Sector Dispatch - Recruitment services

More regulation for recruitment services sector in 2010

Recruitment and employment agencies are in one of the most highly regulated sectors in the UK. And they are facing yet more legislation that is being planned and introduced in 2010, and beyond including:

Changes to Employment Agencies Conduct Regulations

Recruitment businesses are subject to a wide range of legislation and regulation, including the Employment Agencies Act 1973, which sets out the standards of practice for employment agencies, and the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which govern the types of contracts that can be provided and the fees that can be charged. They also require agencies to confirm the identity, experience and qualifications of employment candidates.

However, at the beginning of 2010 the Department for Business, Innovation and Skills (BIS) published an impact assessment on possible changes to these regulations, which was developed after a consultation process during 2009.

The main proposed changes are designed to improve the protection for vulnerable workers employed via employment agencies, reduce the administrative burden for recruitment businesses and reduce the duplication of checks in the recruitment of permanent staff through employment agencies.

According to BIS' impact assessment, there is a risk that agencies are duplicating the range of suitability checks they must do by law for permanent recruitment and the Government is looking for a solution to reduce these inefficiencies. It proposes removing the requirement for employment agencies to carry out suitability checks for permanent recruitment.

Furthermore, the Government proposes putting measures in place to protect vulnerable agency workers who it claims are often mistreated by certain employment agencies, such as entertainment and modelling agencies, who charge upfront fees to prospective workers. BIS claims that agencies have abused this payment system and announced in November 2009 that the practice of charging upfront fees will be banned. Regulations to enforce the ban will be introduced in October 2010. Government research has shown that entertainers' and model agencies charge an average upfront fee of £200 for individuals seeking work in the entertainment and modelling sector and around 10,000 people join these types of agencies every year.

The Government is also looking to reduce regulatory burdens for recruitment businesses by introducing measures such as:

• Removing requirements to agree terms with work-seekers in permanent recruitment.
• Simplifying the requirements for employment agencies when placing advertisements.

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