Government’s Proposed Response
Find attached a summary of the government’s proposed response to the consultation which took place earlier this year on Agency Regulation. This consultation took place during the VAC’s term of office.
As widely predicted the government has loosened regulation rather than moving towards the licensing of agents.
The Government has considered the responses to the consultation and, after this consideration, intends to proceed with the proposal to replace the current legislation with a new regulatory framework which removes some of the burden from business but continues to protect people who are looking for work. We would propose that new legislation could cover areas including:
Ensuring that employment businesses do not withhold payment from a temporary worker
Restricting employment agencies and employment businesses from charging fees to work-seekers – exemptions for certain circumstances in the entertainment and modelling sector as in the current legislation
Ensuring that where more than one business work together to supply a temporary worker to a hirer there is clarity on who is responsible for paying the temporary worker
Preventing employment businesses and employment agencies from penalising a temporary work-seeker for terminating or giving notice to terminate a contract
Preventing employment businesses from enforcing unreasonable terms on a hirer when a temporary worker takes up permanent employment with that hirer
Ensuring that employment agencies and employment businesses keep sufficient records to demonstrate they have complied with the regulations
The Government does not intend to extend the charging of fees to employment agencies outside of the entertainment and modelling sectors.
Some responses to the consultation indicate that there may be abuse of upfront fees in the entertainment and modelling sectors. We intend to speak to a variety of stakeholders, including industry bodies representing sectors where upfront fees are in use, and unions, to better understand the issues.
The Government would amend the current definition of ‘employment agency’ to remove job boards from the scope of the regulations. Government does also acknowledge that clarity around which businesses the definition applies to is key to effective regulation in the sector.
We would carry out a further short consultation on draft legislation, including the new definition of ‘employment agency’, after it has been prepared. Further consideration will be given to the most appropriate way of ensuring that the UK's wider obligations under EU and International law, such as the recruitment and placement aspects of the Maritime Labour Convention, are upheld.
The Government would retain a provision for individuals who are limited company contractors to opt out of the regulations and engage with employment businesses and employment agencies, in a business to business relationship.
The Government does not intend to make it compulsory for employment agencies and employment businesses to publish information about their business. Many businesses already publish varying degrees of information and the Government believes it should be left up to businesses whether they choose to publish information or not.
The Government intends to change the enforcement strategy in the recruitment sector by moving to a more focussed and targeted enforcement regime. In future we will focus Government resource on helping the most vulnerable workers who need protection, particularly those on the National Minimum Wage (NMW), by moving resources from the Employment Agency Standards Inspectorate to HMRC's NMW team. The NMW team will investigate complaints of non-payment of NMW to temporary workers. Enforcement will be carried out under NMW legislation and will be subject to HMRC sanctions.
A small team will remain in BIS to enforce the other regulations which apply to employment agencies and employment businesses, including non-payment to workers earning above NMW and workers in the entertainment and modelling sectors. Individuals will also be able to enforce their rights informally and through the courts.