Reform of employment agency regulations (UK)
1 February 2000 -
Over half a million temporary workers in the UK should benefit from changes
to employment rules. Staff supplied by employment agencies on a temporary basis,
including office staff, models and actors will receive greater employment protection
rights. These include easier transition from temporary to permanent work.
The new regulations replace the Conduct of Employment Agencies and
Employment Business Regulations 1976, the Employment Agencies Act
1973 (Charging Fees to Workers) Regulations 1976 and the Employment
Agencies Act 1973 (Charging Fees to Au Pairs) Regulations 1981.
With a turnover in excess of £20 billion a year, the private recruitment industry
is a major player in the flexible employment market. The industry grew by 20% last
year and had a major role in several economic sectors, including
entertainment, construction, IT and caring and medical support.
The first changes in this area for 20 years. Main points:
* Ban the practice of agencies charging models and entertainers before
arranging work for them;
* Ensure that agents use properly controlled client accounts when dealing
with the earnings of the workers they supply;
* Provide a new hiring extension option as an alternative to employers
having to pay agencies a fee when offering permanent positions to temporary staff.
This should give more flexibility alround yet ensuring that agencies get a reasonable
* Introduction of revised contracts which make it clearer that temporary staff
know they are engaged by their agency. This should stop confusing arrangements
and prevent cases where elderly and vulnerable people find themselves responsible for
ensuring that a carer's contract complies with national minimum wage or other
* Stronger protection for parents using nanny agencies. Nanny
agencies will be required to take all reasonably practicable steps to
confirm a work-seeker is not unsuitable and must offer parents copies
of at least two references obtained.
* Protection for employees from indiscrminate circulation of their
CV's on the Internet or through other means.
* Provision of tougher controls on bogus print or internet advertisements,
e.g. those advertising jobs that do not actually exist.
Industry Minister Alan Johnson said:
"Temporary workers play an important part in our economy, working
both in and out of the public eye. These reforms will curb the
activities of agencies that prey on vulnerable work-seekers, as well
giving more flexibility and contracting three separate sets of rules
"These measures provide a clear legal framework which give a further
competitive boost to a thriving industry. I'm sure the industry will
welcome these much needed reforms, they know that a disreputable
minority can smear the entire industry.
"There is evidence that some agencies have used transfer fees as a
means of blocking entry into permanent employment. The new
regulations will help hirers and workers without damaging the
legitimate concerns of agencies who need to ensure that they are not
being used as a recruitment service.
"Where a hiring has lasted more than 6 weeks before finishing, an
agency will not be able to charge a transfer fee if the worker is
employed permanently by that employer, more than 8 weeks after the
original hiring ceased.
"Customs & Excise plan to introduce a concession, to coincide with
these changes, so that those who buy care in their own home, those
least able to look after themselves do not suffer any increased VAT
burden as a result of the clarification of carers' contracts."
According to Employment Minister Margaret Hodge:
"This is excellent news for parents. Agencies will have to take all
reasonable steps to ensure nannies are suitable for working with
children. They will have to offer parents copies of at least two
references. To complement the regulations, the DfEE will issue a new
code for nanny agencies."
Tim Nicholson, Chief Executive of the Recruitment and Employment Confederation
supported the revisions:
"We welcome the Government's announcement on temp-to-perm. It is a
significant step forward from the original proposal of four weeks. It
demonstrates that good working relationships have developed between
the REC and government, and that the industry's case has received
The new regulations are expected to come into force in summer