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 ex