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Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2007

My Lords, I agree with the words of the noble Baroness, Lady Wilcox, and of the noble Lord, Lord Razzall, but I disagree with their thinking that the regulations are wrong only in respect of regulation 7. The instrument is deficient in what it does not say, rather than in what it does say. I raised my points at the Merits Committee last week. The Merits Committee would probably have asked for the instrument to be returned to the department for further consideration had it not been for the imminence of the Recess and the desire not to interfere with process. There are three major concerns for me in the instrument. One is an important point that is not there and appears to be in total conflict with the law as it stands—on the admission of the department. The other two points are serious moral hazard issues relating to young people. The issue that is not there, which is strangely and apparently in conflict with the law, is that regulations do nothing to address the one area in which fees are charged by agencies directly to jobseekers. They have been charged on that basis for a great many years. The issue is that of out-placement agencies, where the recently redundant or people without jobs at the management and executive levels go to agencies that purport to obtain for them introductions to employers who will provide employment opportunity. The agency in that case generally takes a fee both from the employer who takes them on, if successful, and from the jobseeker, on a regular basis. Some of those fees are enormous. I have heard of job fees from out-placement operations exceeding £2,000 per month, rapidly exceeding the amount of redundancy upon which the redundant executive depended for the survival of himself and his family during the time that it will take him to get a job. That is a tragic situation. There appears to be no regulation and I seriously hope that with the Employment Bill, forthcoming after the Recess, we will see some attempt to bring those agencies under some regulatory control. That is very important. There is an issue where the principle of out-placement can work brilliantly—if it is worked as an integral part of a redundancy package, paid for by the employer that has declared the redundancy. In that case, there needs to be clarification about the taxable status of the fee paid on behalf of the executive—as to whether it is a benefit to be taxed or not. That is not clear, in practice, in standardisation. There is another case, where an employer has a large number of redundancies to declare—I myself have had cases of 2,000 and of 500 people at a time—and you mount your own out-placement operation inside. Some of the agencies are extremely good at coming into a firm and setting up an out-placement operation on your behalf. We did it at the Dome with wonderful effect. We had 2,000 young people, all being declared redundant on 31 December of the year of the Dome, and none of them had jobs to go to. We brought in a brilliant young woman, who set up an out-placement operation for us, for a very small fee. We got 1,620 job offers for the 2,000 people by the time that they left the Dome. That is an example that should be encouraged. We do not want the Government to write off the whole of the out-placement industry, but, please, to put some regulations in place that allow the benefits to continue and that rule completely out of order the scoundrels who are bankrupting the redundant unfortunates. I am told that it is already illegal under the Employment Act 1978 to run an out-placement operation on that basis, so why are they not being prosecuted accordingly? There is a real mystery there. My two questions of moral concern relate to the provision, which is recognised in the instrument, whereby an agency can take a fee for doing a block booking of a large number of agency staff to go and work, perhaps, at a sporting event—usually catering or waitress and serving staff for the hospitality and restaurants. Until recently, I have been responsible for running both the Grand National and the Cheltenham race course meetings, so I am intimately familiar with this process. In both those places, you would have hundreds of young women being bussed in from all over the country to provide the waiting staff, usually drawn from the catering colleges where they recruit whole classes. They are provided with accommodation at the locations to which they are taken. My concern with the instrument is that it now appears, according to the Explanatory Memorandum, not to allow you to terminate your short-term employment in less than five days. A lot of people, who are very inexperienced, at the ages of 15 or 16 have to have their parents’ consent to go, but I very much doubt whether the parents know what they are letting them go to. These affairs are not attractive places for young people. The accommodation is very primitive and, while there are hundreds of young women together in such places, there are also hundreds of young men—staff handling the horses or all the others handling a race meeting. There is easy access to alcohol and, I fear, easy access to drugs as well. The risk to those young people of being exposed to predatory and rather intoxicated young men is really unattractive indeed. A number of the girls want to come home the next day. The instrument makes it far worse to get out, because you are stuck. You cannot get the transport out until the bus goes returns at the end of the week. They do not get paid for the day, so they have no pay to use to get a bus or train home anyway. There needs to be some better welfare condition built in. One of the suggestions was that there ought to be some sort of mother hen appointed to every dormitory, to look after it—that would be a good move. I suggested that to a noble Baroness on our side of the House and she said that in her young days such a person used to be known as the bunny mother, which raises some interesting possibilities. There is a welfare issue of serious concern. I have known of some young women who have gone on these affairs and been stuck there for the whole week because they could not get out and was seriously distressed by the experience. This instrument makes it more dangerous. My other concern relates to the famous regulation 7, which both noble Lords who have spoken so far have mentioned. They missed one of the more important and pernicious points of it, which comes in Note 24 of the Explanatory Memorandum: "““Entertainment or modelling agencies can only charge work-seekers a fee out of earnings the agency has found for them””." It is not unusual for model agencies to be asked to provide a block booking of 20 or more models for a party, which is part of the selection or casting process for a promotion or launch. In so doing, the agency will get a fee for providing 20 or so models to arrive at one time. The models get to go to a free party and they get paid a fee. This now says that a portion of that fee can be taken by the agency. That might seem fair enough, but it really is not because these are very impecunious young people, trying to make their way. If the fee is taken from them in part, it is not particularly nasty or dirty-minded of me to suggest that the likelihood is that they will seek to augment the depleted earnings by negotiating another fee with anybody they can find at the party. It is not the function of government to promote prostitution, and this is a pimp’s charter. It needs seriously reviewing and readdressing because it opens up a very serious moral hazard. I think it is wrong and I ask the department seriously to consider these issues. We do not expect this instrument to be withdrawn on its course to implementation in April, but we ask that when the Employment Bill comes through, the Government give more detailed and less naïve consideration to some of the implications of this instrument.