05 January 2006 | Anusha Bradley

Proposed exemptions to a new law requiring "gangmasters" to be licensed will cause problems for buyers who source temporary labour, a pressure group has warned.

The Ethical Trading Initiative (ETI), whose members include Tesco and Morrisons, successfully lobbied for the Gangmasters Licensing Act, which comes into force in April. It requires all gangmasters - temporary labour providers supplying agricultural, horticultural, shellfish-gathering, processing or packaging staff - to be licensed.

But SM understands government departments disagree over who should be covered by the law.

The Department for Environment, Food and Rural Affairs (Defra) proposed a number of exclusions in the food processing and packaging industry and completed a consultation into the issue last month.

However, the ETI said the Department of Trade and Industry believes all gangmasters should require licences. The DTI would not comment until a decision has been made.

Power to make the choice rests with Defra ministers, who are expected to announce the decision in early February.

Dan Rees, ETI director and chairman of its temporary labour working group, said the exemptions "make a mockery of the act", and create loopholes for unscrupulous gangmasters in a sector that is renown for exploiting workers.

He said if the Defra proposals stick, it would mean a supplier needs a licence for workers washing salad leaves, but not for workers adding other vegetables to make a packed salad - even though it was often done by the same person, or by people within the same factory.

Rees said the law needed to be "simple and clear" to prevent firms unwittingly employing unlicensed and exploited workers in their supply chains.

The law means that unlicensed gangmasters, and firms found hiring them, could face fines or jail terms, depending on the severity of the offence.

Rees said: "The implication for buyers who want to make use of temporary labour is that there will be no foolproof, simple or cheap way to certify that your labour provider is working in accordance with the law."

Since last March the ETI has audited 160 gangmasters on a voluntary basis in preparation for the new regulations.

"We found 900 incidences of non-compliance, 13 cases of forced labour, 50 cases of really excessive working hours and 30 breaches of regulations governing the employment of children. And that is out of the best providers."

Mark Boleat, chairman of the Association of Labour Providers, agreed that the licence should apply to all providers.

But a Defra spokeswoman said it was necessary to have some exemptions: "Otherwise a farmer lending a couple of farmhands to a neighbour for a day becomes a gangmaster and would need a licence," she said.

SMjan2006