Four years of change: facing the future

Adrian Marlowe

ARC chairman Adrian Marlowe looks back on a turbulent period for staffing companies, and sets out priorities for the group’s members in the future.

Last month marked four years since we set up the Association of Recruitment Consultancies, and during that time the industry has undergone a great deal of change. Looking back on those four years, we’ve been involved in some key campaigns and our recommendations have been taken up at the highest level.

The original driver for setting up ARC in 2009 was the Agency Worker Regulations. At that stage, they were perceived as a real threat to the recruitment industry. The Government originally planned to use hypothetical workplaces as comparators, so agency workers wouldn’t just get paid the same as someone who actually worked there, but the same as if there wasn’t someone working on the client side.

Everyone we spoke to was concerned about it and thought it would be right for us to pick this up as a starting campaign for the Association. We started off with around 10 members, but our points were sufficiently powerful that we were able to persuade other organisations – including the Institute of Directors – of the validity of our arguments, and they were enormously instrumental in helping us to take our campaign forward. We were successful in reducing the impact of the Regulations on the industry. Our work in this area continues and earlier this month we went back to BIS to help review the impact of paperwork and administration aspects of the AWR.

Fighting unfairness

Our next cause was another obvious source of unfairness. We’d always thought that the way the tribunal system was set up caused difficulties, so if someone had a spurious claim put sufficient pressure on their employer, they could win a pay out even if their claim had no merit.

In April 2011, we held a think-tank meeting with ACAS to gather together input for the coalition’s employment tribunal reform consultation. We put forward our recommendations to the Ministry of Justice for changes to the rules and these were positively received. The Government subsequently launched a consultation and, I’m pleased to say, some of those changes are now being implemented.

But the question of the extent to which worker complaints should be handled by tribunals is also an important ongoing issue within the recruitment industry – and this is another key campaign for us. One of the proposals in the recent review of the Agency Conduct Regulations was to scrap the Employment Agency Standards Inspectorate (EAS) and for agency workers to pursue claims via employment tribunals.

This has not happened, according to the Government’s recent response to the review, and we had campaigned hard for it to be maintained because it has a history of dealing with disputes quickly and effectively. Directing more claims to Employment Tribunals would only add extra burden to that system.

Levelling the field

The Conduct Regulations consultation has also brought another issue to the fore, which is payment terms. This is especially relevant to smaller hiring businesses, where they are working in a recruitment process outsourcing (RPO) or master vendor arrangement. At the moment, it’s typical for an agency to only get paid when the RPO is paid by their client. Often, this means that agencies have problems obtaining finance, because there’s no security. This can inhibit them from participating in these arrangements, so hiring companies are potentially missing out on specialist recruitment expertise because their RPO’s payment terms are not adequate. In addition, other commercial clauses relating to payment can also create an imbalance.

We think it is right that agencies should have to pay workers regardless, but RPOs need to change the way they do things to bring everything into line. 

So, looking to the future,the RPO campaign will be a key focus, but another area will be that of dual rights. Linked to our AWR campaign, the concept is that if someone has rights because they’re an agency worker, it does not make sense that they can also claim they’re an employee of the hirer. We’ve been campaigning with government to make the two different sets of rights exclusive.

However, the difficulty for government is that it doesn’t want to be seen to be taking away the possibility of employment rights. In June, a European Court of Justice case involving an Italian postal worker has at least provided some clarification and supported the ARC campaign on this matter. Success on this dual rights point would remove hirers’ fear of unnecessary tribunal claims by agency workers, so this is a major objective.

Going forward, our response to the outcome of the consultation into the industry’s Conduct Regulations will be critical. We believe that a common set of standards should apply to the recruitment industry as a whole, in order to maintain a level playing field. If you remove standards by removing the regulations, by doing that you could allow standards to drop overall. So there’s obviously lots of work for us to do during the second half of this year.

Our objective is to create a stable platform from which recruitment businesses can operate, and take unfairness out of the equation. Our members are important to us to help us drive these campaigns and in return ARC does everything in its power to support them.

Adrian Marlowe is the chair of the Association of Recruitment Consultancies