The law will also make it illegal for businesses to employ workers through unlicensed gangmasters.
Up to 600,000 workers will be protected from exploitation by rogue employers with the introduction of gangmaster licensing, the Department of Environment, Food and Rural Affairs (Defra) stated yesterday in announcing the new regulatory requirement.
Gangmasters who supply permanent, temporary and contract labour to other businesses in agriculture, horticulture and the whole of the food packaging and processing industry are included under the legislation.
Defra minister Jim Knight said the legislation will help protect workers involved in picking, processing, preparing or packing produce if they are supplied by gangmasters.
Licences will not be needed by those supplying labour to retailers, caterers or wholesalers. Also excluded are the short-term loans of workers between farms, the supply of individual specialist farm workers and the supply of labour to process non-farm products that include an agricultural component, such as cosmetics.
"Of course, many gangmasters run safe and legitimate businesses but it's imperative that we do everything we can to weed out the rogues among them," he said in announcing the rule.
The system will be administered by the Gangmaster Licensing Authority. An appeals procedure will be established for gangmasters who are refused a licence or who have their licence withdrawn.
Knight expects that it will become an offence for gangmasters to operate without a licence from 1 October and that it will become an offence for industry to use an unlicensed gangmaster from 1 December.
The Gangmasters Licensing Authority has also set out the conditions attached to a licence and the fees.
Knight said Defra will review the system after one year to ensure it is working effectively.
"We are especially keen to ensure it doesn't become an excessive burden for small businesses," he stated.
The application process will begin on 6 April. Licensing will start in the shellfish gathering sector on 1 October. The labour provider and labour user offences will be introduced in April 2007, Knight stated.
The Ethical Trading Initiative (ETI) was one of the lobby groups campaigning to bring gangmasters under regulation. The push came after the tragedy at Morecambe Bay on 5 February 2004, when 23 Chinese migrant workers drowned picking cockles.
"The government's announcement is exactly what the food industry wanted -- a levely playing field across the entire sector, with licesining applying to businesses that supply an estimated 600,000 workers to the sectors," stated ETI director Dan Rees. "Licensing imposes new checks on employers to verify that workers are employed legally, for example, paid the minimum wage, work reasonable hours and in safe conditions."
How is the gangmaster licensing going to affect the food processing industry?
Victoria Brown, a spokesperson for the Food and Drink Federation, said the processing industry welcomes the licensing system.
"The industry uses outside labour to support the seasonal fluctuations in our production," she stated. "We always work with licensed legitimate suppliers of labour and we will continue to do so."