An MP has told Parliament of another “scandal” which is affecting workers in his constituency.
Andy Sawford, MP for Corby and East Northamptonshire, said in an opposition day debate on Wednesday, January 15, that local agencies were selling on personal accident insurance to workers.
He told the Commons: “My constituency is plagued by problems, particularly in connection with employment agencies that treat many workers unfairly and make unfair deductions from pay – for example, transport costs, unlawfully charging for personal protective equipment and making workers pay a payroll company just to get their own very low pay – and those deductions take people below the minimum wage.
“The latest scandal involves local agencies charging workers £2.50 a week for personal accident insurance, which they buy for pennies and then sell on at a profit to the worker, when of course the worker is already protected by the employer’s liability insurance. It is another way of bringing down the employer’s premium and scamming the workers.”
Mr Sawford acknowledged that the Government was “moving in the right direction” in dealing with rogue employment agencies and said he was grateful to former business minister Jo Swinson for arranging for HMRC and the Employment Agencies Standards Inspectorate to come to Corby last year. He said fines should be imposed on those agencies which owed workers money and which breached minimum wage law.
And he said he wanted companies and agencies to sign up to the employment agency charter launched in Corby, adding: “Some of the best agencies have worked with us because they are proud of their practice.”
The Labour-led debate called on the Government to encourage employers to pay a living wage and to take action to restore the value of the minimum wage.
Chancellor George Osborne yesterday (Thursday) announced he wanted to see an above-inflation rise in the minimum wage for over-21s from £6.31 to £7. The living wage, set independently, is what is calculated to take into account the basic cost of living, is currently £7.65 an hour.