Committee (1st Day) (Continued)
43: After Clause 7, insert the following new Clause—
“Labour market enforcement undertakingsPower to request LME undertaking
(1) This section applies where an enforcing authority believes that a person has committed, or is committing, a trigger offence.
(2) An enforcing authority may give a notice to the person—
(a) identifying the trigger offence which the authority believes has been or is being committed;(b) giving the authority’s reasons for the belief;(c) inviting the person to give the authority a labour market enforcement undertaking in the form attached to the notice.(3) A labour market enforcement undertaking (an “LME undertaking”) is an undertaking by the person giving it (the “subject”) to comply with any prohibitions, restrictions and requirements set out in the undertaking, as to which see section (Measures in LME undertakings).
(4) “Trigger offence” means—
(a) an offence under the Employment Agencies Act 1973 other than one under section 9(4)(b) of that Act;(b) an offence under the National Minimum Wage Act 1998;(c) an offence under the Gangmasters (Licensing) Act 2004;(d) any other offence prescribed by regulations made by the Secretary of State;(e) an offence of attempting or conspiring to commit an offence mentioned in paragraphs (a) to (d);(f) an offence under Part 2 of the Serious Crime Act 2007 in relation to an offence so mentioned;(g) an offence of inciting a person to commit an offence so mentioned;(h) an offence of aiding, abetting, counselling or procuring the commission of an offence so mentioned.(5) “Enforcing authority”—
(a) in relation to a trigger offence under the Employment Agencies Act 1973, means the Secretary of State or any authority whose officers are acting for the purposes of that Act (see section 8A of that Act);(b) in relation to a trigger offence under the National Minimum Wage Act 1998, means the Secretary of State or any authority whose officers are acting for the purposes of that Act (see section 13 of that Act); (c) in relation to a trigger offence under the Gangmasters (Licensing) Act 2004, means the Secretary of State or any authority whose officers are acting as enforcement officers for the purposes of that Act (see section 15 of that Act);(d) in relation to an offence which is a trigger offence by virtue of subsection (4)(d) (including an offence mentioned in subsection (4)(e) to (h) in connection with such an offence), has the meaning prescribed in regulations made by the Secretary of State.(6) In subsection (5), a reference to an offence under an Act includes a reference to an offence mentioned in subsection (4)(e) to (h) in connection with such an offence.
(7) In this section references to the Gangmasters (Licensing) Act 2004 are references to that Act only so far as it applies in relation to England and Wales and Scotland.”
My Lords, these government amendments introduce new clauses to create a new regime of labour market enforcement—LME—undertakings and orders, backed up with a criminal offence for non-compliance. As such, they are an important part of the Government’s response to the consultation Tackling Exploitation in the Labour Market, where respondents agreed that there was a need to tackle exploitation falling between routine breaches of labour market legislation and very serious offences, which are dealt with by the police or the National Crime Agency. This means that, for the first time, individuals within rogue businesses face the possibility of imprisonment for repeated or serious breaches of labour market legislation, many of which are currently punishable only by a fine. However, as I am about to describe, a business will have several opportunities to put matters right before facing prosecution.
Taking national minimum wage offences as an example, an initial offence would be dealt with using the existing civil penalty regime. Money owed to the worker would also be recovered and the new regime will not affect this. However, if a business decided to take the hit and continue underpaying its workers then a labour market enforcement undertaking could be sought, requiring the business to take reasonable steps to ensure compliance in future. This could be an update to its software, for example, a measure which a law-abiding business would have implemented on its own initiative. If the business refused to give or failed to comply with an undertaking, the enforcer could apply to the court for a labour market enforcement order. This would contain similar corrective measures, as ordered by the court. A court could also make such an order when sentencing for a labour market offence. Only where the business failed to comply with the order would prosecution be a consequence.
The new clause inserted by Amendment 43 allows one of the enforcement bodies to request that a subject enters into an LME undertaking where it believes that a trigger offence has been or is being committed. “Trigger offence” is defined as meaning,
“an offence under the Employment Agencies Act 1973 other than one under section 9(4)(b) of that Act … an offence under the National Minimum Wage Act 1998”,
“an offence under the Gangmasters (Licensing) Act 2004”,
including secondary and related offences.
The new clauses inserted by Amendments 44 and 45 set out what measures may be included in an LME undertaking and their duration. These must secure compliance with labour market legislation, publicise the undertaking and subsequent remedial action or be a measure of a kind prescribed in regulations by the Secretary of State. We envisage this power being used to prescribe measures to protect workers such as taking steps to inform them of their rights or preventing the unlawful retention of documents. All the measures must be just and reasonable, and at least one measure must be necessary to prevent or reduce further offending. The undertaking must make clear how any such measures will secure compliance. An undertaking takes effect when accepted by the enforcing authority unless alternative arrangements are made within it, and can last for a maximum of two years. The enforcing authority may release the subject from an undertaking, and must do so if none of the measures within it is necessary to reduce or prevent further offending. The new clause inserted by Amendment 46 governs the service of a notice to request an undertaking, including where the suspected offender is a body corporate or a partnership.
The new clauses inserted by Amendments 47, 48 and 50 set out the arrangements by which the enforcing authority can apply to the court for an LME order and the measures it may contain. An application may be made where the proposed respondent has refused or failed to enter into an undertaking within a negotiation period of 14 days, or longer by agreement. An application may also be made where the proposed respondent has failed to comply with the undertaking. The court must be satisfied, on the balance of probabilities, that the trigger offence has been or is being committed. The court must also be satisfied that the order is just and reasonable. The measures that the order can contain are the same as the undertaking. The appropriate court is the magistrates’ court, sheriff court or court of summary jurisdiction, according to where the conduct constituting the offence took place.
The new clause inserted by Amendment 49 makes provision for a sentencing court to make an LME order following conviction for a trigger offence. The new clause inserted by Amendment 51 states that an order may not be made in respect of a child and that its maximum duration is two years. When making an order, the court may release the respondent from any previous order or from any undertaking made in respect of the same trigger offence. The new clauses inserted by Amendments 52 and 53 make provision for orders to be varied, discharged and appealed.
The new clause inserted by Amendment 54 puts a duty on the Secretary of State to issue a code of practice on the exercise of the new enforcement regime. This will make it clear to enforcing authorities how the regime should be applied alongside their existing sanctions. The code of practice will be laid before Parliament and published, and the enforcing authorities must have regard to the current version.
The new clause inserted by Amendment 55 provides that the powers conferred on officers to investigate trigger offences may also be used when investigating breaches of an LME order. In the case of the Gangmasters and Labour Abuse Authority, these powers will be extended by Amendments 17 and 40, and it will therefore have the powers to investigate trigger offences under employment agency and national minimum wage legislation.
The new clauses inserted by Amendments 56 to 59 create a criminal offence where a respondent fails to comply with an LME order. The maximum penalty is two years’ imprisonment and/or a fine on conviction on indictment, or 12 months’ imprisonment and/or a fine on summary conviction. Where the offence is committed by bodies corporate, unincorporated associations or partnerships, an offence is also committed by the officers of the company, the members of the unincorporated association or partners respectively, where it is proved that the offence was committed with the consent or connivance of, or attributable to the negligence of, that individual. I beg to move.
My Lords, I have some amendments in this group. The first is an amendment to government Amendment 47, on the power to make an LME order. Under subsection (1) of the new clause, the court must be,
“satisfied, on the balance of probabilities, that the person has committed, or is committing, a trigger offence”.
My amendment would change the balance of probabilities to “beyond reasonable doubt”. A trigger offence relates to offences under other legislation as well as being an offence in itself so I do not understand why the civil standard of proof is thought to be appropriate. If the answer to this is that it is in effect covered by the new clause in Amendment 49, which is different, then is there not a problem in having differing standards of proof? I would be grateful for an explanation here.
Amendment 50A is an amendment to government Amendment 50. It would leave out the provision that one of the purposes of a measure—a “prohibition, restriction or requirement”—included in an LME order is bringing it,
“to the attention of persons likely to be interested in the matter”,
and other points. If this is about communication across the actors in labour market enforcement, should it not be for the director to make sure this happens? Why is it a measure in a court order? It does not seem a matter for the courts. I can see that it may be necessary, for instance, to inform employees about an order but it seems very cumbersome and not appropriate in this context.
My final amendment in the group is an amendment to government Amendment 57, which, dealing with “Offences by bodies corporate”, defines an officer of a body corporate as including a “manager”. My amendment would take that out. I am used to seeing directors, secretaries and so on as officers of a company but a manager—though I admit I will be very out of date on company law provisions—to me means something quite different and not with the same responsibilities as a director of a company.
My Lords, here again we have a series of government amendments in varying degrees of complexity. I want further information on some of these amendments in relation to other requirements and punishments relating to people who commit the offence under various Acts as listed in government Amendment 43 and other amendments in the group. Is the noble Lord saying that in all cases of alleged offences, first they will be dealt with under the Acts he referred to in his contribution and only later on will an LME be sought? Will he clarify that when he responds and also how it is all going to work?
A trigger offence is committed and action is taken, as the noble Lord outlined in his amendments. Then requirements are sought from individuals and that can be a prohibition, a restriction or a requirement for further action that will reduce the risk of the person not complying up to a maximum duration of two years. He said that this could be reduced on application by the enforcing authority. My concern is that the Government do not always have a particularly good record in ensuring that all these present requirements are enforced to the full extent. If you look at the enforcement activity for breaches of the national minimum wage, I would suggest it was not a record to be particularly proud of. Will these additional burdens make enforcement easier and more effective or not? It would be useful if the noble Lord could respond to that point as well.
My noble friend Lord Rosser made reference in a previous debate to the question of how, with increased work and cuts in resources, we can ensure that these increased powers will be properly resourced. The worry is that there will be so much stuff here that we will actually end up with poor enforcement, not better enforcement.
I also noticed that, with new subsections (6), (7) and (8) proposed in government Amendment 46, we are moving into the 21st century: with some caveats a labour market enforcement notice can be sent to individuals by electronic means. That is certainly progress. Will the noble Lord, Lord Ashton of Hyde, bring that matter to the attention of his friends in BIS? I am thinking of the noble Baroness, Lady Neville-Rolfe. We have some contradiction between how people who have allegedly committed offences are treated and how law-abiding citizens are treated in the Trade Union Bill—it is going through this House on virtually the same timescale—under which they are not allowed to receive their ballot paper by electronic means. There could be some interesting amendments in the next few weeks. We have the Government supporting the use of electronic means here, but at the same time denying their use for people trying to get their ballot paper. That is a contradiction. I will leave it there and look forward to the Minister’s response.
My Lords, what I have to say follows from what the noble Lord, Lord Kennedy, has just said. Amendment 43 refers to offences under four existing Acts together with inciting, aiding, abetting or counselling such offences. These can trigger undertakings. Amendment 44 refers to notices, orders and enforcement. All this is bound to cost money. Resources have been repeatedly mentioned today, so I must ask: how much of this additional expenditure will be new money and how much will be transferred from the enforcement mechanisms of the existing legislation? It would be a great waste of our time and effort to create a series of new offences without having the means to cope with them.
My Lords, I thank noble Lords for their remarks. Before I move to the amendments spoken to by the noble Baroness, Lady Hamwee, I shall comment on the points raised on the government amendments.
I was asked when the new system, which the noble Lord, Lord Kennedy, described as burdensome, will be used. This is a new power to be used after the existing penalties have been applied under the existing Acts. For example, in national minimum wage regulations, the current penalty is naming and shaming. In other areas, there are civil penalties. These amendments are designed for egregious offences and repeated offences where, for example, some companies may decide to take the fine and continue to pay their workers less than the minimum wage. We have included these new powers to put an end to breaches of labour market rules. We think they are an important part of the new toolkit to address these serious matters.
Resources have been mentioned on several occasions this evening. I take the point that if these new powers are not properly enforced, there will be no point in having them. My noble friend has already committed to talk about resources and to write to noble Lords on that subject, and I will ask him to include this in his letter.
The noble Lord, Lord Kennedy, raised the subject of electronics. He cleverly included matters which are nothing to do with this Bill. Of course, electricity is dangerous when it is incorrectly applied. The electronic means in this Bill bring it into the 21st century, but that does not mean that they should be used in all cases.
The noble Lord, Lord Hylton, talked about the four current Acts which can trigger the possibility of going into enforcement, and—again—he mentioned money. I agree it is bound to cost some money. As I said before, my noble friend will include that in his reply, if I could leave it like that for the time being.
Of course, the Director of Labour Market Enforcement will set out in his strategy how the funding that is available for the enforcement agencies should be allocated. Every year he makes an annual report. It would be very surprising, if he were underresourced, that he would not refer to that in his annual report.
As I have said to the noble Lord, Lord Kennedy, routine cases will continue to be dealt with using existing powers. There will be LME undertakings, and then orders will be for the more serious cases.
I move on to the amendments in the name of the noble Baroness, Lady Hamwee, to which I listened carefully. Amendment 47A would change the court’s power to make an LME order on application from an enforcement agency, so that the court would have to be satisfied beyond reasonable doubt that the person had committed or was committing a trigger offence.
We think it appropriate that a court should be able to make an LME order on application from an enforcement agency on the basis of the balance of probabilities rather than the criminal standard of proof. In these circumstances, the order is designed to prevent further offending, not as a means of sentencing the person on conviction for an offence. The amendment would limit the ability of enforcement agencies to invoke the LME order regime to secure compliance as an alternative to straightforwardly prosecuting the person for a trigger offence.
Amendment 50A would remove the court’s power to include a prohibition, restriction or requirement in an LME order on bringing the order, the circumstances in which it was made and any action by the respondent to comply, to the attention of persons likely to be interested in the matter. However, we think it right that the courts, in making an LME order, should be able to require a business to make the matter known to interested parties, and failure to do so would result in a breach of the order with the possibility of prosecution for the consequent offence. It is properly for the courts, not the Director of Labour Market Enforcement, to impose this requirement. The amendment would significantly weaken this provision, possibly enabling those subject to an LME order to conceal it from its employees, creditors and trading partners.
Amendment 57A would remove from the provisions relating to offences by bodies corporate the possibility of a manager committing the offence of failing to comply with an LME order where they have consented or connived in the offence or it was attributable to their neglect. However, it is appropriate that managers, in addition to their companies, should be held liable for the offence of failing to comply with an LME order where the offence resulted from their neglect, consent or connivance. Secondary liability provisions of this kind, including liability for managers, are commonplace in other legislation. The principle that managers can be held liable for offences committed by their company in certain circumstances is well established.
In the light of what I have said, I hope that the noble Baroness will agree not to move her amendments.
The Minister made reference to a point I picked out about electronic communications. It is his party that decided to allow the use of electronic communications in this Bill for contacting people who may have committed some very serious offences. Another Bill, also on the Floor of this House around the same time, is denying law-abiding citizens to get their communications by electronic means. I asked the Minister if he would point out that contradiction to his friends in BIS, particularly the noble Baroness, Lady Neville-Rolfe. I would be grateful if he could confirm that he will do that.
My Lords, I will go back and look at the standard of proof that is required. My concern was that an LME order is a step along the way—a part of a process that seems to require, as an appropriate standard of proof, to be beyond reasonable doubt.
With regard to “an officer” including a manager, my concern is whether the term “manager” is understood in the same way by everyone. We know what a director is—it is defined in legislation, you sign up to it and so on—but there could be doubt as to whether an individual was actually a manager or not, and that is where my anxiety lies. I appreciate that the Minister is not in a position to make any further comment today but perhaps it is something that we can look at. This is not intended as an opposition political point; it is a real concern about how the legislation will work.
Amendment 43 agreed.
Amendments 44 to 46
44: After Clause 7, insert the following new Clause—
“Measures in LME undertakings
(1) An LME undertaking may include a prohibition, restriction or requirement (each a “measure”) if, and only if—
(a) the measure falls within subsection (2) or (3) (or both), and(b) the enforcing authority considers that the measure is just and reasonable.(2) A measure falls within this subsection if it is for the purpose of—
(a) preventing or reducing the risk of the subject not complying with any requirement imposed by or under the relevant enactment, or(b) bringing to the attention of persons likely to be interested in the matter—(i) the existence of the LME undertaking, (ii) the circumstances in which it was given, and (iii) any action taken (or not taken) by the subject in order to comply with the undertaking.(3) A measure falls within this subsection if it is prescribed, or is of a description prescribed, in regulations made by the Secretary of State.
(4) The enforcing authority must not—
(a) invite the subject to give an LME undertaking, or (b) agree to the form of an undertaking,unless the authority believes that at least one measure in the undertaking is necessary for the purpose mentioned in subsection (5).(5) That purpose is preventing or reducing the risk of the subject—
(a) committing a further trigger offence under the relevant enactment, or (b) continuing to commit the trigger offence.(6) An LME undertaking must set out how each measure included for the purpose mentioned in subsection (2)(a) is expected to achieve that purpose.
(7) In this section, the “relevant enactment” means the enactment under which the enforcing authority believes the trigger offence concerned has been or is being committed.”
45: After Clause 7, insert the following new Clause—
(1) An LME undertaking has effect from when it is accepted by the enforcing authority or from the later time specified in it for this purpose.
(2) An LME undertaking has effect for the period specified in it but the maximum period for which an undertaking may have effect is 2 years.
(3) The enforcing authority may release the subject from an LME undertaking.
(4) The enforcing authority must release the subject from an LME undertaking if at any time during the period for which it has effect the authority believes that no measure in it is necessary for the purpose mentioned in section (Measures in LME undertakings)(5).
(5) If the enforcing authority releases the subject from an LME undertaking it must take such steps as it considers appropriate to bring that fact to the attention of—
(a) the subject;(b) any other persons likely to be interested in the matter.”
46: After Clause 7, insert the following new Clause—
“Further provision about giving notice under section (Power to request LME undertaking)
(1) A notice may be given under section (Power to request LME undertaking) to a person by—
(a) delivering it to the person,(b) leaving it at the person’s proper address,(c) sending it by post to the person at that address, or(d) subject to subsection (6), sending it to the person by electronic means.(2) A notice to a body corporate may be given to any officer of that body.
(3) A notice to a partnership may be given to any partner.
(4) A notice to an unincorporated association (other than a partnership) may be given to any member of the governing body of the association.
(5) For the purposes of this section and of section 7 of the Interpretation Act 1978 (service of documents by post) in its application to this section, the proper address of a person is the person’s last known address (whether of the person’s residence or of a place where the person carries on business or is employed) and also—
(a) in the case of a body corporate or an officer of the body, the address of the body’s registered or principal office in the United Kingdom;(b) in the case of a partnership or a partner, the address of the principal office of the partnership in the United Kingdom;(c) in the case of an unincorporated association (other than a partnership) or a member of its governing body, the principal office of the association in the United Kingdom.(6) A notice may be sent to a person by electronic means only if—
(a) the person has indicated that notices under section (Power to request LME undertaking) may be given to the person by being sent to an electronic address and in an electronic form specified for that purpose, and(b) the notice is sent to that address in that form.(7) A notice sent to a person by electronic means is, unless the contrary is proved, to be treated as having been given on the working day immediately following the day on which it was sent.
(8) In this section—
“electronic address” means any number or address used for the purposes of sending or receiving documents or information by electronic means; “officer”, in relation to a body corporate, means a director, manager, secretary or other similar officer of the body;“working day” means a day other than a Saturday, a Sunday, Christmas Day, Good Friday or a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom.”
Amendments 44 to 46 agreed.
47: After Clause 7, insert the following new Clause—
“Labour market enforcement ordersPower to make LME order on application
(1) The appropriate court may, on an application by an enforcing authority under section (Applications), make a labour market enforcement order against a person if the court—
(a) is satisfied, on the balance of probabilities, that the person has committed, or is committing, a trigger offence, and(b) considers that it is just and reasonable to make the order.(2) A labour market enforcement order (an “LME order”) is an order which—
(a) prohibits or restricts the person against whom it is made (“the respondent”) from doing anything set out in the order;(b) requires the respondent to do anything set out in the order.See section ().(3) In this section “the appropriate court”—
(a) where the conduct constituting the trigger offence took or is taking place primarily in England and Wales, means a magistrates’ court;(b) where that conduct took or is taking place primarily in Scotland, means the sheriff;(c) where that conduct took or is taking place primarily in Northern Ireland, means a court of summary jurisdiction.(4) An application for an LME order under this section is—
(a) in England and Wales, to be made by complaint;(b) in Northern Ireland, to be made by complaint under Part 8 of the Magistrates’ Courts (Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I. 26)).”
Amendment 47 agreed.
Amendment 47A not moved.
Amendments 48 and 49
48: After Clause 7, insert the following new Clause—
(1) An enforcing authority may apply for an LME order to be made under section (Power to make LME order on application) against a person (the “proposed respondent”) if—
(a) the authority has served a notice on the proposed respondent under section (Power to request LME undertaking), and(b) the proposed respondent— (i) refuses to give an LME undertaking, or(ii) otherwise fails, before the end of the negotiation period, to give an LME undertaking in the form attached to the notice or in such other form as may be agreed with the enforcing authority. (2) An enforcing authority may also apply for an LME order if the proposed respondent—
(a) has given an LME undertaking to the enforcing authority, and(b) has failed to comply with the undertaking.(3) In subsection (1) “the negotiation period” means—
(a) the period of 14 days beginning with the day after that on which the notice mentioned in paragraph (a) of that subsection was given, or(b) such longer period as may be agreed between the enforcing authority and the proposed respondent.”
49: After Clause 7, insert the following new Clause—
“Power to make LME order on conviction
(1) This section applies where a court deals with a person in respect of a conviction for a trigger offence.
(2) The court may make an LME order against the person if the court considers it is just and reasonable to do so.
(3) An LME order must not be made under this section except—
(a) in addition to a sentence imposed in respect of the offence concerned, or(b) n addition to an order discharging the person conditionally or, in Scotland, discharging the person absolutely.”
Amendments 48 and 49 agreed.
50: After Clause 7, insert the following new Clause—
“Measures in LME orders
(1) An LME order may include a prohibition, restriction or requirement (each a “measure”) if, and only if, the measure falls within subsection (2) or (3) (or both).
(2) A measure falls within this subsection if it is for the purpose of—
(a) preventing or reducing the risk of the respondent not complying with any requirement imposed by or under the relevant enactment, or(b) bringing to the attention of persons likely to be interested in the matter—(i) the existence of the LME order, (ii) the circumstances in which it was made, and (iii) any action taken (or not taken) by the respondent in order to comply with the order.(3) A measure falls within this subsection if it is prescribed, or is of a description prescribed, in regulations made by the Secretary of State.
(4) Where an LME order includes a measure for the purpose mentioned in subsection (2)(a), the order must set out how the measure is expected to achieve that purpose.
(5) In this section the “relevant enactment” means the enactment under which the trigger offence concerned has been or is being committed.”
Amendment 50 agreed.
Amendment 50A not moved.
Amendments 51 to 56
51: After Clause 7, insert the following new clause—
“Further provision about LME orders
(1) An LME order has effect for the period specified in it but the maximum period for which an order may have effect is 2 years.
(2) An LME order may not be made against an individual who is under 18.
(3) If a court makes an LME order, the court may also—
(a) release the respondent from any LME undertaking given in relation to the trigger offence concerned;(b) discharge any other LME order which is in force against the respondent.”
52: After Clause 7, insert the following new Clause—
“Variation and discharge
(1) The appropriate court may by order vary or discharge an LME order—
(a) on the application of the respondent;(b) if the order was made under section (Power to make LME order on application), on the application of the enforcing authority who applied for the order;(c) if the order was made under section (Power to make LME order on conviction), on the application of the enforcing authority whose officer conducted the investigation which resulted in the prosecution of the respondent for the trigger offence.(2) In this section “the appropriate court”—
(a) in relation to an LME order made on an application under section (Power to make LME order on application), means the court that made the order;(b) in relation to an order made in England and Wales under section (Power to make LME order on conviction), means a magistrates’ court;(c) in relation to such an order made in Scotland, means the sheriff;(d) in relation to such an order made in Northern Ireland, means a court of summary jurisdiction.(3) An application for an order under this section is—
(a) if made to a magistrates’ court in England and Wales, to be made by complaint;(b) if made to a court of summary jurisdiction in Northern Ireland, to be made by complaint under Part 8 of the Magistrates’ Courts (Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I. 26)).”
53: After Clause 7, insert the following new Clause—
(1) A respondent may appeal against—
(a) the making of an LME order on an application under section (Power to make LME order on application);(b) the making of, or refusal to make, an order under section (Variation and discharge).(2) An appeal under subsection (1) is to be made—
(a) where the order was made or refused by a magistrates’ court in England and Wales, to the Crown Court;(b) where the order was made or refused by the sheriff, to the Sheriff Appeal Court;(c) where the order was made or refused by a court of summary jurisdiction in Northern Ireland, to a county court.(3) On an appeal under subsection (1) the court hearing the appeal may make such orders as may be necessary to give effect to its determination of the appeal, and may also make such incidental or consequential orders as appear to it to be just and reasonable.
(4) An LME order that has been varied by virtue of subsection (3) remains an order of the court that first made it for the purposes of section (Variation and discharge).
(5) A respondent may appeal against the making of an LME order under section (Power to make LME order on conviction) as if the order were a sentence passed on the respondent for the trigger offence.”
54: After Clause 7, insert the following new Clause—
“LME undertakings and orders: supplementaryCode of practice
(1) The Secretary of State must issue a code of practice giving guidance to enforcing authorities about the exercise of their functions under sections (Power to request LME undertaking) to (Variation and discharge).
(2) The Secretary of State may revise the code from time to time.
(3) The Secretary of State must lay before Parliament, and publish, the code and any revised code.
(4) An enforcing authority must have regard to the current version of the code in exercising its functions under sections (Power to request LME undertaking) to (Variation and discharge).”
55: After Clause 7, insert the following new Clause—
(1) An officer acting for the purposes of the Employment Agencies Act 1973—
(a) may also act for the purposes of taking action where it appears that a person has failed to comply with an LME undertaking or an LME order where the trigger offence to which the undertaking or order relates is an offence under that Act, and(b) in doing so, has the same powers and duties as he or she has when acting for the purposes of that Act.(2) An officer acting for the purposes of the National Minimum Wage Act 1998—
(a) may also act for the purposes of taking action where it appears that a person has failed to comply with an LME undertaking or an LME order where the trigger offence to which the undertaking or order relates is an offence under that Act, and(b) in doing so, has the same powers and duties as he or she has when acting for the purposes of that Act.(3) An officer acting as an enforcement officer for the purposes of the Gangmasters (Licensing) Act 2004—
(a) may also act for the purposes of taking action where it appears that a person has failed to comply with an LME undertaking or an LME order where the trigger offence to which the undertaking or order relates is an offence under that Act, and(b) in doing so, has the same powers and duties as he or she has when acting as an enforcement officer for the purposes of that Act.(4) In this section references to the Gangmasters (Licensing) Act 2004 are references to that Act only so far as it applies in relation to England and Wales and Scotland.”
56: After Clause 7, insert the following new Clause—
(1) A person against whom an LME order is made commits an offence if the person, without reasonable excuse, fails to comply with the order.
(2) A person guilty of an offence under this section is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding 2 years, to a fine or to both;(b) on summary conviction in England and Wales, to imprisonment for a term not exceeding 12 months, to a fine or to both;(c) on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months, to a fine not exceeding the statutory maximum or to both;(d) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months, to a fine not exceeding the statutory maximum or to both. (3) In relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003, the reference in subsection (2)(b) to 12 months is to be read as a reference to 6 months.”
Amendments 51 to 56 agreed.
57: After Clause 7, insert the following new Clause—
“Offences by bodies corporate
(1) If an offence under section (Offence) committed by a body corporate is proved—
(a) to have been committed with the consent or connivance of an officer of the body, or(b) to be attributable to any neglect on the part of such an officer,the officer, as well as the body corporate, is guilty of the offence and liable to be proceeded against and punished accordingly.(2) In subsection (1) “officer”, in relation to a body corporate, means—
(a) a director, manager, secretary or other similar officer of the body;(b) a person purporting to act in any such capacity.(3) If the affairs of a body corporate are managed by its members, subsection (1) applies in relation to the acts and defaults of a member in connection with the member’s functions of management as if the member were a director of the body corporate.”
Amendment 57 agreed.
Amendment 57A not moved.
Amendments 58 to 62
58: After Clause 7, insert the following new Clause—
“Application to unincorporated associations
(1) In a case falling within subsection (2), an unincorporated association is to be treated as a legal person for the purposes of sections (Power to request LME undertaking) to (Offence).
(2) A case falls within this subsection if it relates to a trigger offence for which it is possible to bring proceedings against an unincorporated association in the name of the association.
(3) Proceedings for an offence under section (Offence) alleged to have been committed by an unincorporated association may be brought against the association in the name of the association.
(4) For the purposes of such proceedings—
(a) rules of court relating to the service of documents have effect as if the association were a body corporate, and(b) the following provisions apply as they apply in relation to a body corporate—(i) section 33 of the Criminal Justice Act 1925 and Schedule 3 to the Magistrates’ Courts Act 1980;(ii) sections 70 and 143 of the Criminal Procedure (Scotland) Act 1995;(iii) section 18 of the Criminal Justice Act (Northern Ireland) 1945 (c. 15 (N.I.)) and Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I 26)). (5) A fine imposed on the association on its conviction of an offence is to be paid out of the funds of the association.
(6) If an offence under section (Offence) committed by an unincorporated association is proved—
(a) to have been committed with the consent or connivance of an officer of the association, or (b) to be attributable to any neglect on the part of such an officer,the officer, as well as the association, is guilty of the offence and liable to be proceeded against and punished accordingly.(7) In subsection (6) “officer”, in relation to any association, means—
(a) an officer of the association or a member of its governing body;(b) a person purporting to act in such a capacity.”
59: After Clause 7, insert the following new Clause—
“Application to partnerships
(1) If an offence under section (Offence) committed by a partner of a partnership which is not regarded as a legal person is shown—
(a) to have been committed with the consent or connivance of another partner, or(b) to be attributable to any neglect on the part of another partner,that other partner, as well as the first-mentioned partner, is guilty of the offence and liable to be proceeded against and punished accordingly.(2) Proceedings for an offence under section (Offence) alleged to have been committed by a partnership which is regarded as a legal person may be brought against the partnership in the firm name.
(3) For the purposes of such proceedings—
(a) rules of court relating to the service of documents have effect as if the partnership were a body corporate, and(b) the following provisions apply as they apply in relation to a body corporate—(i) section 33 of the Criminal Justice Act 1925 and Schedule 3 to the Magistrates’ Courts Act 1980;(ii) sections 70 and 143 of the Criminal Procedure (Scotland) Act 1995;(iii) section 18 of the Criminal Justice Act (Northern Ireland) 1945 (c. 15 (N.I.)) and Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I 26)). (4) A fine imposed on a partnership on its conviction of an offence is to be paid out of the funds of the partnership.
(5) If an offence under section (Offence) committed by a partnership is proved—
(a) to have been committed with the consent or connivance of a partner, or(b) to be attributable to any neglect on the part of a partner,the partner, as well as the partnership, is guilty of the offence and liable to be proceeded against and punished accordingly.(6) In subsections (1) and (5) “partner” includes a person purporting to act as a partner.
(7) For the purposes of this section a partnership is, or is not, “regarded as a legal person” if it is, or is not, so regarded under the law of the country or territory under which it was formed.”
60: After Clause 7, insert the following new Clause—
“Supplementary provisionConsequential and related amendments
Schedule (Consequential and related amendments) (consequential and related amendments) has effect.”
61: After Clause 7, insert the following new Clause—
“Regulations under sections 1 to (Interpretation)
(1) The Secretary of State must obtain the consent of the Scottish Ministers before making—
(a) regulations under section 3 or (Power to request LME undertaking) which prescribe a requirement, function or offence in a case where provision imposing the requirement, conferring the function or creating the offence would be within the legislative competence of the Scottish Parliament if contained in an Act of that Parliament, and(b) regulations under section (Functions in relation to labour market) which confer a function in a case where provision conferring the function would be within the legislative competence of that Parliament if contained in an Act of that Parliament.(2) The Secretary of State must obtain the consent of the Welsh Ministers before making—
(a) regulations under section 3 or (Power to request LME undertaking) which prescribe a requirement, function or offence in a case where provision imposing the requirement, conferring the function or creating the offence would be within the legislative competence of the National Assembly for Wales if contained in an Act of that Assembly, and(b) regulations under section (Functions in relation to labour market) which confer a function in a case where provision conferring the function would be within the legislative competence of that Assembly if contained in an Act of that Assembly.(3) The Secretary of State must obtain the consent of the Office of the First Minister and deputy First Minister before making—
(a) regulations under section 3 or (Power to request LME undertaking) which prescribe a requirement, function or offence in a case where provision imposing the requirement, conferring the function or creating the offence would be within the legislative competence of the Northern Ireland Assembly if contained in an Act of that Assembly made without the consent of the Secretary of State, and(b) regulations under section (Functions in relation to labour market) which confer a function in a case where provision conferring the function would be within the legislative competence of that Assembly if contained in an Act of that Assembly made without the consent of the Secretary of State.(4) Regulations under section 3, (Functions in relation to labour market) or (Power to request LME undertaking) may make such provision amending, repealing or revoking any provision of any enactment, including sections 1 to (Interpretation), as the Secretary of State considers appropriate in consequence of the regulations.”
62: After Clause 7, insert the following new Clause—
In sections 1 to (Interpretation)—“enactment” includes—
(a) an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978;(b) an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament;(c) an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales;(d) an enactment contained in, or in an instrument made under, Northern Ireland legislation;“enforcing authority” has the meaning given by section (Power to request LME undertaking);
“financial year” means a period of 12 months ending with 31 March;
“labour market enforcement function” has the meaning given by section 3;
“LME order” has the meaning given by section (Power to make LME order on application);
“LME undertaking” has the meaning given by section (Power to request LME undertaking);
“non-compliance in the labour market” has the meaning given by section 3;
“respondent” has the meaning given by section (Power to make LME order on application);
“subject” has the meaning given by section (Power to request LME undertaking);
“trigger offence” has the meaning given by section (Power to request LME undertaking).”
Amendments 58 to 62 agreed.
Clause 8: Offence of illegal working
63: Clause 8, page 5, line 6, at end insert “, without reasonable excuse,”
At Second Reading we expressed support for measures to toughen the penalties against employers who exploit employees. However, we expressed our concern about the provisions in the Bill in respect of those who work without leave to remain or beyond the restrictions of their visa, and which classify wages earnt in such employment as proceeds of crime. For employees in this situation the Bill creates a new criminal offence that is strict and without any defence, since it is committed if the individual employed does not have the right immigration status, and could result in a sentence of up to a year in prison.
No defence is set out in Clause 8. Our position is that there should not be such an offence for employees, but we also have an amendment in this group that would provide a defence of “reasonable excuse”. That amendment will provide the Government with an opportunity to clarify whether there is any defence to this new offence and, if they consider that there could be circumstances in which the offence would not be committed by an employee who did not have the right immigration status, to say why they have not included that, or provided for that situation, in the Bill.
What would be the position, for example, of people who were working in the belief that they had the right immigration status to do so—perhaps because they were sponsored by the employer—and then it emerged that they had committed this new offence because, without their knowing it, their employer had not completed all the necessary arrangements for sponsorship? Is the employee guilty of committing the new criminal offence, thus becoming a criminal? Unless there was a defence under the Modern Slavery Act—that certainly would not be the case in the situation I have outlined—Clause 8 would appear to say yes. Is that fair, just and proportionate?
The Government’s line to date appears to be that the Director of Public Prosecutions can give guidance on whether a prosecution is in the public interest and that a court also has powers to stop an inappropriate prosecution for abuse of process. This, of course, could apply only if the process for taking action against an employee had already commenced. However, in the potential situation I have just outlined it cannot be right to leave the decision whether to proceed to the discretion of the Director of Public Prosecutions, because surely such discretion is meant to be applied to the known offence and known defences to that offence. Under the Bill there is no defence to the offence of illegal working, which is triggered by not having the right immigration status. Surely, if a proper case can be made as a defence by an employee against the new offence of illegal working, it ought to be in the Bill, put there by Parliament, rather than left to the discretion of the Director of Public Prosecutions. This discretion should surely be in respect of how a laid-down defence should operate in individual cases in relation to whether a prosecution would be in the public interest, rather than, in effect, leaving it to the DPP to introduce a back-door defence that is not in the Bill and would not be an appropriate use of the DPP’s guidelines.
Clause 8 also appears to create a disparity between employers and employees on the issue of illegal working. It would appear that under Clause 9, employers are guilty of the offence of employing an illegal worker only if they do so “knowing”,
“or having reasonable cause to believe”,
that the employee does not have the required immigration status. That presumably means there is a test of reasonableness before they can become criminalised. There is no such test of reasonableness for employees in Clause 8. So, in a situation where an employer reasonably believed they had completed the necessary processes to sponsor an employee, but it subsequently emerged that, without their realising it, they had not, the employer has a potential defence; but the employee, who likewise had every reason to believe they were properly sponsored by their employer, and then found out that they were not, would have no defence. Perhaps the Minister can confirm that that is an entirely credible scenario under the Bill as it stands, and explain why an employee does not have the same kind of defence available to them as an employer in respect of the offence of illegal working.
We have also tabled Amendment 66, which would introduce a test of recklessness rather than negligence for the offence of employing an illegal worker, to reduce the possibility of hidden discrimination by employers wanting to avoid the risk of falling foul of this new criminal offence when deciding who to employ.
We think it would be better if Clause 8 was not in this Bill at all, because it will increase the likelihood and extent of exploitation and potentially put at risk some of the good work being achieved in this regard by the recent Modern Slavery Act. Migrants and vulnerable employees are very vulnerable under current conditions and often feel that they cannot come forward to explain to anyone what is happening to them, for fear, as the Migration Advisory Committee has said, of being sacked or deported. If the offence of illegal working is for the first time to be applied to employees, there is a distinct likelihood that the most exploited and vulnerable will become more exploited and vulnerable as they feel pushed further and further away from any legal protection. One can virtually guarantee that an unscrupulous employer would not hesitate to use the threat of being prosecuted for illegal working, receiving a criminal record and going to prison for 12 months, as a means of ensuring that a vulnerable and exploited employee did not speak out. The more vulnerable workers are, the stronger the hand of the gangmasters or unscrupulous employers who seek to employ them, and the less likely vulnerable workers are to come forward to report their abusers.
Even among those who have a right to work here, awareness of their rights does not always appear high. According to the National Crime Agency, in cases that it has taken up, 78% of those who have been exploited for their labour in the UK have the right to work here as EEA nationals. Among people whose understanding of their rights is limited, one can be sure that, with this new criminal offence of illegal working, the threat of 12 months’ imprisonment and criminalisation will also be exercised against those who have a right to be here and working, as well as those who do not, with the no doubt unintended consequence of making it less likely that people will come forward to report their abusers.
There are three drivers of exploitation that those who campaign on this issue and work in this field have identified. One is the feeling among migrant workers that they deserve less or have fewer rights than UK citizens; another is the lack of checks on labour standards in the workplace, including everything from health and safety to minimum wage enforcement; and the final one is a fear of officials, especially of immigration officials or those who might have links to immigration officials. Clause 8, with its new offence for employees of illegal working, will make the first and last of those drivers of exploitation even more powerful.
On the second driver—the lack of enforcement against non-compliance with labour standards—it is worth noting that one of the organisations that campaigns and works to reduce exploitation told the Immigration Bill Committee in the other place that what would prevent people who should not be here, or not still be here, from working here would be enforcement of labour standards across the board, as the demand for workers who should not be here is due not to employers preferring such workers over those who have a right to be here, but to the fact that they cannot as easily pay workers who have a right to be here less than the minimum wage as they can workers who do not have the right to be in and work in this country.
If the Government want to address the extent of illegal working, they should concentrate on enforcement of labour standards rather than introduce a clause that creates a new offence of illegal working for employees, which will make it less, not more, likely that cases of labour exploitation and abuses of labour standards come to light. There is no significant evidence of which I am aware that this offence for employees is needed, as there are existing offences under which such employees can be charged if they are in this country when they should not be here or still be here. No one has been going round saying that an illegal working offence for employees is needed to solve that problem.
The only argument that the Government have produced for this new offence and its potentially significant and damaging unintended consequences relates to the recovery of earnings under the Proceeds of Crime Act 2002 from those who have been working in this country when they no longer have an immigration status that entitles them to do so, such as overstayers, and an apparent government concern expressed by the Minister in the other place that in this situation the courts do not always regard earnings derived from working illegally as the proceeds of crime when considering cash seizure or asset confiscation cases. If that is the problem, no doubt the Minister will take the opportunity in his response to place on record the size and nature of it, and the amounts of money involved and the likelihood of it being recovered, since it would appear that this new offence is designed to tackle a much smaller number of individuals and their proceeds than those working illegally.
The Crown Prosecution Service guidance on proceeds of crime identifies a need to prioritise the recovery of assets from serious organised crime and serious economic crime. Pursuing workers who should not be here or still be here and who are working for little money and living a subsistence existence, consequently having limited realisable assets, will presumably not be a priority in line with the guidance, since it will not be cost effective or in the public interest to pursue confiscation proceedings against such people.
It would be helpful if the Minister could say to what extent the Government have sought to find other ways of addressing the problem that concerns them in respect of the Proceeds of Crime Act without leaving employees who are already being exploited facing threats, accurate or inaccurate, from those exploiting them of potentially being prosecuted, criminalised and sent to prison for 12 months with the intention of further discouraging them from daring to report their abusers. One would have thought that encouraging employees to report abuse should be the objective.
Clause 8 is potentially very damaging in its no doubt likely unintended consequences. The Government will no doubt say that the approach to dealing with those who have entered the country illegally and committed an offence will be to deport rather than prosecute. If that is the point the Government are going to make, then Clause 8, with the offence of illegal working by employees because of their immigration status, adds absolutely nothing. Instead, it will make it less likely than ever that such people will come forward and whistleblow about what is being done to them, and as a result it will frustrate the desire we all have to tackle illegal working and labour exploitation.
I hope the Minister will indicate that the Government will think again on the introduction of this new offence for employees, which is more likely to reduce the extent to which those being exploited or abused in the labour market will come forward and whistleblow on their abusers than to reduce the incidence of illegal working. I beg to move.
My Lords, my noble friends and I have very considerable objections to Clause 8 which, while I was going to say will achieve nothing, will possibly achieve too much. It is not a positive and helpful development in any way and will cause very considerable difficulties and negative consequences. The noble Lord, Lord Rosser, has covered the ground very thoroughly, but I do not think I can stress our objections too heavily.
I add to some of the things that he has said by a reference to what happened in Italy. The email from which I quote comes from the executive secretary of the Council of Europe Convention on Action against Trafficking in Human Beings. I met her and some of her colleagues a few months ago when she mentioned what had happened in Italy. She followed this up by explaining that in 2009 Italy criminalised irregular entry and stay, a situation equivalent to ours. She said that it was,
“criticised for creating an overly-bureaucratic system … which push migrants into illegality … the introduction of the offence of illegal entry and stay has created additional difficulties in securing convictions as witness statements given by irregular migrants are not considered as trustworthy and they are afraid to report cases of exploitation … for fear of being detained and expelled. The UN Special Rapporteur on trafficking in persons, especially women and children, has stressed in her recent report the negative consequences of the criminalisation of irregular migration for victims of trafficking”.
The outcome of the problems was that, in January 2014, Italy’s Senate overwhelmingly approved the Italian Government’s decriminalisation of illegal immigration. There we have a real-life example.
Of course this is not entirely new. Criminal offences were created for Romanian, Bulgarian and Croatian workers working without authorisation. I know that the Immigration Law Practitioners’ Association has asked the Home Office for statistics on the numbers of prosecutions for those offences, and also whether the employers were prosecuted or made subject to a civil penalty when the employee was prosecuted. The ILPA has not received that information. It would help us all if we could see figures to understand whether offences resulted in a displacement of enforcement activity away from employers to the workers.
The noble Lord talked about the deterrent effect of a criminal offence on those who might otherwise feel able to report exploitation and abuse. What safeguards will there be with regard to the identification of trafficking and forced labour indicators? Will those be written into guidance on enforcement?
I am not sure whether the noble Lord added to his list of concerns the specifics of not risking referral to the national referral mechanism if there is a negative conclusive grounds decision. That would achieve the very opposite of what a victim would be hoping for. There is also the concern that traffickers may use the offence as another tool to coerce victims in exploitation.
With regard to what the noble Lord has indicated is the only reason for an offence—the realisation of assets—those who would be the subject of this would be likely to have very limited realisable assets. I confess that I have not looked at the impact assessment on this, which might show what the Government think they could claw in as a result, but will it really be cost-effective or in the public interest to pursue confiscation proceedings?
We added our names to Amendment 63. I support what the noble Lord said regarding the possibility of a defence under the Modern Slavery Act, but only to a limited extent—it is better not to prosecute at all.
We have our own probing amendment on voluntary work and volunteering. I had not realised until recently that voluntary work was considered work for the purposes of the restrictions on asylum seekers working. It is particularly harsh, for reasons that we will come to in debate later in the Bill on the right of asylum seekers to work, that they cannot even undertake voluntary work—volunteering is different. I would simply summarise it as the importance of self-respect on the part of asylum seekers and the wish to contribute to society, as well as boredom. Those are among the concerns.
Finally, we have an amendment that would substitute,
“is reckless as to whether”,
“has reasonable cause to believe that”,
an employee is disqualified. That would make it a higher hurdle. Amendment 67 would also insert,
“reckless as to whether the employee is an adult subject to immigration control”.
On that basis, most asylum seekers do not actually have “leave”. They are on temporary admission while their applications are considered. That is a technical point as to whether the legislation will be correctly framed.
However, I would like to see the back of this altogether. I hope that at least making that point on these clauses will not be relevant because we might not be considering them for much longer. One lives in hope.
My Lords, I support the opposition to Clause 8 standing part of the Bill and I also support Amendment 63. At Second Reading a number of noble Lords expressed fears about potential exploitation as a result of Clause 8, reflecting the worries of organisations working on the ground. The Minister tried to reassure us that our fears were unfounded, but the range of organisations that are worried about it must give cause for concern. Also a number of organisations, including the Law Society, have stated that the clause is unnecessary. The Law Society argues that,
“the creation of parallel criminal offences is wrong in principle and creates confusion”.
My noble friend Lord Rosser raised the point about the disparity between the defence of reasonableness that is available to employers not being available to employees who are accused of illegal working. That was a point which was raised in the Public Bill Committee by more than one Member, but as far as I can see it was not addressed by the Minister there in his response, so I hope that the Minister here will be able to say something about it today. Why is there no parallel defence for employees?
As well as the risk of exploitation, I am concerned that the state will in effect be exploiting undocumented workers when it seizes their wages. I am not a lawyer, but it seems to me as a lay person that there is a distinction to be made between the confiscation of assets that are the proceeds of a crime such as stealing, burglary or fraud and those that are the result of the criminalisation of the sale of one’s labour. In support of my rather basic lay understanding, I pray in aid ILPA’s briefing. It points out, as did my noble friend Lord Rosser, that,
“the Crown Prosecution Service Guidance on the Proceeds of Crime says that it should prioritise recovery of assets from serious organised crime and serious economic crime”.
Surely we are not talking about that here. ILPA continues by stating that:
“A confiscation order must be proportionate to the aim of the legislation, which is to recover the financial benefit that the defendant has obtained from the criminal conduct … The purpose of the legislation is not to further punish the offender by fining them, or to act as a deterrent. If the confiscation order is not proportionate then it will be a violation of the right to peaceful enjoyment of property under Article 1 of Protocol No. 1 to the European Convention on Human Rights”.
It would appear that potentially an important human rights issue is being raised here.
The noble Baroness, Lady Hamwee, referred to the experience in Italy. Another aspect of that was put by the organisation FLEX in its briefing, which states that evidence from that experience,
“demonstrates the impracticality of attempts to seize undocumented workers’ assets. Under an ‘irregular migration offence’ provided for in the ‘Bossi-Fini Law 2002’ undocumented workers could be fined for working without documents in Italy. This offence was ultimately repealed in 2014, one of the reasons for which was the heavy bureaucracy and limited success associated with gaining financial penalties from undocumented workers”.
On both principled and potentially human rights grounds, as well as practical and pragmatic grounds, I really do believe that the clause should not stand part of the Bill.
My Lords, I thought that the noble Lord, Lord Rosser, made rather a good case for inserting the words “without reasonable excuse”, and I certainly agree with the noble Baroness, Lady Hamwee, about voluntary work. But perhaps I may raise a wider issue. Making illegal working a specific offence will fill a gap, as the noble Lord, Lord Bates, pointed out in his helpful letter of 8 January. It means that those who have entered illegally or who have overstayed their visas could now be prosecuted for working in the UK.
When I gave evidence to the Public Bill Committee of the other place, a former DPP said that in practice he had not known of a case where it was necessary to have this law because other provisions could be brought to bear. However, impressions matter. The present situation must be an excellent selling point for anyone who happens to be a people smuggler. Indeed, at this very moment there are literally thousands of young men camped near Calais. They are there because they believe that if they once get into the UK they can work illegally and send home what to them are very substantial sums of money. If detected, they can claim asylum and be here for a considerable period longer.
The fact that working illegally in the UK is not even an offence sends out entirely the wrong message, as the Mayor of Calais never tires of telling us. She is right; we should change the law. This is about deterrence and it is especially important in present circumstances.
My Lords, I support other noble Lords who have objected to Clause 8 and the introduction of the offence of illegal working.
The noble Lord, Lord Green, said that it sends out a powerful message if there is such a criminal offence, but my fear is that it would send out a message that empty window dressing statute is redundant and that it is not effective law if we end up with no prosecutions and no confiscations. As other noble Lords have mentioned, the guidance from the CPS on proceeds of crime suggests that there will be very few cases when it would be in the public interest to pursue confiscation proceedings. The question has rightly been asked by my noble friend Lady Hamwee. On the question of whether there have been any prosecutions of Romanian, Bulgarian and Croatian workers for working without authorisation, I confess that it was news to me that there were already such criminal offences. I thank ILPA for that fact. We do not know whether there have been prosecutions of employees or whether employers were prosecuted in the same cases. It would help to know whether there has been a displacement of enforcement activity away from employers to employees, or whether we have offences on the statute book that have simply proved inoperative.
That is what would bring the law into disrepute. I have a feeling that if this was coming out of Brussels, it would rightly be criticised as a useless piece of legislation—not least by the present Government. It might be quite right to do so. There can already be prosecutions of people for breaching immigration law in arriving in the country in the first place. I do not know how many prosecutions there are—perhaps the Minister could tell us. The alleged purpose of this offence is to fill the gap that is said to exist whereby the Proceeds of Crime Act cannot be deployed. It seems very unlikely that that would be used because of the disproportionate nature of taking such action. We will end up with something on the statute book that frankly does not add up to a row of beans—all for the sake of window dressing and sending signals to certain parts of the press and the electorate, presumably.
I find extremely powerful—much more powerful than anything I could say—the evidence given to the Public Bill Committee in the other place by Tony Smith, who spent 40 years in the Immigration Service, ending up as director-general of the UK Border Force. He said:
“The main lesson we learned”,
from an experiment about doing this kind of thing,
“was that the criminal justice system is not the most effective way to manage immigration offenders. It tied up the police and the courts unnecessarily and failed to fulfil the required intention of the Immigration Law”,
which is to remove people who breach such law. He continued:
“It was deemed more effective and efficient to serve a notice of intention to deport … than to prosecute”,
under immigration offences. As came out at Second Reading, most of us who objected to Clause 8 said that the focus of remedies for breach of immigration law is to remove those people who are in breach. If you prosecute it is enormously expensive and time-consuming.
Mr Smith went on to say about proceeds of crime that,
“illegal workers invariably have very limited means at their disposal. They are usually paid at or below the minimum wage; and any funds they do accrue are quickly remitted overseas. This is not a sensible group to target under the Proceeds of Crime Act—nor will it act as a deterrent. In the same way that deploying scarce resources on prosecutions will limit the capacity of immigration enforcement to achieve more removals, deploying scarce resources on POCA work to seize assets that don’t exist will be wasteful and unproductive”.
I cannot do better than that. I hope that the Minister, in his response, will give us some indication that the Government will accept that Clause 8 is a waste of space.
My Lords, I am not happy about the inclusion of Clause 8, on the grounds that it creates a new offence that can be punishable with up to one year’s imprisonment and/or a fine. I also note that it is one year for England and Wales, but only six months for Scotland or Northern Ireland. That seems pretty inconsistent.
As regards Amendment 64, I always understood that asylum applicants could undertake voluntary work, provided that they were not paid, of course, and that they kept themselves available for interviews, whenever those might be required. Perhaps the Minister would say whether I am right, or whether the noble Baroness, Lady Hamwee, is right.
My Lords, the Government have four amendments—Amendments 65, 68, 69 and 70—in this group. I shall speak to the amendments and then come back to the very legitimate points that have been raised and questions posed. I shall respond to them in turn.
Noble Lords are familiar with the reason why the Government are creating the offence of illegal working: to address a genuine gap in the law which currently impedes our ability to address the economic incentives behind illegal work where they exist. It is against this explanation and the safeguards to ensure its appropriate use that I turn to the amendments that have been tabled.
The Government have carefully considered the amendment to introduce the defence of “without reasonable excuse”. However, we believe that this introduces considerable ambiguity. Introducing such a wide defence risks making it very difficult to achieve a successful prosecution. The Government have also considered the amendment to remove voluntary work from the ambit of the offence. However, we believe that this is unnecessary because someone undertaking genuine voluntary work would not be working under the purposes of a contract. Therefore, genuine voluntary work is not caught by new Section 24B(9), introduced by Clause 8, and it therefore falls outside the ambit of the offence.
I share the concerns of noble Lords who want to ensure that this offence is used appropriately. The offence is not aimed at the victims of modern slavery, where the statutory defence in Section 45 of the Modern Slavery Act will still apply, as will common-law defences, such as duress. The circumstances of someone’s illegal working will be taken into account by the CPS and prosecutors in Northern Ireland and Scotland when deciding whether it is in the public interest to prosecute.
I also urge noble Lords to see the creation of this offence in the context of other measures in the Bill and elsewhere to increase the protection and support for victims of slavery and trafficking, strengthen enforcement against exploitation through the creation of the Director of Labour Market Enforcement and taking tougher action against employers of illegal workers.
We should remember that individuals with an irregular immigration status are already likely to be committing a criminal offence, regardless of whether they are working. The Government’s policy remains unchanged and they will continue to seek the removal of illegal workers from the UK, and prosecute only where the CPS or prosecutors in Northern Ireland and Scotland consider that their prosecution is in the public interest. This remains the right approach. The new offence, however, will serve as an important deterrent to illegal economic migrants and close a gap in the Proceeds of Crime Act powers, which do not necessarily require a conviction.
I have listened carefully to noble Lords’ concerns regarding the strict liability nature of the offence. While I am of the opinion that there are sufficient safeguards to ensure that the offence is used appropriately and that victims of modern slavery are protected, I can assure noble Lords that I will reflect very carefully on today’s discussions and the points which have been made ahead of Report.
I now turn to the offence of employing an illegal worker in Clause 9 of the Bill. The Government’s intention in using “reasonable cause to believe” as the test is to provide a more objective test for the existing offence of employing illegal workers and so make the offence easier to prove. The test is intended to capture those employers who have wilfully turned a blind eye to someone’s immigration status when employing them so that the employer cannot be said to have known.
Introducing a test of recklessness would not resolve the difficulties in establishing an employer’s state of mind that the Government are seeking to address in the Bill. This is because the test of recklessness would remain subjective, requiring proof that the employer foresaw a risk that the person had no right to work, yet went on to take that risk and employ them.
The test of reasonable cause to believe is not the same as negligence. The intention is to continue to apply the civil penalty sanction to those employers who are simply negligent—that is to say, who act without reasonable care and skill—in terms of not checking a person’s right to work, or not doing so correctly.
The Government’s amendment requires an employer positively to have a reason to believe that the individual cannot accept the employment. It will enable prosecutions to be brought against employers who choose not to undertake the necessary checks because they have reasonable grounds to believe that such checks will reveal that the employee has no right to work. This is in addition to the Government’s intention to continue to prosecute those who we can show actually know that someone has no right to work here, as we can do now under the current wording of the offence.
I now turn to some of the points raised during our debate. The noble Baroness, Lady Ludford, asked about the projected size and suggested that the sums that we were talking about were fairly minuscule. I refer noble Lords to my letter to the noble Lord, Lord Rosser, on 8 January, to which the noble Lord, Lord Green, referred. On page 2, it says:
“In 2014-15, the courts approved the forfeiture of cash totalling £542,668 seized by immigration officers. Following criminal convictions for immigration-related offences courts ordered the confiscation of assets totalling £966,024. We expect that in-country seizure could double with the use of the extended powers enabled by the new illegal working offence”.
Therefore, I do not think that these are inconsequential amounts—£1 million is quite a substantial amount. It is twice the budget of the relevant employment agency body. As I say, these are significant sums.
There is a slight sense that we were looking at destitute, highly vulnerable people, and that they would be the target of these initiatives. We are talking here about people who have on their person a significant amount of cash in excess of £1,000.
I am sorry to interrupt but I meant to mention that because I saw it in the noble Lord’s very helpful letter. But where is it in the legislation? I looked for it but I could not find any reference to a £1,000 limit or anything. I wondered whether I had missed it.
It comes under the Proceeds of Crime Act. What we are doing here is simply drawing that element into line. The accusation appears to be being made that somehow the Government are targeting people who are here illegally. Of course, if they are here illegally, they should not be here and they should rightly be removed. However, it is odd that under the legislation to which I referred, we can currently prosecute those who have permission to be in the UK and are working in breach of their conditions. We can confiscate the relevant sums under the Proceeds of Crime Act for those who are legally here in breach of their conditions. However, if someone is illegally here, or they have overstayed, we cannot do that. Noble Lords will need to comment on that themselves. However, if they believe that this provision is too punitive for people who are working illegally in this country, they ought also to say—I am not inviting them to do this by Report—that people who breach the terms of their existing stay in the country, such as students who work beyond the hours legally allowed, ought to be exempt as well. The fact that there is one rule for people who are legally here but breach their conditions, and another for people who are illegally here, seems to me wrong as there is a gap. We are trying to close that gap.
I am grateful to the noble Lord for giving way and apologise for interrupting. My question may simply reflect my ignorance of immigration law but I am reminded that I asked at Second Reading why immigration law could not be changed. We have so much immigration law that I should have thought that the situation was covered. So, for the offence of breaching conditions attached to immigration status, you can be prosecuted and your proceeds removed, but if you work in breach of immigration law as a whole—that is, you have totally driven a coach and horses through immigration law through being here at all—you apparently cannot be prosecuted and be subjected to POCA. Therefore, it seems to me that the root of the problem stems from immigration law and that the solution is not to create a new offence of illegal working but to go back to immigration law to determine why you can deal with some people breaching it but not others doing so.
This is an Immigration Bill. I take the point that of course we need to continue to look at all these points. I am simply saying that it has somehow been portrayed that we are being inconsistent in singling out people who have fallen on hard times and are having a tough time in life, and mercilessly pursuing them. In fact, all we are doing is ensuring equality of treatment. Moreover, and more seriously, if we were introducing this measure in 2014, I would feel a lot more uneasy about it. Since the Immigration Bill 2014—taken through by my noble friend Lord Taylor of Holbeach—we have introduced the Modern Slavery Act, Section 45 of which is a statutory defence for people who are the victims of crime. This is widely welcomed and appreciated. That defence was not there in the Immigration Bill 2014 but is there now, and we are plugging a gap.
The noble Lord, Lord Hylton, asked why there are different sentences across the UK. The maximum prison sentence for a Clause 8 offence is the same across the UK. This will remain the case until Section 281(5) of the Criminal Justice Act 2003 is commenced. This reflects devolution and is set out at subsection (3) of the new offence. If that does not make it crystal clear to the noble Lord, I can assure him that he is not alone. If, when we read that in the Official Report, further explanation is needed, I will be happy to provide it. The gist is that the sentence is consistent across the United Kingdom.
The noble Baronesses, Lady Ludford and Lady Hamwee, both asked how many prosecutions had taken place of Bulgarian, Romanian and Croatian nationals. Parliamentary Questions 12752 and 12753 on this were answered in 2015. Between 2007 and 2013 there were three prosecutions where this was the principal offence—that is, the offence where the heaviest penalty may be imposed. During the financial years 2006-07 to 2013-14, a total of 491 penalty notices were issued. This offence, and penalty, only related to those migrants who were subject to accession regulations, while the new offence will relate to all migrants who work illegally in the UK.
It is not the case that an employer of an asylum seeker with permission to work has no protection unless the asylum seeker has leave to be in the UK. Section 24 of the Immigration, Asylum and Nationality Act 2006 ensures that those on temporary admission, including asylum seekers, are deemed to have leave for the purposes of the Section 21 offence. Therefore, if, as an exception, they have permission to work, they will not be committing an offence simply because they do not have leave.
A number of noble Lords asked about voluntary work. For work to fall within the ambit of the offence it must be under or for the purposes of a contract. Genuine voluntary work should not be subject to a contract. Volunteering must not be used as a pretence for paid work. A question was asked about whether visitors can undertake activities on a voluntary basis. The answer is yes, they may volunteer, providing this is incidental to the purpose of their visit to the UK, is unpaid and for a period of less than 30 days. I was also asked about an illegal migrant who starts as an illegal worker but whose working conditions deteriorate to the point where they may become a victim of modern slavery. For illegal workers to benefit from the statutory defence, their illegal working must be as a direct consequence of their slavery or human trafficking. They will therefore not have the defence for any illegal working committed prior to the deterioration of their working conditions to the extent that they became a victim of modern slavery. However, their subsequent slavery or human trafficking will be relevant factors for the Crown Prosecution Service to take into account when considering whether a prosecution is in the public interest. For absolute clarity, only the wages earned before the statutory defence applies to them would be recoverable under the proceeds of crime legislation.
I think I have covered most of the points raised. If there are any that I have missed, I will be happy to deal with them. I covered the point about reasonable excuse and reasonable cause in my main contribution. It remains our view that what is unfair is firms undercutting their competitors through exploitative use of illegal labour, so distorting competition, and those illegal workers taking jobs that should be available to all workers who are legally here and legally part of the labour market. I therefore commend the amendment standing in my name in this group, and ask the noble Lord to consider withdrawing his amendment at this stage.
I have two points, if I may. The Minister might have realised that referring to voluntary work and volunteering provoked quite a lot of chuntering around me, and on the Cross Benches. Listening to him, it seemed that the concepts of volunteering and voluntary work were being confused. When I looked at this a little while ago, I understood that they are different. I was confused at the beginning of the Minister’s speech when he talked about voluntary work not involving a contract. I am not sure whether that is always the case. I do not think we will be able to debate this now, but it would be very helpful if we could understand it a little more clearly—I think I speak for at least four of your Lordships, and possibly those behind me as well.
The other point is quite different. I would not necessarily agree with them but I followed the Minister’s comments about recklessness. He said that if the words “reasonable excuse” were included in the new illegal working provision in Clause 8, it would mean fewer successful prosecutions. That is indeed self-evident but it does not answer the point about whether it should be a defence, or whether the offence should be one where there is no reasonable excuse. Earlier in the debate, the noble Lord, Lord Rosser, raised the possible situation of someone being confused by what permission he had, or by the documents and so on. I would like, at any rate, to understand better what I heard from the Minister on that point.
It is the same argument as before: whether the same test applies to people who are here legally—in one form—but are exceeding or abusing the terms by which they are in the UK. The noble Baroness may be saying that if that provision contained the phrase “without reasonable excuse”, it should be read across. But there is no ability to say that you can be prosecuted for the proceeds of crime unless you have a reasonable excuse. It is therefore consistent to apply the same test to somebody who is here illegally as to somebody who is here legally but exceeding the terms of their permission to be here.
The new offence will serve as an important deterrent. I have listened very carefully to the noble Lord’s concerns. Although I am of the opinion that there are sufficient safeguards to ensure that the offence is used appropriately and that victims of modern slavery are protected, I said that I would reflect on that point very carefully, listen to the debate and come back with further remarks on Report. The particular point was about whether the defences are sufficient for those who may have been the victims of modern-day slavery.
Do I understand that it will not cover the example that I referred to and which the noble Baroness, Lady Hamwee, has just referred to? That is where an individual had effectively been told by their employer that they could be employed, but it was subsequently found out, for example, that the employer was not properly sponsoring them because for some reason or other they had not completed the necessary paperwork correctly, and therefore the individual found themselves in a situation where they were not entitled to work. That was, in essence, the point I was raising.
I appreciate it is probably unfair to expect the Minister to respond to that point now, but I get the impression from what he has said that the area he has agreed to reflect on is very limited. I would hope that he might be willing to say, without making any commitment, that he will reflect on the necessity of this whole issue relating to the offence of illegal working for employees. I accept that this is not the only argument that has been raised, but the principal argument is that the threat of action being taken will be used to deter vulnerable people who may be being exploited, to a greater or lesser degree, from coming forward to expose and report their abusers. That is the principal effect that this new offence is likely to have, and it is likely to be used in that way by unscrupulous employers. I do not think that the Minister has responded directly to that point and I simply urge him to reflect on what has been said on that particular issue—without, I accept, making any commitment—between now and Report.
I am very happy to do that. If it would be helpful, I would also be very happy to meet with the noble Lord and other interested Peers, with the relevant officials, to talk through our experience on that, which is what has led us to the position that we have taken, and to hear what evidence they may wish to present to the contrary. I think both sides will find that very helpful ahead of Report.
Amendment 63 withdrawn.
Amendment 64 not moved.
Clause 8 agreed.
Clause 9: Offence of employing illegal worker
65: Clause 9, page 7, line 6, leave out subsection (1) and insert—
“(1) Section 21 of the Immigration, Asylum and Nationality Act 2006 (offence of knowingly employing illegal worker) is amended in accordance with subsections (1A) to (2).
“(1A) In subsection (1) for the words from “an adult” to the end of the subsection substitute “disqualified from employment by reason of the employee’s immigration status.”
(1B) After subsection (1) insert—
“(1A) A person commits an offence if the person—
(a) employs another person (“the employee”) who is disqualified from employment by reason of the employee’s immigration status, and(b) has reasonable cause to believe that the employee is disqualified from employment by reason of the employee’s immigration status.(1B) For the purposes of subsections (1) and (1A) a person is disqualified from employment by reason of the person’s immigration status if the person is an adult subject to immigration control and—
(a) the person has not been granted leave to enter or remain in the United Kingdom, or(b) the person’s leave to enter or remain in the United Kingdom—(i) is invalid,(ii) has ceased to have effect (whether by reason of curtailment, revocation, cancellation, passage of time or otherwise), or(iii) is subject to a condition preventing the person from accepting the employment.””
Amendment 65A (to Amendment 65) not moved.
Amendment 65 agreed.
Amendments 66 and 67 not moved.
Amendments 68 to 70
68: Clause 9, page 7, line 9, leave out “In that section,”
69: Clause 9, page 7, line 10, at end insert—
“(2A) Section 22 of the Immigration, Asylum and Nationality Act 2006 (offences by bodies corporate etc) is amended in accordance with subsections (2B) and (2C).
(2B) After subsection (1) insert—
“(1A) For the purposes of section 21(1A) a body (whether corporate or not) shall be treated as having reasonable cause to believe a fact about an employee if a person who has responsibility within the body for an aspect of the employment has reasonable cause to believe that fact.”
(2C) In each of subsections (2) and (4) after “21(1)” insert “or (1A)”.
(2D) In section 24(a) of the Immigration, Asylum and Nationality Act 2006 (temporary admission etc) for “21(1)” substitute “21(1B)”.”
70: Clause 9, page 7, line 17, after “21(1)” insert “or (1A)”
Amendments 68 to 70 agreed.
Clause 9, as amended, agreed.
Amendments 71 and 72 not moved.
Clause 10: Licensing Act 2003: amendments relating to illegal working
72A: Clause 10, page 7, line 31, at end insert—
“( ) Regulations under subsection (2) which make provision about Scotland may only be made with the prior consent of the Scottish Parliament, and regulations which make provision about Northern Ireland may only be made with the prior consent of the Northern Ireland Assembly.”
My Lords, this amendment and the two other amendments in both my name and that of my noble friend Lord Rosser are very straightforward and come to your Lordships’ House following the concerns raised by the report of the Constitution Committee published on 11 January. The amendments require the consent of the relevant devolved institution before regulations can be made covering their nation. The clauses that these amendments seek to amend presently allow the Secretary of State to by regulation make provisions in the other nations that would have similar effect to the provisions enforced in England—English provisions.
The Government take the view that the clause does not engage the conventions so the legislative consent Motions are not required. This has been disputed by many interested parties including the Law Society of Scotland, for example. It would be helpful for the House if the noble Lord, Lord Bates, in responding could set out carefully the reasoning behind the Government’s decision not to seek approval via the legislative consent Motion process. I am also grateful to the Constitution Committee for highlighting the differential legislative approaches adopted in respect of England and other parts of the United Kingdom and the difference in the degree of scrutiny that that implies. I for one am not convinced that this is a good way to handle these important matters. Again, I would be grateful if the noble Lord, Lord Bates, could outline why he thinks this is appropriate. I beg to move.
I am grateful to the noble Lord, Lord Kennedy, for moving the amendment and giving me an opportunity to say more on the record. I also pay tribute to the work of the Constitution Committee. I know that a number of recommendations in the report will have further bearing on our discussions in Committee. However, immigration is a reserved matter and the subject matter of all these amendments relates to parts of the Bill that remain within the immigration reservation which have not been devolved or transferred to a devolved legislature.
Amendment 72A relates to the measures to prevent illegal working on licensed premises. The Bill integrates protection against illegal working into the existing licensing regime, including by adding the Home Secretary to the list of responsible authorities for the purpose of the Licensing Act, by making the prevention of illegal working an objective of the licensing regime, and by requiring licence applicants to have the requisite right to work. The noble Lord, Lord Kennedy, raised the questions posed by the Constitution Committee on whether legislative consent Motions will be required. The legislation has a reserved purpose. It is necessary to amend devolved licensing laws in consequence of that reserved purpose. Legislative consent from devolved legislatures is not required.
We have consulted the devolved Administrations as the provisions have been developed. Alcohol and late-night refreshment licensing legislation in Scotland and Northern Ireland is complex and, in the case of Scotland, that legislation itself is subject to prospective amendment by the Scottish Parliament. We have therefore been working with the Scottish and Northern Irish Governments on the provisions to ensure that they can operate effectively within their licensing regimes. This work is ongoing and will continue in order to make equivalent provisions in regulations, using the order-making powers in the Bill once it has come into force.
Amendment 157A relates to the provisions in the Bill about residential tenancies. These provisions restrict the access of illegal migrants to private residential accommodation in the UK and concern the reserved area of immigration control. This is not an area in which Wales, Scotland or Northern Ireland have the competence to legislate and their consent is not required for the UK Government to legislate in this area. It is therefore inappropriate for the application of the residential tenancy provisions in the Bill to the rest of the UK to be subject to the consent of Wales, Scotland and Northern Ireland. It could lead to separate immigration controls applying in different parts of the United Kingdom, which would be to no one’s advantage, and to illegal migrants moving to jurisdictions which are perceived to be more lax.
Amendment 236A relates to provisions in Part 5 which will make it easier to transfer unaccompanied migrant and asylum-seeking children from one local authority to another and enable the Secretary of State to require local authorities to co-operate in the transfer of unaccompanied migrant children from one local authority to another, should voluntary arrangements fail. Immigration is a reserved matter, and immigration legislation already provides a UK-wide framework for migrants’ access to local authority services. The dispersal of migrant children is not an area in which Wales, Scotland or Northern Ireland have the competence to legislate and their consent is therefore not required for the UK Government to legislate in this area. The Government have been clear that they hope that the arrangements will remain voluntary and have been liaising with the devolved Administrations to see how this might extend to Wales, Scotland and Northern Ireland, but we must avoid the repetition of the situation we saw in Kent in the summer, so we will enforce dispersal if necessary to promote and safeguard the welfare of children. The regulations in Clause 43 are subject to the affirmative resolution procedure, so they will be scrutinised by Parliament before they come into law.
I will write to the Constitution Committee shortly to respond to its helpful report in more detail. Further, the Government propose to publish the text of the licensing regulations to extend the measure to Scotland and Northern Ireland before Report. We are unable to produce regulations immediately on residential tenancies because we are working out how this will interplay with the Private Housing (Tenancies) (Scotland) Bill currently making its way through the Scottish Parliament. On the final measure in respect of children, discussions continue with the devolved Administrations.
I hope that in the light of these reassurances and the commitments I have made this evening the noble Lord will feel able to withdraw his amendment at this stage.
Amendment 72A withdrawn.
Clause 10 agreed.
House adjourned at 10.07 pm.