Employment Bill [HL]

I am grateful to the noble Baroness, Lady Gardner, for so eloquently reading out the remarks of the noble Lord, Lord James of Blackheath. It took me back a while when he listed the three successful outplacement exercises in which he was intimately involved. In the first—the closure of the British Shoe Corporation, which was owned by Sears—I was a lawyer on the other side. That was many years ago but my mind went back to that time. The noble Lord, Lord James, has submitted a list of a number of outplacement agencies where the Employment Agency Standards Inspectorate is involved. Will the noble Baroness assure him that those agencies are being investigated? We will keep him informed of how that goes on. I assure the noble Baronesses, Lady Wilcox and Lady Gardner, that any agency that takes fees for work-finding services from jobseekers commits a criminal offence. Training or advice on CVs, for instance, can be provided for a fee as long as they are not related to the work-finding service. The work-seeking services cannot be made conditional on the individual paying the fee; they have to be additional and transparent. Perhaps the noble Baroness would like to give me details of the talent agencies to which she referred. They merit investigation, and I shall do my best to ensure that it takes place. The Government support the intention behind the amendments. It is essential that there are penalties strong enough to ensure that an effective deterrent is in place for those agencies which charge illegal fees for finding work. It is equally important that, where agencies are permitted to charge for other services, the charges are transparent to users, and that the agency workers who use those services should have clear information about the terms on which they can withdraw from such services and exactly that for which they are charged. The amendment would increase the penalty for the offence of seeking or receiving fees for work-finding to a minimum fine of £10,000 for each and every separate offence. It would also require contracts with agencies to provide particular services such as interview or curriculum vitae training to specify what is provided and the level of fee for terminations. We need to understand that two distinct things are being covered by one suggested amendment. We acknowledge the keen interest that the noble Lord, Lord James, has taken in the operations of outplacement agencies in particular, but do not consider that the amendment is the best way to address those issues. That does not mean that we do not support the case for the latter part of the amendment; that is, the transparency and understanding of what is charged for and the terms on which people can withdraw. The Government share the view implicit in the amendment that the current maximum penalty of £5,000 is in some cases inadequate, especially where the agency in question is highly profitable. That is why Clause 14 makes provision for certain offences against the Employment Agencies Act 1973 to be triable either on indictment in the Crown Court or summarily by the magistrates’ court, as at present. These offences include that of seeking or receiving fees for work-finding services. They do not apply in the entertainment and modelling sectors, where agencies are allowed to charge in certain circumstances. That is the crux of the matter surrounding talent agencies, to which the noble Baroness referred. We will have to look at that again. Sometimes, agency fees there are important; sometimes, they will flout the law. The maximum penalty for cases tried in the Crown Court is an unlimited fine. It goes past the £5,000 maximum. A minimum of £10,000 would be irrelevant if it reached the Crown Court. It should be at the discretion of the court to determine the level of the fine; it should not be set in statute, with a base minimum. That is where we have problems with the amendment. The Government consider that the most appropriate way of addressing serious offences of this nature is to ensure that they are tried in the Crown Court, where the penalties available are commensurate with the seriousness or frequency of the offence. There would then be no need for stating a fine in legislation. That is surely preferable to fettering the discretion of the magistrates’ court. Once the Bill has become law, the most serious offences under the Employment Agencies Act will be tried on indictment in the Crown Court. It therefore follows that those offences tried in the magistrates’ court, while still serious, are not as extreme in terms of level of non-compliance or abuse of agency workers. To set a minimum fine of £10,000 for any offence, as the amendment proposes, would be a most unusual step under English law. I am sure that the noble Lord, Lord James, has never come across that in his former life; nor have I in mine. Most employment agencies are small businesses with only a handful of staff, and there are significant numbers of one-person businesses. There is a risk that imposing by statute a minimum fine of £10,000 for each offence would drive many of those agencies straight out of business, even if they were guilty of one offence on one occasion. That is surely not the intention behind the amendment. The Government’s intention is not to put employment agencies out of business but, rather, to take steps to ensure that they are compliant with the law and create more employment. That has to be the underlying need for their existence. The Government therefore believe that it is more effective to ensure that the courts can decide on the most appropriate penalty on a case-by-case basis, taking into consideration the size of the agency, the frequency of offending and the scale of the misdemeanour. It is worth making the point that the minimum penalty under the amendment is precisely double the maximum penalty that magistrates’ courts in England and Wales can currently impose. The amendment also proposes that any fee charged to a jobseeker by a person carrying on an employment agency, for the services specified in the amendment, should be subject to a contract specifying the services to be provided and the continuation fees or termination conditions. We do not believe that such a provision is necessary, as existing regulation already covers the charging of fees and sets out what they are for. The amendment proposes that, where a jobseeker is to be charged fees, the agency and the jobseeker should agree a contract specifying any charge for access to a vacancy database, personal grooming, mock interviews, advice, preparation or circulation of a CV. But some of these services—specifically access to a vacancy database and the circulation of a CV—would almost certainly be work-finding services and charging for them is already a criminal offence. I do not think that we need the amendment merely to effect duplication. The other services listed in the amendment are also subject to regulation that currently endures to ensure that fees and conditions for charging those fees are transparent. Regulation 13 of the conduct regulations already requires that on the first occasion that an employment agency offers to, "““arrange the provision of a service to a work-seeker””," the agency or employment business must give notice in writing to the work-seeker, including a description of the service, the amount of the fee and the circumstances of any refund. Therefore, that provision already exists. In addition, Regulation 3 of the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2007 provides that the work-seeker should be able to withdraw from the services provided by the agency at any time without incurring any detriment or penalty, subject to the notice periods specified in the regulations. Regulation 5 already makes it an offence for an agency to make the provision of work-finding services conditional on the worker using other services provided by the agency, so it is not allowed to do that either. Both those provisions cover all other services provided by agencies, rather than, if I may respectfully say so, the somewhat narrow list covered by the amendment in the name of the noble Lord, Lord James. Although the proposal in the amendment that contracts for services for which fees are charged should specify the duration of the contract is not specifically covered in existing employment agency legislation, I do not believe that such a provision is necessary. As I have already mentioned, existing employment agency legislation already provides that the work-seeker must be able to withdraw from the services for which the legislation does not prohibit the charging of a fee without detriment as long as the work-seeker provides five days’ notice. I thank the noble Baroness for raising this issue. I am also grateful to the noble Lord, Lord James, for setting it out so eloquently. The spirit behind the second part of the amendment is something with which the Government concur, although that is not the case with regard to the first part and the minimum fine. However, I hope that the noble Baroness will be prepared to withdraw the amendment in the light of this response, because we submit that virtually everything that has been covered by it is already covered by current legislation.