The Conduct of Employment Agencies and Employment Businesses Regulations will be coming into force on 6 April 2004. Rachael Heenan, Associate with Beachcroft Wansbroughs’ national Employment practice, summarises the main changes.
It is estimated that around 700,000 agency workers and 17,000 agencies and employment businesses in the UK will be affected by the new rules. The main changes are as follows:
Historically, large transfer fees payable in this situation have often dissuaded hirers from taking an agency worker onto their own books. The Government hopes that this new rule will mean a better deal for hirers and workers.
Example of how the quarantine period will work:
– If the posting lasts one day, the quarantine period will be 13 weeks and 6 days.
– If the posting lasts 5 weeks, the quarantine period will be 9 weeks.
– If the posting lasts more than 6 weeks, the quarantine period will be 8 weeks.
Following strong representations made to the Government by employers’ organisations, the Government has agreed to change its original proposals so that contractors who operate as limited companies may now be able to opt out of being covered by the Regulations. This opt-out will not, however, be available to individual workers.
The DTI’s Employment Agency Standards Inspectorate will police the new rules. The maximum penalty for breach of the rules will be £5000 for each offence and, in serious cases, a ban on an agency operating for up to 10 years.
What action should employers be taking to prepare for the new Regulations?
HR professionals will no doubt want to ensure that they are compliant with the new rules and review their terms and conditions with agencies, particularly with regard to transfer fees for an agency worker moving from temporary to permanent status.
Guidance on the Regulations is currently being prepared by the DTI and it has committed to ensuring that this is available to employers, agencies and individuals well in advance of 6 April 2004. Whether this happens remains to be seen and hirers would be well advised to take steps to educate themselves as much as possible on the new regime pending the formal guidance being published.
