BUSINESS Secretary Vince Cable will investigate a number of top employment agencies, accused of mis-selling personal accident insurance.
Cable was pressed to take action yesterday after Chuka Umunna, Labour’s shadow business secretary, highlighted six employment agencies and one larger company, Gee7, that he believes have been making money out of selling insurance to low-paid employees that they did not need.
“Evidence has emerged that agencies employing over 100,000 workers are involved in a practice that has left workers out of pocket and in some cases earning less than the minimum wage,” Umunna said.
Cable said the practice would be “indefensible” and “unlawful” if found to be true, adding: “The relevant body, the employment agency standards inspectorate, is investigating individual cases and will take enforcement action.
If it proves to be a widespread practice, there will clearly be a case for a broadly based inquiry.”
A Gee7 spokesman said the company did not and would never sell such an “unethical” product.
He said he knew of agencies that do, but refused to say if they had been reported to the regulator. “We have never ever got involved in temporary accident cover,” said Gee7 director Jon Pardoe.