 5 January 2006), The regulations clarify earlier proposals which did not take into account the reality of temporary labour in these sectors.

Speaking at a press conference yesterday, Defra minister Jim Knight, said: "This makes it very clear what is legal and what is illegal."

The Ethical Trading Initiative (ETI), which in partnership with major supermarkets including as Tesco, Asda and Waitrose lobbied for an across-the-board licensing scheme, welcomed the news.

Supermarkets were concerned if the licensing scheme was overly complicated they could be held accountable for not protecting workers. The ETI said the government's decision would protect up to 600,000 workers in the agriculture and food processing and packaging industries from exploitation.

Dan Rees, ETI director said in a statement: "This is exactly what the food industry wanted - a level playing field."

From 1 October, it will become an offence to operate as a gangmaster without a licence. Offenders face up to 10 years in jail or a £5,000 fine. From 1 December, it will become an offence to use an unlicensed gangmaster to provide temporary labour. Offenders face up to a year in jail or a £5,000 fine. This includes buyers who use a gangmaster and do not check they are licensed. Gangmasters can apply to the Gangmasters Licensing Authority from 6 April for licences online, over the telephone or by post. Licences cost from £250 to £4,000 depending on the size of the business.

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