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UK – Gangmaster loses license over bogus self-employment sham

03 February 2012

A recruitment agency classified as a ‘gangmaster’, has lost its license for supplying restaurant chains, including Loch Fyne, with workers who claim to be “self-employed" in order to save their employers money on tax. In the UK, gangmasters are a special category of staffing business providing workers to the agricultural, horticultural and shellfish industries. It is the only category of staffing business that is required to hold a licence.

After the newspaper Mirror reported that a restaurant chain was employing chefs from Romania on a self-employed basis in order to avoid paying for holiday pay, sick pay and national insurance, it has now been revealed that these agency workers were supplied by a the employment agency Sara Recruitment, which is run by a Romanian citizen, Ioana Danciu. Sara Recruitment, provides Romanian agency workers to the construction, engineering, healthcare and catering industry, advertised dubious jobs. Sara Recruitment was granted a licence from the Gangmasters Licensing Authority (GLA), which was established after the Morecambe Bay cockle picking tragedy in which migrant food pickers tragically lost their lives.

However, the GLA has now withdrawn the licence after "Evidence gathered from interviews with workers and clients (indicated) that the workers Sara Recruitment supplies are not genuinely self-employed." The GLA also found that workers earned below the minimum wage after reductions from their pay was made, the Mirror claims that Ms Danciu underpaid four workers by £1,200 in case she was found liable for unpaid tax. 

Although Ms Danciu appealed against the GLA's decision, her recruitment agency has since gone into liquidation. 

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