Following the Government’s Red Tape Challenge (RTC) in 2010, the Department for Business Innovation and Skills (BIS) on Thursday 11th April completed its collection of feedback from recruiters for the ‘Consultation on reforming the regulatory framework for employment agencies and employment businesses’. 

Meridian welcomes the BIS consultation on Conduct Regulations, but any changes should relieve the administrational burden for recruiters, while maintaining protection for workers.

While the goal of the review, to cut unnecessary red tape, is something we’ve long sought for, there are concerns that the consultation is concentrating on the wrong areas.

One of the primary goals highlighted by BIS, for example, is to reinforce the principle that employment businesses and agencies are restricted from charging fees to work-seekers. But this matter is already clear cut; fees to workers to find work are not allowed and any agencies doing so are flouting the law.

Similarly, efforts to ensure that contracts between workers and recruitment firms do not hinder their movement between jobs and that temp-to-perm transfer fees are reasonable are wholly unnecessary. AWR deals with equal treatment and the requirement to be advised of roles within a client company at length. To my mind, the current rules for temp to perm fees are fine and reasonable.

One area of paramount importance though is the concentration on increasing clarity over who is responsible for paying temporary workers for the work they have done. As we all know, the recruitment industry has changed massively since the legislation we are held to now was brought in. When the Employment Agencies Act 1973, and even the Conduct of Employment Agencies and Employment Businesses Regulations 2003, were introduced, fewer companies in the supply chain meant it was pretty clear who was responsible. The agency would be paying the worker as the company that contracted and the end hirer was responsible for directing, supervising and controlling the worker. Today though, the supply chain can become incredibly convoluted, as multiple intermediary companies, agencies and umbrella organisations potentially cloud the key question of ultimate responsibility. Some workers get confused over who they are actually contracted with and generally think they are contracted by the agency that has found them work, but this is not always the case. Employment agencies should not be responsible for the payment of workers where the employee is contracted by another company, such as an umbrella company. Mandatory guidelines enforcing a clarification of responsibility would be welcomed, but again care must be taken that this does not increase red tape.  

Of the areas highlighted by BIS for review, I think the whole notion of self-regulation and data sharing is particularly nonsensical, a misleading solution that should be abandoned. As Meridian has maintained across the influx of government legislation over recent years, the only effective way to police agencies, some of which flout regulations even with a disciplinary body in place, is through more thorough external inspections that carry significant consequences for non-compliance. Abandoning the ESA in favour of the proposed approach would not only be foolhardy, it would increase the administrative burden on agencies – the very reverse of what it’s supposedly setting out to do.

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