Recruiter fined for flouting Conduct Regulations
A stark reminder was handed down recently by the courts – comply with the legislation or face the consequences!
The director of Whites Recruitment International pleaded guilty to eight charges contrary to the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (Conduct Regulations) for failing to supply workers with the necessary paperwork and for withholding wages. He was fined £16,000 and ordered to pay £16,979.38 towards prosecution costs.
This case serves as a warning of the serious consequences that directors and agencies can face if they fail to comply with the Regulations.
Agencies that break the law may be prosecuted and subject to unlimited fines. ‘Rogue agencies’ could also be banned from operating for up to 10 years. In the Whites case, the individual concerned was banned from acting as a company director for 2 years.
Theresa Mimnagh, Associate Director at Lawspeed, commented “The Conduct Regulations have been around since 2004, yet they are not always considered a significant compliance priority for recruiters, with concerns over the AWR, tax liability and commercial considerations often taking precedence. However, this case shows clearly that not only do Employment Agency Standards have the power to enforce the regulations, but that they will take enforcement action where required”.
Mimnagh continued “This case was relatively extreme. However, the risk of liability under the Conduct Regulations can be mitigated by having compliant contracts, good internal processes and staff training, for example to ensure that valid opt outs are in place, and that payment arrangements with clients do not expose you to risk of a breach.”
Lawspeed provides a hotline for recruiters on all compliance issues. Give us a call on 01273 236 236 or email us at [email protected]
Adrian, a highly experienced lawyer, founded Lawspeed in 1997. He is responsible for developing our extensive portfolio of products and services, including the widely used Lawspeed contract templates. Adrian is an expert on “recruitment law” and specialises in contracts, regulatory compliance, employment status and dispute handling. He is chair of the trade body the Association of Recruitment Consultancies, the only lawyer lead recruitment trade body in the UK. Adrian and his co-director Ravi devised Standards in Recruitment as a vehicle for helping drive up standards and compliance in the industry.
Adrian is our lead in discussions with the government over regulatory evolution. Apart from assisting with client support, Adrian’s primary role is research and development into methods of business delivery, our latest service Proterms being his most recent project. Adrian heads our IR35 lawyers team.