Conduct of Employment Agencies and Businesses Regulations

Background

The government first proposed an overhaul of the regulation of employment agencies and employment businesses in 1999.  Since then the government has implemented the Conduct of Employment Agencies and Businesses Regulations 2003.  Most of the provisions of these regulations came into force on 6 April 2004 and the remaining provisions came into force on 6 July 2004.

These regulations are entirely separate to the proposed EU Temporary Agency Workers’ Directive, which was proposed in 2002.  This is still only a proposed directive.

These regulations are intended to promote flexibility and increase protection both for workers who find employment through agencies and for businesses that use them for permanent recruitment or temporary cover (referred to in this article as “users”).

Key benefits for users of agencies and employment businesses under the regulations are: 

• Increased obligation on employment agency/business to vet workers
• Restrictions on “temp to perm” fees charged by employment businesses.

Summary of the regulations

The regulations distinguish between:

• employment agencies, which introduce workers to a user who then contracts directly with the worker for either a temporary or a permanent role
• employment businesses, which enter contracts with workers and supply their services to the user organisation.

Many of the obligations under the regulations are, however, common.  General obligations of employment agencies and employment businesses are:

• to state clearly in their terms and conditions the basis on which they act (employment agency or business) and to explain this consistently to both workers and users
• not to enter contracts on behalf of workers or users without authority and to notify people of these terms as soon as possible
• to notify users about all the charges they will encounter – charges to workers are prohibited except in limited circumstances such as theatrical agencies and
• to explain the type of work the agency or employment business will find or seek to find for the worker.

There are special obligations regarding payment of workers. Employment businesses are obliged to pay workers even if the user does not pay the employment business’ invoices, regardless of whether the user has verified the hours worked through a timesheet, for example. This should be reflected in the contract with the worker.

Employment agencies are prohibited from paying or being in any way connected with paying fees to people they introduce to a user.

Rights of users

Users have the right not to be charged temp to perm fees by employment businesses, subject to a minimum “quarantine” period of the later of either:

• eight weeks beginning the day after the worker was last supplied by the employment business to work for the user, or 
• fourteen weeks, beginning on the first day the worker was supplied by the employment business to the user.

Users also have the right not to receive unsolicited introductions before terms of business have been agreed.  And no worker should be introduced unless the employment agency/business has obtained confirmation of  – and confirmed this to the user orally or otherwise – the worker’s identity, that they have the qualifications/training/experience required and that the worker is willing to accept the position.

Where the role requires professional qualifications or work with vulnerable people, the employment agency/business has to obtain copies of the relevant qualifications and take all reasonably practicable steps to obtain two independent (and willingly given) references.

Where the employment agency/business is unable to obtain these references, the user must be told of the steps taken to comply with this requirement.  In addition the employment agency/business must take all other reasonably practicable steps to confirm that the worker is suitable for the position concerned – for example, if the role requires working with vulnerable people, a request could be made for enhanced disclosure by the Criminal Records Bureau.

Rights of workers

There is no obligation for workers to use any additional services or to hire or purchase goods in return for work-finding services. They should also be given a full explanation of the terms behind any “free gift” or benefit offered as an inducement to sign up. The terms and conditions should also be set out in a single document.

Employment agencies/businesses are prohibited from withholding services in exchange for variation of standard terms. If they make any mutually-agreed variations, the employment agency/business must provide the worker with a single document setting out the terms as agreed to be varied and the date it was agreed these varied terms are to take effect. This should be provided within five business days following the day in which the employment agency/business and the worker agree the variations.

Workers have the right not to suffer any detriment if they decide to seek work through another agency/employment businesses or any other third party.

They are also entitled not to be introduced or supplied to a user unless the agency/employment business has ascertained certain information.  This includes:

• the identity of the user
• the type of work and its likely duration
• work hours
• qualifications, training and experience required
• expenses payable
• any health and safety issues and
• for employment agencies only – the minimum rate of remuneration and any other benefits, the intervals at which the person would be paid and (where applicable) the length of notice to terminate the employment.

Colina Greenway is a director in the people services team at law firm McGrigors

colina.greenway@mcgrigors.com