Proposed reforms on the regulation of the recruitment industry

Posted by Oliver Weiss on
Between January and April this year the Government conducted a consultation on its proposed reform of the legislative framework regulating the recruitment industry.

The existing framework, consisting of the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003, is considered by many in the sector to be overly complicated and difficult to navigate.

In July the Department for Business Innovation & Skills (BIS) published the Government's response to the consultation. Its proposals (page 29-30 of the document) include replacing the current legislation with a new framework aimed at easing the burden on businesses without removing protection for work seekers. The Government intends to clarify which types of businesses are caught by the legislation through a new definition of 'employment agency'. This will include the removal of job boards from the scope of the regulations.

Although some responses to the consultation were in favour of allowing agencies to charge fees to work seekers, the Government does not propose to extend this outside of the entertainment and modelling sectors, where there is already limited scope for charging fees under the existing regime.

In a welcome development the Government has indicated that it will retain the opt out for individuals who operate as limited company contractors, and it will continue to leave it up to individual firms to decide whether to publish information about their businesses.

The response has largely been welcomed by recruiters and trade bodies for the industry, but one area where the Government has been less industry friendly is in relation to transfer fees for temp to perm hires and contractual provisions which penalise temporary workers who terminate their assignments, practices which the Government says it will continue to seek to restrict.
The new draft legislation is expected towards the end of this year.

If you would like more information on this consultation and the potential impact of any new legislation on your business, please do not hesitate to contact us.

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Oliver heads up the London Employment, Pensions & Benefits and Immigration Team.

Oliver Weiss
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