Changes to Conduct Regulations & Agency Standards Enforcement

It is worth the reminder that
there were two related BERR consultations in 2007 on “… measures to
protect vulnerable agency workers” and “…National Minimum Wage and
Employment Agency Standards Enforcement”. Following responses to the
consultations, the proposed legislation was finalised and will take effect in
two stages during 2008.

The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2007.

These regulations amend the
Conduct of Employment Agencies and Employment Businesses Regulations 2003
(“Conduct Regulations”) and introduce new provisions that are
intended to better protect agency workers with effect from 6th April this
year. Key changes are:

  • Regulation 5: Where a
    worker decides to take up services from an agency, for example, accommodation
    or transport, the worker will be given a right of withdrawal from all services
    subject to five working days notice, or ten working days for accommodation.
  • Regulation 21: Amendments
    to procedures when passing information between the client and worker in cases
    where the assignment is for a short term (less than five working days) and
    information has already been provided.
  • Regulation 32: The rules
    relating to obtaining a valid limited company “opt-out” from the
    Conduct Regulations will now include the obligation for notice of the opt out
    to be given to the client before any supply starts. It has always been the case
    that to be valid an opt out must be given by the contractor and company before
    supply starts. This latest rule places an additional burden on the recruiter.
    If there is no valid opt out certain clauses in your contract relating to
    transfer fees may be invalid (depending on the terms used), and recruiters
    should comply with all the relevant Conduct Regulations.

For more advice on the new
regulations or the processes required to comply with the 2003 Conduct
Regulations please call Ravi Murphy on 01273 236236.

Employment Bill 2008.

This Bill will introduce new
provisions relating to enforcement from 1st October this year, specifically:

• Strengthened investigative
powers for Employment Agency Standards Inspectorate in enforcing the Employment
Agencies Act and related Regulations, including powers to allow EAS inspectors
to demand and secure copies of financial information from an agency or suspect
directly or from their bank or building society.

• Increased penalties
applicable for breaches, and new modes of trial.

Many in the industry support
the simplifications introduced in the Regulations amendments, and the improved
enforcement powers in the Employment Bill should help to tackle those seriously
non-compliant recruitment businesses that are known to be contravening
prohibition orders. There remain parts of the Regulations that are almost
unworkable in practice for some parts of the recruitment process, and there is
concern that these widespread unintentional compliance breaches are only being
selectively enforced rather than addressed at a general level. It remains to be
seen whether these powers will be used appropriately and whether there will now
genuinely be a level playing field with all recruitment businesses expected to
satisfy a minimum compliance standard.