EMPLOYMENT AGENCIES (REGULATION) BILL

HC Deb 24 June 1966 vol 730 cc1140-80

Order for Second Reading read.

12.55 p.m.

Mr. Hugh Jenkins (Putney)

I beg to move, That the Bill be now read a Second time.

The purpose of this Bill is to make it necessary for employment agents to be licensed. The House will be aware that employment agents perform a function, which in many spheres of employment is a useful and necessary function, in bringing together those who are seeking work and those who are seeking employees. The function of the employment agent varies considerably in various spheres of work. Perhaps where the employment agent is best known is in the sphere of office employment and also in the world of entertainment, theatrical, films, television and so on, but there are other aspects of employment as I have found in pursuing this matter in which some people feel it would be very advantageous if the legislation on the subject, which is very tenuous, were given greater substance.

The purpose of the Bill is also to enable the Minister of Labour to issue regulations to ensure that employment agencies are conducted properly and fairly. In short, it is to see that the business practices of the best employment agents become the standard for all. The lack of legislation of the sort we are proposing has led to the establishment of practices in some areas of this work which are not desirable. The employment agency makes no product and does not render a standard service which is easily measurable. Therefore, it is prone to the possibility of abuse. What is surprising is that though it is very largely unregulated and some abuses have arisen, they are the exception and have not become the rule. This Bill seeks to ensure that they never become the rule.

Many countries have already introduced legislation of the kind we are proposing. The Minister of Labour, in a Written Answer to a Question on 1st February this year, told us that 28 countries had ratified the convention of the International Labour Organisation on the subject. Some of those countries have decided to abolish employment agencies, but it is not the purpose or the intention of this Measure that that should be done. In this country we regard the employment agency as being established and we do not regard the abolition—at least I speak for myself, I do not regard the abolition—of the employment agent as being at all desirable or possible in the circumstances of our country.

Among the countries which have introduced legislation of one sort or another are the Federal Republic of Germany, France, Italy, Norway, Sweden, Israel and Turkey. From this short list it is clear that countries of very different kinds have found that this sphere of enterprise is one which needs to be brought within the orbit of legislation of one kind or another. The view is taken in those countries which do not permit what is called the fee-charging employment agency to operate, that the making of an engagement to employ is not a transaction in respect of which a third party should make a charge. Be that as it may, the view taken in this Bill is that these agencies are firmly established and that what we want to do is not to abolish them but to make sure that they work to the advantage of employers and of employees and not to their detriment. That is the object of the Bill.

Some of the countries to which I have referred have so framed their legislation on this subject as to enable them to ratify the Convention of the International Labour Office. An earlier Bill specifically sought to secure that this country did so. The present Measure does not seek that. Both sides of the House have declared their intention to introduce such legislation. In 1951 the Labour Government announced their intention to introduce legislation. In 1957 the Conservative Government not only announced that intention but published a short summary of the type of legislation they envisaged. There are considerable similarities between the Bill and announcements made by both Labour and Conservative Governments in the past. The name of the hon. Member for Orpington (Mr. Lubbock) among the sponsors of the Bill indicates that the Liberal Party is in favour of the Motion.

I believe that the Bill would enable the Government to ratify the Convention of the International Labour Office if they wished to carry out the expressed intention of their predecessors and, indeed, of themselves. I hope that they will decide to do so because, as we are members of the International Labour Organisation, it is desirable that wherever we can reasonably do so we should ratify the Conventions of that body. However, this would be entirely a matter for the Government after the legislation has been carried successfully through all its stages in both Houses, as I hope that it will be.

I am particularly pleased to have secured all-party support for the Measure. I express my appreciation of the interest and help I have received from the hon. Members for Plymouth, Devonport (Dame Joan Vickers) and Orpington and from my hon. Friend the Member for Watford (Mr. Raphael Tuck), who in the previous Parliament introduced a Measure which was an improvement on an earlier Measure. The Bill is the third attempt by private Members to promote legistion of this subject.

The Bill takes account, not only of the previous Measures, but also of the discussions which the hon. Members to whom I have referred have had with representatives of employers and of agents. The Bill has been modified to take account of those discussions. I am also very glad to have secured the support of the Government. I am conscious of the many imperfections of the Measure as it stands, in spite of the improvements which have already been made in it. A Bill drafted by private Members and which attempts to deal, almost for the first time, with so complex a subject must obviously have shortcomings which it will be necessary to correct in Committee. I hope that the House will decide to give us the opportunity to make these improvements in Committee. I take this opportunity of paying tribute to the great help which I and other hon. Members have received from the officers of the Public Bill Office, not only on this Bill but on its predecessors. They have helped us freely and readily, often working in their own time.

The Bill will make it necessary for all employment agents to be licensed. They will have to say what scale of fees they propose to charge. They will also have to provide other reasonable details required by the Minister of Labour, who will have the power to issue regulations subject to the approval of Parliament.

This is one of the matters we shall have to consider, if the Bill goes to Committee. As the Bill is to be supported by the Government, it may be desirable to spell out in it some of the matters which we have thought appropriate to be dealt with by regulation. This is a matter on which hon. Members may wish to make observations. If it is felt that some of the subjects which it is declared should be the subject of regulation would be better spelled out in the Bill, I personally can see no objection to that.

Among the other provisions of the Bill is one which would prevent excessive or unreasonable fees from being charged. This would operate whether such fees were charged to an employee or an employer. The nature of the employment agent's activity differs from one type of employment to another. In the world of entertainment, the employment agent acts, or should act, for the employee; he receives his remuneration by charging a commission on the employee's salary. In other types of employment—for example in office employment, where there is a shortage of labour—the employment agent acts as an intermediary between employer and employee and charges his remuneration to the employer.

This difference will commend itself to the House as a reason why legislation, control, and registration, are needed. The operations of employment agents are so varied in their approach that in one type of employment where a large number of people are seeking relatively few vacancies the agent charges the employee, whereas in another type of employment where there is a relatively small number of employees and plentiful employment the agent acts almost on behalf of the employer and certainly charges the employer for his services. It is a fairly good rule that he who pays is the one who receives, or who should receive, the service.

This clearly illustrates the difficulty that there is in laying down rules of general application to the detail of all spheres of this work. Even if in Committee we broaden the Bill to cover some of the points, it will still be necessary under the Bill to issue separate sorts of regulations to deal with the different types of employment agent who exist in practice. This point has been made by some representatives of employment agents. I take the point. I can well understand that regulations which would be applicable to agents dealing with office staff would be quite inapplicable to agents working in other spheres. The sphere of music, for example, where contract employment, about which I shall have to say something later, is quite a strongly established practice, would need a quite separate approach. Whether this should be the subject of a Clause in the Bill or the subject of a separate series of regulations is a matter which we might reasonably discuss in detail in Committee.

Mr. Brian O'Malley (Rotherham)

Before my hon. Friend passes from the point of the differing practices concerning who pays the commission—the employee or the employer—may I ask him if he has considered whether it might be useful, reasonable or practicable for this Bill to include a Clause which might change existing situations? Where, for example, at the moment the employee pays the whole of the commission, perhaps it might be not unreasonable that in certain circumstances at least a proportion of that commission should be paid by the employer, and perhaps this House might consider it reasonable to legislate on that subject.

Mr. Jenkins

I have some little doubt about that, because it seems to me that what we would require to do in the first instance would be to draft Clauses which would lay down general principles and which, within those general principles, would give the Minister power to issue specific regulations. I should have thought it was hardly suitable for the Bill to attempt to change existing detailed situations.

What I think we should seek to do is to see what are the best practices which operate in the various spheres of this work, and if we discover that those best practices are not working in any antisocial way, to confirm those practices, and then, at a later stage, perhaps, as the subject of regulation, if the Minister found it necessary to do so, seek to improve practices which it was felt were operating unfairly on either side.

Mr. O'Malley

I am grateful to my hon. Friend for allowing me to intervene again. Is he, therefore, saying that in the Bill as drafted the Ministry would at some time in the future, if it so wished, have the power to issue regulations to do the kind of thing which I suggested previously.

Mr. Jenkins

Yes, certainly. That is within the terms of the Bill. The Minister would keep and maintain a central register and he would keep statistical and other information. I think this point may require some attention in Committee.

There is in the Bill already provision for appeal against any decision of the licensing authority, but what we may need to spell out a little more clearly on further consideration is the question of the division of responsibility between the Ministry on the one hand and the licensing authority on the other. In the Bill it is envisaged that the authority actually issuing the licence should be the county authority—the Greater London Council, the county councils in England, and the county burghs in Scotland. But it is absolutely clear that the Ministry itself would need to be the body which issued the regulations and which gathered together the statistical material which the Minister would need in order to establish the facts for any future action. The exact line of division between those two sets of responsibilities might need discussion in Committee.

Among the regulations which, as at present provided, the Minister would be required to issue—as I have said it is conceivable that some of these regulations might appear at a later stage as Clauses; I do not know—is the provision that an agent may only charge commission to an employee when he is acting solely on behalf of the employee and not in any other or dual capacity. It might seem at first glance that this is obvious and hardly needs spelling out. But in practice one knows of spheres of work—I know personally from my own experience in the world of entertainment—in which the rôle of the agent has become blurred and although his remuneration is paid by the employee, the actor or other performer, it is not always clear that he is acting in the sole interests of the employee. I am sure the House will agree that he who pays the piper should, in fact, call the tune.

The Bill also provides that if the employment agent has other interests he may not have regard to these other interests but must have regard only to the interests of the client. This might be interpreted quite widely. If other interests were such that they were in no way against the interests of the client, no harm would be done. But it is the object of this Clause to make sure that the agent shall work for the client who is paying him, whether that client be employer or employee. He may not charge commission if he is the employer himself.

Circumstances may arise, as they do sometimes—it is an increasing tendency, if I may refer once more to the world of entertainment which I know best— where the line between employer and agent has become blurred. The Bill provides that if the agent is himself the employer or has an interest in the employment concerned, he may not in those circumstances charge commission. The House will note that it is not said that he may not act as agent. It is, however, provided that he may not charge commission when he is himself either the employer or is connected with or has an interest in the employment. As I have said, the line between employer and agent has become obscure in recent years to the disadvantage of the professional performer and, I think perhaps indirectly, to the disadvantage of the public.

There are provisions in the Bill governing work abroad and recruitment overseas. One hears of British dancers working in foreign countries where protection is very necessary before they start to make sure that the conditions of work are decent and right. One thinks, on the other hand, of the recruitment overseas of au pair girls, and one wants equally to make sure that so far as it is within one's power to do so, not only are the conditions of our own people working in other countries satisfactory, but also that the opposite applies and the conditions of people coming from abroad to work in this country are equally protected. The Minister would have power to issue regulations to that effect.

In Committee, if the House decides that we shall reach that stage, it will be necessary to consider whether any special provisions are necessary to cover the growing practice of contract labour. The practice of contract labour is growing in more than one sphere. It is becoming increasingly the case in office work, for example, for girls, instead of being found permanent employment, to become as it were members of a team which is employed by the employment agent, and for this team to be the subject of temporary employment by employers who are unable to find permanent staff. The suggestion has been made that this shortage of office employees is artificially created by the employment agents themselves. I do not entirely share this view. I do, however, think that it is not unreasonable to suppose that, where a shortage exists, that shortage might be aggravated, to say the least of it, if, as I think is the case, it proves to an employment agent to be more profitable to operate in the sphere of temporary employment rather than in the sphere of permanent employment. This is an aspect of the matter which needs watching.

There is also the development of contract labour in building and contracting. It has been suggested that the Selective Employment Tax may have an impact here and encourage the use of contract labour as a means for the employer to excuse himself from paying the tax. If so, the need for this Bill now, so that the matter can be subject to proper review to prevent abuse, is emphasised. Whether or not it was right for us to have waited so long for this Bill to be introduced, it is plainly right to wait no longer. From many points of view, it is well for the House to pass it now.

Mr. John Page (Harrow, West)

I have been following the hon. Gentleman's speech carefully. Clause 5 deals with different regulations for different classes. Does the hon. Gentleman suggest specific categories of employment into which he thinks the work of employment agencies should be divided?

Mr. Jenkins

I am much obliged for that intervention, which enables me to explain that the object is, either in the Bill itself—as now seems better—or by regulations issued under it, not to make divisions into categories but to recognise existing specific categories. I suggest, for example, recognition of the category of agents interested in office employment, the theatrical agent, and so on. Within those broad categories, one might wish to distinguish separate sub-categories. If one wished to do that, it would be sufficient to do it by regulation. For example, one might wish to distinguish between the sole agent in the entertainment world, the agent who acts for an actor in all circumstances, having a long-term contract with him, and the other type of agent who acts in respect of a single engagement. In office employment, it will be desirable to distinguish contract employment as a separate category.

Mr. O'Malley

If I may go back for a moment—I am a little behind because I have just been sent some literature on the subject we are discussing and I have been reading it—I want my hon. Friend to answer a question on what he said about recognising existing broad categories. He mentioned theatrical agents as an example. As I understood him, he assumes that under that generic heading one would include the very large number of agencies which have sprung up in recent years which, to my knowledge, have little connection with the theatre but are concerned almost exclusively with the provision of "pop" and "beat" group music. Perhaps this type of agency should not be included within that broad category of theatrical employment agents.

Mr. Jenkins

I was unable to agree entirely with the point which my hon. Friend raised earlier, and I cannot entirely accept what he says now. It seems to me that one must distinguish between agents operating in an entirely separate sphere, for example, in contract employment in building construction, in office employment and in the world of entertainment. Those are three broad categories separate from one another. But within those three broad categories there are sub-divisions, and I suggest that the purpose my hon. Friend seeks could be served better by the issue of regulations recognising these as categories within a category rather than by any attempt to pull them out as separate categories so defined. However, this seems very much a Committee question.

The Bill provides for the safeguarding of employees' money by making it necessary that such moneys are paid into a separate client account. This is most necessary, for the practice of making payment to agents is growing, particularly in the entertainment world. The recent ruling by the Director of Public Prosecutions that such moneys are at present not secured in any way makes this provision particularly urgent. Money is being lost when agents default—this does happen occasionally, as in any business— and the ruling that, when an agency defaults, it is perfectly proper for money received by the agent to be lost in the general work of the agency makes the creation of a separate client account a matter of the utmost urgency. Sometimes, quite substantial sums of money are lost by people in the entertainment world, through no fault of their own.

This Bill is long overdue. Legislation on the matter has become more and more necessary each year since 1951 when it was first decided to introduce it. It will be welcome not only by all employees and employers but by the best agents, who recognise that, while there is no effective legislation—for the byelaws are largely ineffective, and they are non-existent in most parts of the country—and while there are no established and generally applicable standards, the rules and regulations which the more responsible agents draw up for themselves are ineffective. A sort of Gresham's Law operates and the bad reputation and practices of the most irresponsible agents smear, quite often unjustly, the reputation of firms which carry on their business usefully, properly and honourably.

Today, practically anyone may become an employment agent. There are many instances in which no proper services are rendered for fees charged and in which the fees themselves are fantastically excessive. There are many instances of fees being charged to an employee for services rendered to his employers. One example is that the B.B.C. employs an agent to engage crowd artistes on condition that he draws his remuneration not from the Corporation but from the unfortunate extras, thereby reducing their fees below the low minima which apply to these engagements. I mention the Corporation to show what can happen without legislation in an area of the highest probity. It will give the House an idea of what can go on in the "pop" world where some very odd people are now operating.

Here is another example in an area in which one would not have thought that anything not generally accepted as right and proper would occur. This is a case in which the Sadler's Wells Opera went to Australia. An agent was asked by an Australian management to negotiate the deal, which was to take place in the leave enjoyed by the singers, who had the opportunity of going to Australia to earn some money by a short engagement during their holiday time. Acting on behalf of the Australian employer, the agent arranged the deal, but he said, "Although I am acting as an agent of your employer, I want you to understand that there is 10 per cent. in it for me". They replied, "Do you mean 10 per cent. of one week's salary?" and he replied, "No, 10 per cent. for every week that you are in Australia". He had written into the contract a clause which secured for him 10 per cent. of the entire salary bill of the entire company for the whole of the tour in Australia. That actually happened. It is only an example of what can go on elsewhere. It is surprisingly widespread.

I think that I have said enough to suggest that from many points of view— not only because of the various abuses which can take place but from a more general and widespread point of view— this legislation is urgent. I hope that the House will agree that it is a necessary, urgent and useful piece of legislation and will send it on its way to Committee. If it becomes law it will give a number of important protections not only to employees but also to employers and, not least, to reputable employment agencies. I hope that the Bill will commend itself to the House.

1.33 p.m.

Dame Joan Vickers (Plymouth, Devonport)

First, I should like to congratulate the hon. Member for Putney (Mr. Hugh Jenkins) on his good fortune in the Ballot and on his clevefness in managing to bring his Bill forward today. He was very wily, if I may put it that way, in finding out that some of the people who came before him could have chosen today, and I congratulate him— double congratulations—on being clever enough to step in. He has been very keen on this type of legislation for a long time.

I also congratulate him on his good fortune in having the Minister of Labour here. It is very good of the Minister to come here today especially as he has had an extremely strenuous week and as he had a very strenuous debate yesterday. It must be gratifying to the hon. Member for Putney that so much interest is taken in the Bill.

I have given the Bill my support. Although the hon. Member is right in saying that it has had support in previous years, even going back to 1956, and that the Conservative Party made appropriate noises and said that they would introduce a Bill, eventually they said that time did not permit them to do so. From various Questions which we have seen, I assume that the Bill has the support of both major political parties—and of the Liberal Party in view of the fact that the hon. Member for Orpington (Mr. Lubbock) has signed the Bill. The hon. Member for Putney also has the majority backing of the Federation of Employment Agencies and the backing of the Confederation of British Industry. With this form of support, I hope that he will get the Bill on to the Statute Book. I am grateful to him for the consideration which he has given to one or two points which I raised previously, but I hope that he will think about one or two other points which I want to raise today.

Employment agencies have undertaken a very valuable task for over 300 years. They were started in times when employment was not as easy to find as it is today. They have assisted in ensuring the universal right to work and a free choice of employment. That follows the United Nations Charter, which says that everyone has the right to work, the right to free choice of employment, the right to just and favourable conditions of work and the right to protection against underemployment. Even before we had employment exchanges, these agencies existed, and they have given very good service.

It should be recognised, as I am sure it is recognised by the hon. Member for Putney, that nowadays they employ a great many skilled men and women who understand their job, who understand personnel management and know how to fit the right person into the right job. He has mentioned—which is natural, because he wants to stress the need for the Bill—some of the bad examples, but I am sure that he agrees with me that these are in the minority and that, although we need this legislation, a large number of these people carry on their work very well. This is shown by the fact that the majority of the employment agencies would welcome the Bill. In fact, they would welcome nation-wide licensing and control of the conduct of private agencies.

They take this view because they are interested in the dignity of their job, most of them are proud of their profession and they want to see only people of good character entering the profession —which I am sure we all agree is very desirable. I understand that eventually they want entry into this type of profession to be by qualification and they want it accepted as a profession.

It is hoped that when the Bill goes through we shall get away from the old impression of these agencies. I regret to say that many ill-informed people still consider that agencies are run by ancient spinsters in drab back offices. When one looks at how they conduct themselves, one sees that these agencies have a very good code of conduct which includes advertising, the placing of permanent clerical staff and of temporary staff and placing overseas, as well as the work which the agencies are doing for au pair girls.

As the Minister of Labour is here, may I tell him how sorry I am that we still cannot get any legislation from the Home Office or his Ministry to check on au pair girls. I should like to draw his attention to a letter written to The Times by Mrs. J. M. Fletcher. One of the fears about the Selective Employment Tax is that people will no longer employ the domestic servant, on whom they will have to pay tax, but will take an au pair girl as full-time domestic help and in this way will not have to pay tax. This would be very bad. Reading from Mrs. Fletcher's letter I see that local authorities in areas where licensing of employment agencies exist hold the view that au pair is employment, and if licensing of such agencies were extended throughout the country it would be difficult to hold a contrary view. This would be very helpful in controlling the question of au pair girls which, with about 15,000 of them in this country at the moment, is becoming unmanageable. They need protection—and they have it in other countries where they can go to work only if they receive a permit or permission from the Minister of Labour.

May I refer to the question of fees? I understand that subsection (3,e) is not acceptable to the agencies because they feel that it is not very workable. It will be difficult to decide what is "excessive or unreasonable "in view of the nature of the services provided and I hope that the hon. Member for Putney will reconsider this subsection, which I gather would be extremely difficult to work.

Mr. O'Malley

Is the hon. Lady therefore suggesting that there should be no regulation in the Bill and no power in the Bill governing the amount of commission or of fees which such agencies are to charge? I draw her attention to Clause 1(8) in which we are told that Any person aggrieved by a refusal to grant or renew a licence or by a decision to revoke a licence on the grounds that the fees proposed to be charged by the agency are excessive may appeal". I should have thought that if an employment agency had a solid case to be put forward in such circumstances it could be dealt with in this way.

Dame Joan Vickers

I thank the hon. Gentleman for his intervention, but I do not agree. I was just coming on to the next pcint, which I have already raised with the hon. Member for Putney and which arises from the wording in Clause 1(3): Provided that the scale of such fees or commission shall not exceed those determined by the Minister", I believe that this would lead to abuse. It has already done so in America. I quote from what an expert says on the subject: Firstly, it seeks to control the fees charged by employment agencies. This we consider to be a thoroughly wrong principle which could only have the effect of lessening competiton between agencies". Bristol, for example, has 26 agencies. If a maximum fee is fixed it has been found, particularly in America, that people always charge the maximum. That is the danger. One fears that, if there is a maximum it will increase the fees all over the country. If there is to be a maximum the charges in London will be very different from those in Plymouth, because in Plymouth the agency would not need to charge as much because rates of pay are less than in London.

I would rather that there was no fixing of a maximum by the Minister in the light of what has happened in the United States where the agencies charge maximum fees on practically all occasions. It would be very difficult to appeal to the Minister if agencies were able to charge the maximum all the time. I would like to see a provision that the agencies must put up a notice saying what fees shall be charged so that any person can see what the fees are. This would be a better way of protecting the individual.

Clause 3(1,f) reads: regulate the fees to be charged by such agencies to employees (and may regulate fees to be charged to employers); Surely this comes under the same category as the one I have just described. I would rather the Minister did not regulate the fees to be charged. Clause 3(1,j) says: provide that an agent shall not falsely state that he is unable to supply permanent staff … This is also quite unworkable. I do not see how one can judge. It will only be one person's word against another's. Furthermore, in my experience, temporary staff are usually people who can only work in a temporary capacity. Very few of them can work full-time. This is particularly so in the secretarial and domestic sections, in which most of those working are married women who cannot work full-time. I would prefer that these were not included.

I gather that when supplying temporary staff agencies are acting as staff contractors and not as employment agencies. Under the present system of licensing authorities in England controlling the activities of agencies, the authorities have no right to control the staff of contractors supplying temporary staff. In the countries mentioned by the hon. Member for Putney as having done away with fee-paying agencies—I understand in Europe— the staff contracting services supplying staff have been allowed still to continue. I would, therefore, like this point considered also. In this case, the employer is the agency and the agency supplies the staff and pays the wages and National Insurance contributions and so on.

There is in Clause 4 what appears to be a misprint—or perhaps I have misunderstood. Clause 4(c) says: … to notify the relevant licensing authority of the intention to place in employment any person under the age of 30 years; Surely the age of 30 is a little old in this context. I wonder whether this is a misprint or whether there is some reason.

I do not intend to say anything more now because I have discussed the Bill with the hon. Gentleman and I am in agreement with the rest of the points he has put forward. I know that had we signed the full International Labour Office Convention this might have meant the abolition of all fee-paying agencies. One reason for my support of the Bill is that although we have been able to sign certain sections, if the Bill goes through we shall not be able to sign the entire Covention. I am not anxious to see fee-paying agencies done away with. I hope that the House will give the Bill a Second Reading and that it will return from Committee improved so that we shall all be able to give it our full support.

1.46 p.m.

The Minister of Labour (Mr. R. J. Cunter)

Perhaps it would be convenient to indicate at this stage the attitude of the Government. I thank the hon. Lady the Member for Plymouth, Devonport (Dame Joan Vickers) for her kind remarks to me. My duty and pleasure is to congratulate my hon. Friend the Member for Putney (Mr. Hugh Jenkins). We all know that he has been most assiduous in his efforts to promote the Bill since he entered the House. Indeed, within my memory his interest in the subject goes back to long before he became an M.P. I have some reservations about certain points in the Bill which we can discuss later but I congratulate my hon. Friend not only on his tenacity and moderation in commending the Bill to the House but I welcome the Measure for itself.

The activities of employment agencies have engaged my attention a great deal over the last few months both inside and outside this House. As a result of my discussions and consultations with interested bodies, I have concluded that the time has come for some measure of registration and control of employment agencies.

The first thing that strikes the enquirer who would know something about employment agencies is the diversity of their activities and their proliferation in recent years. I estimate that there are in all more than 3,000 employment agencies and branches in Britain. Most of them operate in England and a large proportion are to be found in Greater London. Nevertheless they are opening in increasing numbers in many of our major cities and it is apparent to me that if the situation continues, as it may well do, we shall see many more opening in the coming months and years.

My hon. Friend mentioned that the largest single group consists of theatrical agencies, with which he is particularly concerned. Close behind this type are the clerical and mixed agencies. Employment agencies vary considerably in size, from the largest, which has about 50 branches throughout the United Kingdom to small theatrical agencies which seem to be one-man organisations. By far the greatest increase in the number of agencies is in London, the South-East and on the fringes of London. For example, in the London postal area, 204 private agencies were listed in the classified telephone directory in 1952 compared with 689 at the present time. I also have evidence of a rapid growth in the Eastern and Southern regions and in the Midlands. In terms of the volume of business, commerce offers the greatest potential for the private agency. Many agencies not only act as a point of contact for the employer looking for labour and the employee looking for work, but in these days hire out temporary office staff. The Employment Agents Federation estimates that some 70 per cent. of all clerical agencies are engaged in this activity.

If the activities of the agencies are diverse, so are their methods and scales of charges. Generally, however, the theatrical agencies are the only agencies which charge the employee from whom, it appears, they expect a commission of between 5 and 15 per cent. of his fees. All other agencies at this time of labour shortage charge the employer, and currently their fees vary from 1 to 2 weeks' wages to a certain percentage, usually about 5 per cent., of the employee's annual salary. That figure may rise considerably when it comes to managerial or senior staff.

Over recent years, my Ministry has received many complaints about the activities of agencies, mainly in the form of letters from employers. The main burden of the complaints is that the employment agencies are pushing up costs by encouraging excessive turnover and, of course, by bidding up wages. There are also complaints about the lack of preselection when applicants are sent from the agency and also about the practice of some agencies, no doubt the less reputable, in approaching those whom they have placed after a short period to go to another job.

There is also the situation in which agencies employ workers themselves, but hire them out for short periods as holiday reliefs or to cover emergencies. This, of course, inevitably causes unrest among existing staff, because these workers receive higher rates of pay than the employers' own staffs.

Those are the complaints, but in fairness I should say that the Confederation of British Industry in its talks with me took the view that inquiries made of its members showed that the difficulties caused by the agencies were isolated and not sufficiently widespread in themselves to justify legislation. They feel that the employment agencies provide facilities which my own employment service cannot provide. They argue that competition is a healthy influence. This is a viewpoint to which we must pay attention. It is mainly directed, however, against the proposal that agencies should be abolished, which is not in our minds, and, secondly, against the proposition that power should be taken to regulate their working.

On the whole, complaints from employees are less numerous except about theatrical agencies. The main burden of the grievance about theatrical agencies is that the fees charged have risen very steeply indeed and that employers also act as agents, as my hon. Friend said, so as to deduct a percentage of the artist's salary and that employers who have agency licences insist that the artist's agent must share his commission, failing which the artist loses the job. As my hon. Friend said, some television companies make their payments to the agents rather than to the artists, thus causing the latter to suffer delay before receiving their fees.

With general agencies, the complaints generally seem to relate to bad premises and reception arrangements, undertakings in connection with jobs which are not kept, and failure to vet domestic vacancies before offering them to the applicants who go to the agencies. About many of these complaints we have already heard and we know quite a lot about them.

Such regulation as at present exists is very patchy and directed on the whole to preventing the use of agencies for immoral purposes, or the use of unhealthy premises. There are some 200 local authorities in England and Wales who have taken power to register domestic agencies under the Public Health Act, 1907, but in Scotland only Edinburgh, Glasgow and Inverness have taken power to control agencies, domestic or otherwise, by local legislation, and of those Inverness has not yet used this power. As for the general run of commercial agencies, a number of local authorities have obtained local Act powers to license them, but these powers are now used only in Greater London, Berkshire, Essex, Hertfordshire and Surrey and 14 boroughs. The theatrical agencies are regulated by local authority byelaws which normally make special provision for safeguarding the employment of women who are sent abroad. There is no regulation whatever of business consultants, or nonprofit-making agencies, such as trade unions, the professional bodies, or university appointments boards.

The sum total of all this is that we have only very patchy information about the activities and numbers of employment agencies and that there is no general regulation of any kind in the United Kingdom. Since October of last year, my Ministry has been engaged in a large-scale inquiry in which it has had the assistance not only of other Government Departments, but of the local authorities known to have taken power to control agencies and also members of my own National Joint Advisory Council.

The outcome of all these inquiries, which we have now carried as far as existing sources of knowledge permit, still leaves me in doubt about the real situation. I feel that with all the information which has been submitted by these bodies, there is still a large element about which we do not know enough. I find this a disquieting state of affairs. These agencies are dealing in human careers and human earning capacity. They are operating in a sector in which scarce manpower resources are under pressure and where conditions for the exploitation of this state of affairs are increasing. The economic impact of these operations may be considerable and in some aspects may be unhealthy. The case for further regulation therefore appears to me to rest on a number of considerations.

The hon. Lady the Member for Plymouth, Devonport mentioned the I.L.O. A convention was drawn up as long ago as 1959, but has not yet been ratified by this country. The convention offers Governments a choice—either to abolish fee-charging employment agencies conducted for profit and regulate others, or to regulate all fee-charging employment agencies. I feel that our failure to ratify this Convention may be raised at any time. It has not yet been raised but it could be, because the majority of other leading industrial countries have ratified. This is the first reason for taking some further measure of control.

Secondly, the proliferation of employment agencies and the numerous complaints that I have received suggest that there may be an economic loss, not only in the wasteful use of agency staff and additional costs for users, but also through the encouragement, by certain agencies—but I emphasise not all—of bidding up wages, thus causing excessive turnover and, in effect, exploiting labour shortages.

Thirdly, there is the disturbing lack of any recognised standard in the conduct of the agencies, particularly in respect of fees charged and the quality of the performance of the agency.

Fourthly, the present incompleteness of regulation means that while there are reasonable standards in some quarters, there is room for less reputable agencies to flourish without anyone doing anything about them. Both employer and employee should be protected from such a situation.

Finally, and this is the point which has been urged upon me by the Trades Union Congress, there exists a need for statistical and manpower information about the work of the agencies and the number of people passing through them, so that we can have some knowledge of the impact of their operations on manpower policy. These are the arguments which have led me to believe that there is a clear case for some further form of control of the employment agencies. I propose now to say briefly what form that control should, in my opinion, take.

First of all I believe that all employment agencies should be required to obtain a licence before they can begin or continue operations. The licence should be issued by a central authority, and before a licence can be obtained the central authority should be satisfied about the activities of the employment agency and it should have the power to require an agency to supply information about its activities. For example the agencies should be asked to give the numbers and the types of staff employed; the numbers and types of staff whom they have available for hire to employers on a temporary basis, the details of fees charged, and whether they are charged to employer or employee; the types of occupations in which they deal; any limitation on categories of employers or employees whom they will accept as clients and details of their premises.

I also believe that agencies should, for the purposes which I have outlined, be asked to supply details of the numbers and the types of vacancies which they have accepted during the preceding 12 months; the numbers and types of vacancies which they have filled in the same period and the numbers, by types, of clients they have registered. Only in this way will we be able to get a comprehensive picture of the manpower effects of what is going on in the employment world.

Because some agencies are already regulated in certain respects in parts of the country, any legislation applying to the whole of the country should enable the Minister of Labour to regulate the activities of agencies in certain particulars which he deems to be necessary. The sort of particulars that I have in mind will be evident, in view of what I have been saying—they include fees and charges, maintenance of books and registers, advertising, engagement of persons for employment abroad, engagements of children and young people and standards of premises and conduct upon those premises.

The Bill before us provides a framework for the sort of legislation that I have in mind.

The hon. Member for Putney has already admitted that it is by no means perfect in detail and there are many respects in which we may amend it as it progresses through its various stages. Nevertheless the outline is there and the hon. Member is to be congratulated in providing such a useful general framework.

This is not the time or place to examine the individual Clauses and paragraphs of the Bill. I have indicated briefly the information that I have about the activities of many employment agencies and I have explained why I think that it is necessary for us now to proceed with some more general form of regulation and control than is now in existence. I have explained the content of what I would hope to see in any finished piece of legislation on this subject, and I have said that the present Bill provides the outline and the framework for such legislation. I have said too that I hope to be able to amend the Bill in Committee stage. It only remains for me to commend this Bill to the House and to hope that it will be given a Second reading, which I think it deserves.

2.7 p.m.

Mr. John Page (Harrow, West)

I should like to congratulate the hon. Member for Putney (Mr. Hugh Jenkins) on his good fortune in being able to bring the Bill before the House today, to thank the Minister for being here, and to say that we are all glad to see him in a much happier state about this Bill than he was about the one which he had to introduce, as a stepfather, yesterday. This has been a good debate about a subject where there are some serious abuses, although there are a large number of excellent agencies which do a valuable job, both in placing mature people in employment and in the counselling of young people in their careers.

But there are some abuses, and we believe that the public is in need of some protection. We must be careful not to build up too great a new tower of paper and I was nervous when the hon. Gentleman mentioned the new statistical evidence which would be before the Minister so that he could take future action. We must not exaggerate the circumstances of employment agencies as being too important over the whole range of employment generally.

I believe that the Minister may shortly have to leave for an important engagement, and, in case he has to leave before I finish my speech, I should like him to know our views. We feel that providing employment is an important personal service and that it is important that the supervision of employment agencies should be as near as possible to the address of the agencies. In the same way as with child care and other personal services, the nearer the administration can be to the point of action the better it usually is.

I think that the Minister's suggestion was that the Ministry should issue the broad regulations on how employment agencies should be operated and should keep a register of those who wished to run or were running employment agencies, but that the licensing authority should be the local authority. We believe that it is important that the local authority should be the licensing authority and that in the Greater London area it would probably be a mistake at this stage to remove the responsibility for licensing from the Greater London boroughs and put it centrally into the hands of the Greater London Council. Each Greater London borough is large and sophisticated. It is probably wise that the licensing and supervision should be left to the boroughs.

Mr. Robert Maxwell (Buckingham)

Would the hon. Gentleman explain precisely his party's objection to a centralised register when it assists with manpower planning?

Mr. Page

We have no objection to a centralised register. What we wish to avoid is over-centralisation of administration and supervision. It seemed when the Minister was speaking that the amount of detail which the Ministry would require from people wishing to open an agency might take too much power from the local authority. That was the point which we wished to make.

I turn to Clause 1 and the fixing of fees. We support the view of my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) that it is almost an insuperable problem to try to fix maximum fees over the whole field —from a top "pop" group to a junior copy typist taking her first job. As my hon. Friend said, the scale of fees should be clearly advertised in the office. It might be right that before registering people should sign a document saying that the scale of fees has been shown to them. In this way there would be no misunderstanding about the fees chargeable.

The hon. Member for Putney did not say what licence fee he thought should be paid by people who wished to set up in business as an employment agency. We feel that, as far as possible, licensing and supervision should not be too great a burden on the ratepayer and taxpayer and that the supervision should be self-financing within the employment agencies. This is particularly important when one considers that about 75 per cent. of all the agencies in the Greater London area are centred in the one borough of Westminster. It seems a bit hard on the ratepayers of Wesminster that they should have to bear the whole cost of administration and supervision of such a large percentage.

Clause 2 deals with the establishment of the register by the Minister. I do not think that we need go further into that.

I was rather disappointed that the hon. Member for Putney, when he came to Clause 5, did not go more deeply into the different categories, as the Minister did. The great difficulty for the House is that the kind of regulations suitable for the theatrical and model world seem quite unsuitable for catering. We do not want to impose regulations over the whole field because they might be unsuitable in certain cases.

In Committee we shall have to ensure that differences are clearly stated in the keeping of books, and so on, as between one category and another. In the theatrical world, where the agent often receives the fees, it may be that the stringent regulations regarding clients' money are necessary. But it will be hard on the small employment agencies which may ask for a registration fee of £1 in respect of people who go to them for a job, which is returnable at a later stage if they find a job for them, if they have to keep the same kind of books as are kept for the payment possibly of many thousands of £s to an agent in connection with a theatrical engagement.

On Clause 8, who would proceed against an agency if there were thought to be abuses or malpractices? Would it be the licensing authority? Would it be the client? Would it be the employer? If the latter, would he have to act through the licensing authority? I felt that the emphasis throughout the speech of the hon. Member for Putney was on the theatrical side rather than on the commercial side and catering and domestic side. We hope that this orientation can be split up in Committee. We do not want the same regulations and paper work in respect of a junior copy typist as cover the engagement of an internationally known "pop" group, although there are probably more "rolling stones" in our offices than there are in the theatrical profession.

We believe that many improvements will have to be made in the Bill in Committee, but we hope that in the end it will become a useful and helpful Measure.

2.18 p.m.

Mr. Sydney Bidwell (Southall)

May I also congratulate my hon. Friend the Member for Putney (Mr. Hugh Jenkins) and wish him luck in getting his Bill through all its legislative stages so that he can finally have the honour of having introduced a worth-while Measure.

It was appropriate that my right hon. Friend the Minister of Labour should intervene when he did, because he was able to tell us at a quite important stage of the debate the exact size of the problem. I confess that I did not understand that it was as serious as it apparently is. I must also confess to having subscribed to the view that it would be best if employment agencies did not exist at all and if the employment exchanges handled all matters of employment exchange. One cannot, however, have the best of all worlds. One assumes that by far the overwhelming amount of agency work is handled by the Ministry itself.

To think philosophically for a moment of the general view of this side of the House, some think in terms of a similar ratio of both public and private enterprise in relation to economic activities as a whole, in which case the existing proportion of labour supply through agencies and through the Ministry would be just about the right kind of balance in the economy as a whole. That, of course, is something for which some of us on this side will have to work over a considerable period.

In his usual compelling and impelling way, my right hon. Friend the Minister said that the existing situation was disquieting. He has also observed that in the matter of acting as an agency for job supply and procurement, we are dealing with human lives. My right hon. Friend said that, as far as is known, there are 3,000 employment agencies throughout the country and that it is only proper that some kind of Ministry supervision of their activities should be required by this new legislation. We have heard also—and in my opinion this is of extreme importance—that in the view of the T.U.C., which must necessarily weigh heavily with a Labour Minister of Labour, this reform is long overdue.

When thinking of the activity of the agencies in relation to the kind of work about which my hon. Friend the Member for Putney is usually concerned, I suppose that that kind of work would not really be looked upon as labour supply. I imagine that, if private agencies did not exist in some form or another, there would be perhaps some kind of surreptitious intervention of a third party to pass, say, an actor into some sort of employment. We are dreaming if we think at this stage of cutting out private employment agencies altogether.

The Bill, which consists of only a few pages, does not overtax us in understanding what it is all about. It has been outlined fully for us by my hon. Friend the Member for Putney. One realises that in Committee additional bits and pieces must be inserted and quite a number taken out. I am, however, sure that the Bill will not only be welcomed by the House generally as a long overdue reform, but will be welcomed by the public at large. Therefore, I wish it all the best in the next stage of its proceedings.

2.23 p.m.

Mr. Robert Maxwell (Buckingham)

I too, welcome the Bill and congratulate my hon. Friend the Member for Putney (Mr. Hugh Jenkins) on having the good fortune to introduce it. The reasons why the Bill will be found to be useful and necessary have been amply and well explained, not only by my hon. Friend, but by my right hon. Friend the Minister and hon. Members on the benches opposite.

I rise to invite my right hon. Friend the Minister to consider the rather good fortune and benefit that could accrue to the nation from registering private employment agencies in the way proposed in the Bill by giving them a greater and better rôle, in co-operation with employment exchanges, in helping the nation in one of our major problems, namely, labour mobility and improving in particular our geographical and occupational labour mobility.

Selective labour market measures must facilitate adjustments in today's dynamic labour market by promoting geographical and occupational manpower mobility. This is at present, to the great harm of our economy, not being achieved as well as it should.

Our employment exchanges should, and could, do a great deal more to play a positive rôle in helping to bring about labour mobility. In co-operation with the private employment agencies, they should give greater assistance in adjusting the supply and demand in the labour market. The employment exchanges, together with the private employment agencies could, and should, play a more important rôle on our labour market policy.

Geographical mobility could be stimulated by providing detailed information about where work is to be found and by furnishing displaced workers and managers with financial assistance to compensate them for the extra expenses incurred in moving. The Government should find new ways and means of assisting the mobility of workpeople by giving financial grants and inducements even to people moving their jobs temporarily, and should remove their present stringent restrictions whereby assistance is offered only on rare occasions and is limited to people whose wages do not exceed £1,500 a year.

The Government's main policy on mobility, geographical and occupational, should continue to consist not only of moving the worker to the job, but also of trying to bring the job to the worker. The private employment agency could, and should, play an important rôle in this.

The Ministry of Labour should, in my view, start consultations now, while the Bill is going through Parliament, with the private employment agencies and discuss with them not only ways and means of how to deal with the kind of problems which my hon. Friend the Member for Putney wishes to be dealt with. I certainly agree that serious problems arise in devising administrative instructions relating to the hiring or employment of workers from different industries. Certainly, what applies to the machine minder would with difficulty apply to the part-time model.

In addition to putting those items right and having detailed discussions with the employment agencies on how the regulations might best be drafted in the interest both of those seeking employment, the employer and the agencies which make a profit out of their services, a by-product of discussions with the agencies could be to show how they might assist the Minister of Labour in fulfilling a better improvement in labour mobility. As the National Plan rightly stresses, one of our great shortages is manpower, and skilled manpower of all kinds.

The employment exchanges on their own, although they are doing a useful job, are not doing it as well as they should. Most certainly they could not do it alone. I therefore hope that my right hon. Friend the Minister of Labour will take this opportunity to discuss with the employment agencies and with his own officials the best ways and means of harnessing the energy, the talents, and the resources of the private employment agencies to work jointly with the employment exchanges to improve the utilisation of our labour resources. Private employment agencies are in touch with thousands of employers, and know the vacancies which need filling. Equally they are in touch with tens of thousands of employees who are looking for those jobs. This is one gap which could genuinely be filled, and I hope that my right hon. Friend will not miss this opportunity of filling it.

2.30 p.m.

Mr. Brian O'Malley (Rotherham)

I congratulate my hon. Friend the Member for Putney (Mr. Hugh Jenkins) both on the introduction of the Bill and the lucid and articulate way in which he presented it. I give it a very warm welcome. Before I came to the House I was engaged for many years in the musical profession, and I have vivid memories of debates and discussions, both at delegate conferences of the Musicians' Union and within individual branches and area organisations, concerning the difficulties in which musicians find themselves from time to time in respect of the provision of agency services and the types of agent they have to deal with.

It is worth bearing in mind that if the Bill goes through the House it will be possible for the Government to ratify Part III of the I.L.O. Convention, although not Part II. We should not allow this occasion to pass without noticing that the Convention under discussion was adopted by the I.L.O. as long ago as 1st July, 1949. The Government announced in July, 1951 that in due course they proposed to introduce legislation to enable the Convention to be ratified, but 17 years later we are still waiting to ratify even Part III, although I am convinced that the amount of abuse today is much greater than what it was even ten years ago.

This is not the occasion to discuss what the Government's policy should be on the ratification of Part II, although I suspect that some of my hon. Friends do not share the view expressed by the hon. Member for Plymouth, Devonport (Dame Joan Vickers). I do realise, however, that in some sections of employment employment agencies fulfil a function which labour exchanges do not.

I want to put a question to the Ministry of Labour concerning the provision of facilities for musicians. Unfortunately, there is no one from the Ministry on the Treasury Bench at the moment. I appreciate the reason why my right hon. Friend has had to leave, but perhaps the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, who is present, can pass on my question to my hon. Friend the Member for Luton (Mr. Howie) thereby giving one of our Whips some job to do this afternoon—or perhaps he can even pass it on direct to the Minister.

I understand that in at least one European country official Government labour exchange services are provided for musicians who are seeking work—

Mr. John Page

I have listened patiently to four hon. Members opposite talking about labour exchanges. They have been employment exchanges for so long that I felt I had to intervene. My patience was exhausted.

Mr. O'Malley

I hope that the hon. Member will realise that in return for my giving way to him he has attempted to bite my hand off because his patience was exhausted, but that he did not treat me in the same way when I tried to intervene in a friendly way in his speech. Nevertheless, I take his point. As I have said, in at least one European country services are provided by the Ministry of Labour for musicians, and also groups of musicians, who are looking for work. It is not only a service to individuals; it is an agency service, dealing with contractors.

I have no detailed information on this point, and if the Ministry of Labour has any information on practices of this kind in European countries I shall be most interested to hear it. I should also like to know whether the Ministry of Labour has ever given active consideration to the provision of such services here—at least in London, and perhaps also in our large provincial cities.

I may be wrong, but I have the impression that this matter was considered in the immediate pre-war period. Presumably it was dropped as a result of the war, and has never been revived. I should like some information on that point, and I particularly ask my right hon. Friend to give serious consideration to the possibility of providing services for musicians who are seeking employment.

I have had some experience of the entertainment and musical profession, and I know that there have always been unscrupulous operators who have described themselves as agents—shady, fly-by-night operators, acting in many ways as parasites on the body of the musical profession. I have one personal recollection of the operations of "agents" —and I deliberately refer to them in inverted commas. When I was in my teens the band for whom I was working took on a job involving quite a lot of money. The band leader was not able to get payment from the agent. Eventually the matter was settled in court, but there was little satisfaction for anyone at the end of the day. Fortunately, I was working for a band leader who paid the musicians, who were semi-professionals, at the end of the week, whether or not he was paid.

Among semi-professional dance band musicians it is not unusual for band leaders to have to wait for cheques to come from organisations for whom they have been playing, and when there is a long delay the musicians sometimes have to wait. I have known occasions—they did not affect me personally, but I came across them when I was a trade union branch secretary—of musicians not having been paid by their band leaders because those band leaders had difficulty in getting money from people who described themselves as agents.

The position has become much worse in recent years as a result of the changing pattern of demand in popular music. We have seen the development of the "beat" pop music industry, in which large numbers of young people are seeking employment for the first time. When I was a young musician—and in those days I played in conventional dance bands and not in the beat groups we know today —it was not usual for the band leader to go to an agency to seek work. I am informed that things are very different today and that "pop" groups—and I am not referring to the stars but the thousands of young people working in various parts of the country, sometimes for low fees—look for an agent to find them work as soon as they enter the entertainment business. In my younger days we were chary about using the facilities offered by some so-called agents and we preferred to find our own work.

Hon. Gentlemen opposite dislike the idea that my right hon. Friend the Minister should have power to regulate the maximum rates which employment agencies may charge. I admit at once that there are some good agents. I regard the services offered by the large agencies and many of the smaller, reputable ones, as being of great use. However, I am concentrating on the unscrupulous agents with whom I have had some experience. I assure hon. Gentlemen opposite, from the conversations I have had with people in the business, that many young people in "pop" and "beat" groups are today being charged more than the 15 per cent. which my right hon. Friend mentioned earlier as possibly being the top rate.

One hears accounts of unscrupulous agents making double bookings, cancellations at the last minute and unpaid bills. One also hears reports of agents who are also acting as contractors of labour, putting on functions and so on. My hon. Friend the Member for Putney spoke of the need to define the functions of an agent and manager. It is important that this should be done and it is also necessary to differentiate between different types of function.

I have also heard of cases where agents acting for "beat" and "pop" groups have owned not only the electronic equipment which is so necessary to groups of this kind but even the clothes the musicians wear. And it has not been a question of these young musicians paying the agent for this equipment by instalments. The agent merely takes a very large slice out of the earnings of the people he is supposedly managing.

Mr. Brian Walden (Birmingham, All Saints)

I hope that my hon. Friend will not leave this very important point of agents who are also acting as contractors of labour until the Committee stage. In view of his great knowledge of this subject, I hope that he will give us more information about it.

Mr. O'Malley

It is a somewhat technical point, but I agree with my hon. Friend that it is so important that I should give further details about it.

When I looked in the House of Commons Library for some background information on the state of the law relating to employment agencies I almost drew a blank. I was surprised at the small amount of information we have on this issue. I then made inquiries at the head office of the Musicians' Union, of which I am a member. I was told that just over a year ago the union made inquiries of the Ministry of Labour, the Home Office, the Ministry of Housing and Local Government, the County Councils' Association and the Association of Municipal Corporations and virtually no information could be gained from them about which local authorities have power to regulate employment agencies which with such power were using it and what was the nature of the power that existed.

I was, therefore, pleased to hear my right hon. Friend say that much fuller information was being collected now. While many of us believe that we know the general situation of the law governing employment agencies—those agencies operating in the spheres with which we are most closely connected—none of us can make a scientific estimate of how big a problem this is and how much abuse is taking place.

I understand that some local authorities have power, under local Acts or byelaws, to regulate employment agencies, although most of them do not use it. As my right hon. Friend pointed out, the position is patchy. It is, therefore, absolutely necessary for this Measure to get its Second Reading so that, in Committee, we can go into the matters which worry us and improve the Bill.

I take issue with hon. Gentlemen opposite when they object to the idea of legislation to regulate the rates of commission or fees. The House will observe that Clause l(3,e) states that a licensing authority may refuse to grant or renew a licence or may revoke a licence already granted … to any person who proposes to charge fees or commission which would in the opinion of the licensing authority be excessive or unreasonable in view of the nature of the services provided …". The Clause later states that the Minister may issue regulations regarding the fees to be charged. This provision would place on a local authority the necessity to provide an expertise which it does not possess if, for example, it was asked to decide the amount of a maximum fee. It would probably be difficult for such an authority to discharge that responsibility or to decide what was excessive or unreasonable. The saving provision is that the Minister may issue regulations, although agencies may appeal to the Ministry because of a local authority's refusal to grant a licence on the ground that the fees charged are excessive.

When the Ministry issues these regulations to fix the various rates of commission which may be charged for different sectors of commerce and industry, particularly in the entertainment world, I hope that outside authorities will be consulted, remembering that those authorities have not only the expertise to advise, but the interests of their members to look after. I hope that my union, the Musicians' Union, will have the opportunity of expressing any views which it might have on this subject. I want to find some way of dealing with unscrupulous agents who charge fees well in excess of 15 per cent. I see no other way of dealing with the problem than this method.

While I have been sitting in the Chamber the Library has found and sent me a copy of the London County Council General Powers Act 1921 which gave the London County Council the power to license employment agencies. To a certain extent my hon. Friend's Bill follows the pattern of that Act, because it says: It shall not be lawful for any person to carry on an employment agency … without a licence from the licensing authority authorising him so to do. In the London area there are already powers of that kind laid down in the Act to which I have referred. Licences cannot be issued to any person under 21, or to any person who may be unsuitable to hold such a licence, or in respect of any premises which are unsuitable for the purposes of an employment agency, or in respect of any employment agency which has been or is being improperly conducted. In spite of those provisions, one finds abuses in the London area.

One of the values of my hon. Friend's Bill is that it extends the provisions which we have had for London to other areas, and it also tightens up the situation in a number of ways. The first important way in which it does this is to give the Minister power to lay down what the maxima shall be. Secondly, it gives local authorities the power to decline to issue a licence or to renew a licence when they consider that the terms of commission proposed to be charged by the agencies are excessive or unreasonable.

I can see that there may be some difficulty of interpretation, but against that I set the fact that the range, scale, and amount of abuse which is going on at the moment is considerable. Furthermore, the interpretation difficulty is an administrative one which can be circumvented. At the moment large percentages are being taken by some of these people who describe themselves as agents. I regard this as the greater evil, far outweighing the objections made by hon. Members opposite.

I suggest to my hon. Friend that it is essential to retain these provisions in the Bill, and certainly if I have the opportunity of serving on the Standing Committee which considers this Measure if it is given a Second Reading today I shall object most strongly to, and vote against, any proposal to remove these provisions from this Measure.

Dame Joan Vickers

The hon. Gentleman did not read any section from the 1921 Act which said that the fees were controlled in London. They were maximum fees.

Mr. O'Malley

I think that the hon. Lady will recognise that even if there is legislation some people will abuse it. My experience has been gained, not in London, but in the north of England, where there are no such regulations as those to which I have referred for the registration of employment agencies. I think that the Minister should issue regulations regarding the fees to be charged.

Clause 7 says: For the avoidance of doubt it is hereby-declared that moneys other than fees or commission received by an employment agency in respect of the employment of a client of that agency shall be regarded for all purposes as the property of the client in respect of whose employment they are received and having been received on his behalf. I warmly welcome this provision, but I have one important point to raise on the definition of an employment agency. It may be that the Bill is unsatisfactory from the point of view of a working musician, because an agent who makes an appointment for a group of musicians may be serving as the agent for only one member of the group. In these circumstances will the agent's business be held to be carried on for or in connection with the employment of persons"? Perhaps my hon. Friend will consider this, and take advice on it. We can perhaps discuss this in Committee, though I would welcome the opportunity to discuss it privately before then.

I warmly welcome the Bill, but there is one other matter which I wonder whether my hon. Friend has considered. In the Nurses Agencies Act, 1957, which is the only Act which I have been able to find in the short time that I have had available this morning which is similar to this Bill, we are told that the licensing authority shall be the county council or the county borough. As I understand it, under this Bill the licensing authority will be the county council or the county borough. In the 1957 Act we are told: A county council may, on the application of the council of any county district … by agreement delegate … either with or without restrictions or conditions, any of the functions set out in that Act to the county district, and that the county district can appeal to the Ministry on this score. Has my hon. Friend considered inserting a similar provision in his Bill?

Mr. Speaker

Order. I hesitate to interrupt the hon. Member, but this seems rather like a point which might be raised in Committee.

Mr. O'Malley

The difficulty with a Private Member's Bill is that so often one does not have an opportunity between the Second Reading and the Committee stage to discuss matters fully with the promoter of the Bill. I merely ask my hon. Friend to consider this matter along with the other matters to which I have referred, and also to tell me whether the provisions of his Bill annul any of the provisions of the existing local Acts on this subject.

I close as I began by saying that as one who for a number of years was a working musician I welcome the Bill. I welcome it not only for myself. I can assure my hon. Friend that if it becomes law it will have a very warm welcome from all sections of the musical profession and he will be remembered with gratitude by the profession for putting it forward.

3.0 p.m.

Mr. Alan Lee Williams (Hornchurch)

I wish to raise a general point which would be inappropriate to raise in Committee. I support the Bill and congratulate my hon. Friend the Member for Putney (Mr. Hugh Jenkins) on bringing forward this excellent Measure. I understand that it is generally welcomed by industry to regulate this matter on a proper basis and to get rid of peripheral employment agencies which are subject to a great deal of criticism, and also perhaps to a great deal of corruption.

I certainly welcome the Bill and give it my full support, but there is a general philosophical point I wish to raise. In a full employment society as time goes on there are bound to be many employment agencies established, so regulation of them is very proper. There is also a responsibility which falls on the Ministry of Labour to make its employment exchanges increasingly more sensitive to the needs of people with specialist skills. We are reaching a situation in which the Ministry of Labour employment exchanges deal generally with people without specialist skills and private agencies deal with people who have special skills, such as actors and musicians. It would be a very unhappy state of affairs if the Ministry did not itself try to move into this field to provide employment for those with specialist skills. It would be a great shame if we encouraged merely profit-making employment agencies to provide services for these people in the entertainment industry or in industry generally.

I urge this on my hon. Friend and also on the Minister of Labour. They should consider that this side of the work also needs to be strengthened.

Mr. Hugh Jenkins rose —

Mr. Speaker

Order. The hon. Member has exhausted his right to speak. He may speak if he can get the leave of the House.

3.5 p.m.

Mr. Hugh Jenkins

If the House will permit me, as I have been asked one or two questions, I should like to spend a few minutes, if there is no objection, in dealing with the main points, although I recognise that I have no right of reply. It is clear from speeches made on both sides of the House that there is an expectation that I would have the leave of the House to make one or two points in reply. I shall be very brief and I shall deal only with those points which seem in courtesy to hon. Members to demand something to be said.

First I thank the hon. Lady the Member for Plymouth, Devonport (Dame Joan Vickers) for her general support. As has been said, she is a sponsor of the Bill. In my opening remarks I said that she had been helpful not only now but previously in its history. I find myself in agreement generally with the points she made, with an exception. That is on the fixing of fees. Nevertheless, I feel able to give some assurance which I hope she will find satisfactory until we reach Committee when we could have further discussion.

It is required in the Bill that agents should submit scales of fees and this should establish a norm. In issuing regulations concerning fees, the Minister would be concerned with what was the reasonable norm. It does not say anywhere in the Bill that the Minister has to lay down one fee and that that is the appropriate fee. It will be entirely right for the Minister to say that in certain areas fees should range between £X and £Y which he had discovered were the appropriate fees. I hope the hon. Lady will feel that that is a reasonable assurance until we reach Committee, when we can discuss the matter at greater length.

Clause 3(1,j) provides that an agent shall not faslely state that he is unable to supply permanent staff to an employer requesting the same, and supply instead (or attempt to supply instead) temporary staff". I am inclined to agree with the hon. Lady that, as at present worded, this might be difficult to enforce. Although I believe that the principle is right, I am not in any way wedded to the precise wording and I am ready to discuss this point in Committee.

As to Clause 4(b) and the question whether ladies aged 30 require supervision when abroad, I am rather inclined to agree with the hon. Lady that we have advanced to the point where ladies may be relied upon to look after themselves. I should be happy to discuss with the hon. Lady in Committee whether we have not gone a little too far in this regard.

The hon. Lady raised the general question whether staff contracting should be included in the provisions of the Bill. I think it should. The same people who act as agents also act as staff contractors. Although I agree that the same considerations which are applied to other types of agency work cannot be applied to staff contracting, it is vital that this type of intervention between the ultimate employer and the employee should be included within the broad aegis of the Bill, if only to give the Minister power to insure that there is no abuse of this operation. Examples have been given from both sides of the House of a tendency for this type of relationship to become an abuse, and for some people to say, "I am no longer an employment agent. I am a staff contractor, and therefore outwith control", although the relationship is essentially the same, particularly in the world of music. For this reason, I hope that the hon. Lady will not press this point. We can consider it again in Committee.

The hon. Member for Harrow, West (Mr. John Page) was concerned particularly with who is to administer the Bill when enacted. The hon. Gentleman thought that it should be the London boroughs rather than the Greater London Council. I believe that the G.L.C. is the right body. Prior to the London Government Bill, the London County Council was charged with the function of administering employment agencies. The L.C.C. had most inadequate legislation to do so, and consequently it did not do it very well. This is what the Bill is trying to correct.

However, I believe that the L.C.C. did the job better than the London boroughs are even attempting to do it. Some of the boroughs which have power to do this are beginning to exercise their powers. Others have not the powers. The greater the degree of uniformity of approach by officials, the better it will be for those being regulated. Undesirable anomalies could arise if one borough adopted an approach different from that being adopted in another, particularly if an agency with branches in different boroughs found that one of its branches was being treated differently than another of its branches. I am inclined to think that agents themselves would welcome the widest possible degree of uniformity.

If the hon. Gentleman were to press the point, it seems to me that we should have to give the Ministry of Labour much greater powers so that we should reduce local authorities to mere administrative agents. If we want to give the local authorities any substantial power in the matter this can only be done by devolving these duties upon the county authorities. However, this is probably once again a matter with which we can deal in Committee.

I am conscious of the pressure upon the time of the House. I should, however, like to thank my hon. Friends for what they have said about the Bill, and to say in particular to my hon. Friend the Member for Rotherham (Mr. O'Malley) that I think I am in agreement with him on many of the points that he made.

On the question of the I.L.O. Convention, I should like to trespass on the time of the House for a little longer because this point was raised not only by my hon. Friend the Member for Rotherham but also by the hon. Lady the Member for Devonport. As my hon. Friend has rightly said, the I.L.O. Convention can be implemented in one of two ways. It can be done either by abolishing these agencies or by regulating them. I should have thought that a great deal of advantage was to be found by the employment agencies themselves if the Government decided to regulate them. If Her Majesty's Government were to decide to regulate them under Part III of the Convention, then in so doing they would remove the necessity to implement the Convention under Part II which relates to abolition.

If I were an employment agent, concerned about the possibility of finding myself abolished, I would warmly welcome a Government decision to implement Part III concerning regulations. I hope the hon. Lady may feel able to commend this point of view to any of the employment agents who have approached her on the matter.

Those are some of the main points which have been raised in the debate. There is the philosophical point which was raised by my hon. Friend the Member for Hornchurch (Mr. Alan Lee Williams), and I think it is an interesting one. I hope the Minister of Labour or, if not, the Front Bench generally was listening to my hon. Friend because it seemed to me that he had an idea which has a lot to be said for it. I think there is much to be said for the proposal that the Ministry itself should enter and operate in certain fields and provide a sort of regulator or norm which would encourage private enterprise agencies to adopt the practices set forward by the Ministry, which one would hope would be the best possible practices.

I am grateful to the House for giving me so much time and attention on what I regard as an important matter and for the kindness with which the Bill has been received. I hope that we may now proceed to the Committee stage in which we shall, no doubt, improve the Bill. I hope that we may make progress in this direction, thereby introducing a protection which, as I have said, will be important for employers and employees and, not least, important in bringing a new status to the employment agents themselves.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).