Tackling Worker Exploitation by ‘Gangmasters’ in the UK and Australia - Part 1: An Overview of Labour Hire Licensing Laws in the UK and Australia – By Katharine Booth

Editor’s note: Katharine Booth holds a LLM, Advanced Programme in European and International Human Rights Law from Leiden University, Netherlands and a LLB and BA from the University of New South Wales, Australia. She is currently working at the Asser Institute in The Hague. She previously worked as a lawyer and for a Supreme Court Justice in Australia.


This series of blog posts focuses on the regulation of so-called ‘gangmasters’ in the UK and Australia. A ‘gangmaster’ is an old English term for a person (an individual or business) who organises or supplies a worker to do work for another person.[1] Gangmasters have been described as ‘middlemen’ or ‘brokers’ between a worker and a business that needs temporary, and often seasonal, labour. In other countries, including Australia, gangmasters are commonly referred to as labour hire providers or labour market intermediaries.

In recent years, legislation has been implemented in the UK and three Australian States (Queensland, Victoria and South Australia) requiring gangmasters to be licensed. According to Judy Fudge and Kendra Strauss, central to these licensing schemes is the protection of vulnerable workers from forced and unfree labour and exploitation:

“[E]vidence suggests that ‘sweating’ at the bottom end of the labour market (increasingly populated by migrant workers, both documented and undocumented, in many countries) often involves labour intermediaries who exploit the ways in which processes of racialization and the construction of new categories of social difference, instigated by immigration regimes, render some workers extremely vulnerable—including to forced and unfree labour.”

As noted by Kendra Strauss, migrant workers are especially vulnerable to exploitation as they often migrate from less developed economies, have a precarious migrant status, and are employed in poorly-paid positions. They often lack English language skills and have little knowledge of their legal entitlements and pathways for accessing remedies which, according to an Oxfam GB report, makes it unlikely that they will report abuse or exploitation, for fear of losing their jobs. Moreover, as Sayomi Ariyawansa explains, the three-tiered or tripartite arrangement between the worker, gangmaster and host business means that there is no direct contractual relationship between the worker and host business and little oversight of the legal arrangements between the worker and gangmaster. This makes it easy for unscrupulous gangmasters to slip through legal cracks, but also for businesses to unknowingly enter into arrangements with gangmasters that do not comply with the law.

This series of blog posts explores the connection between the regulation of gangmasters and the enactment of modern slavery legislation, namely legislation calling on companies to report on modern slavery and other labour and human rights abuses in their corporate supply chains. It is divided into four main parts. Part 1 of this series explores two main issues. (1) The circumstances that led to the enactment of gangmaster licensing schemes in the UK and Australia, and the laws’ provisions relating to the licensing of workers. (2) The limitations of these laws, particularly the inability of licensing schemes to hold liable companies that enter into business arrangements with gangmasters, as well as companies higher in the supply chain. Part 2 explores reform of these laws in the UK and Australia in view of the relatively recent modern slavery legislation implemented in both countries.


Flashpoints Lead to Legislative Change

The enactment of both the UK and Australian gangmasters legislation followed flashpoints of heightened public awareness of extreme exploitation of migrant labour. In the UK, 23 undocumented Chinese migrants working as cockle pickers were drowned by a rising tide in Morecombe Bay, Lancashire, in February 2004. The victims had been smuggled by Chinese gangmasters into the UK, where they had been housed in overcrowded and inadequate accommodation and paid a pittance for working often long hours in dangerous conditions. The impact of the Morecambe Bay cockling disaster, as it came to be known, was profound, with calls for more to be done to tackle gangmasters operating in the UK who were putting the health and safety of often vulnerable migrant workers at risk.

Five months after the Morecambe Bay cockling disaster, the Gangmasters (Licensing) Act was enacted and, in April 2015, the Gangmasters Licensing Authority (GLA) was established. The Act empowered the GLA to regulate the licensing of gangmasters involved in the supply or use of workers in connection with the agriculture, horticulture, food processing, shellfish gathering and forestry sectors. To hold a licence, gangmasters are required to comply with the Gangmasters (Licensing Conditions) Rules 2009. Gangmasters must, for example, enter into written employment agreements with workers and take reasonable, practicable steps to ensure that workers are aware of their legal rights and obligations, and they must not withhold or threaten to withhold payments to workers. The GLA, therefore, aimed to regulate the exploitative activities of gangmasters in specific industries through the introduction of a national licensing scheme.

Investigations handled by the GLA led to the revocation of licenses and, in extreme cases of exploitation, civil claims against gangmasters. In a recent High Court judgment on the Gangmasters (Licensing) Act, the claimants, Lithuanian nationals employed to catch farm chickens, successfully alleged that they were employed in an exploitative manner. A GLA investigation revealed that the parties had never signed an employment contract and the claimants had no knowledge of their legal rights and entitlements. They worked for extremely long periods with insufficient breaks, were paid considerably less than the statutory minimum, and not paid amounts owed to them, including holiday and overtime pay. Further, their pay was subject to unlawful deductions for so-called employment fees, as well as charges for inadequate accommodation in excess of the statutory maximum. The claimants were threatened and intimidated by a Lithuanian middleman if they complained about the conditions of their employment. In this case, the High Court granted summary judgment in favour of the claimants on all grounds.

The passage of the Australian gangmaster licensing legislation followed media reports in May 2015 that revealed rampant exploitation of migrant labour in Australian-grown fresh produce stocked by major supermarket chains. Subsequently, three Australian States (Queensland, Victoria and South Australia) enacted legislation to regulate the licensing of labour hire service providers.  For a detailed analysis of the Australians laws, see Anthony Forsyth’s article ‘Regulating Australia’s ‘gangmasters’ through labour hire licensing’. The Queensland Government, for instance, introduced the Labour Hire Licensing Act 2017 following a parliamentary inquiry into the practices of the industry. The final report of that inquiry contained evidence of serious mistreatment and exploitation of workers in Queensland, particularly in the low-paid horticulture, meat processing and cleaning industries, committed especially against migrant workers. Similarly, in September 2015, an inquiry conducted by the Victorian Government reported that many temporary migrant and student visa holders, often young backpackers from Asian countries, were being subjected to exploitation in the labour market, particularly in the horticulture and food services sectors. For more information about labour hire in the Australian horticultural industry, read Sayomi Ariyawansa’s article. The impetus for the passage of the UK and Australian laws was, therefore, closely connected to the protection of migrant workers from exploitation and other labour and human rights violations.

The provisions of all of the Australian laws are broadly similar to the Gangmasters (Licensing) Act. All provide for a State-wide licensing scheme for labour hire providers. One key difference, however, between the Australian laws and the UK Act (as originally enacted) is that the scope of the former is unlimited. That is, in Queensland, Victoria and South Australia, all labour hire providers must be licensed, regardless of the industry in which they operate.


Limitations of the Licensing Laws  

The enactment of the UK and Australian laws has not been without criticism. In the UK, the remit of the GLA was restricted to the five sectors specified in the Gangmasters (Licensing) Act. Temporary workers engaged in other sectors, including the construction, hospitality and social care sectors that engage large numbers of migrant workers in the UK, were excluded from the GLA’s operations. Unlike the Gangmasters (Licensing) Act, the Australian laws do not limit the scope of their application and therefore apply to all sectors. However, the effectiveness of the Australian laws is limited in that they are enacted by State Governments rather than the Federal Government. This means that there is no uniform, Australia-wide labour hire licensing scheme to address worker exploitation, but rather a patchwork of State-based legislation.

Moreover, both the UK Act (as originally enacted) and the Australian laws provide only for the establishment of a labour hire licensing scheme and compliance with that scheme. The reach of the licensing authorities is generally restricted to the passive regulation of licences and contraventions of the relevant rules that are connected to alleged offences by gangmasters.

Further, the scope of liability under the laws is limited, as both the UK and Australian laws regulate only relationships between workers, gangmasters and labour users. This means that companies further up the supply chain, such as major retailers, cannot be held liable for, for example, entering into a contractual relationship with a labour user that engaged an unlicensed gangmaster. By way of example, the recent UK case concerning exploited Lithuanian chicken-catchers resulted in claims against the individual gangmasters only – not the businesses that engaged those gangmasters and sold the eggs hand-picked by the workers to consumers. This is because the UK and Australian laws only regulate the tripartite arrangement between the worker, gangmaster and host business – and the latter is unlikely to be the major corporation or retailer that sells the final product to the consumer. They do not oblige the retailer, for example, to conduct human rights due diligence (HRDD) to ensure that workers are being treated according to the law. In relation to the Australian horticultural industry, Sayomi Ariyawansa has suggested that workers’ entitlements could be best assured by licensing legislation requiring retailers to conduct ‘targeted transparency’ or a form of HRDD:

“Retailers should be required to prepare and publicly disclose a statement which addresses its due diligence processes in relation to ensuring its suppliers comply with the licensing scheme. Further, where a retailer has failed to take all reasonable steps to ensure compliance, the authority responsible for the enforcement of the GLA model may issue a guidance to the retailer, and may publish this guidance in a way it considers appropriate.”

Such due diligence would reflect the growing recognition of human rights abuses in corporate supply chains.

This blog post has explored the context in which the UK and Australian labour hire licensing laws were enacted, as well as some limitations of these laws. Part 2 delves into the subsequent reform of the UK law and the effect of the enactment of modern slavery laws in both the UK and Australia.

[1] See Anthony Forsyth, ‘Regulating Australia’s ‘gangmasters’ through labour hire licensing’ (2019) 47 Federal Law Review 3, 469-493; Nicola Verdon, ‘The employment of women and children in agriculture: A reassessment of agricultural gangs in nineteenth-century Norfolk’ (2001) 49(1) The Agricultural History Review 1, 41-55. For an overview of the history of gangmasters in the UK and at the international level: Kendra Strauss, ‘Unfree labour and the regulation of temporary agency work in the UK’, in Judy Fudge and Kendra Strauss (eds), Temporary work, agencies and unfree labour (2013, Routledge) 164-183. 

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