Government issues response to Conduct Regulations review

Jo Faragher

The Department for Business, Innovation and Skills has issued its response to the recent consultation on the recruitment industry conduct regulations.

The Government’s response sets out its response to the consultation, which closed in April and invited views from representative bodies, individuals and companies in the recruitment industry.

Jo Swinson, the employment minister, has confirmed that the existing regulations would be scrapped and be replaced with new, lighter touch regulations that the Government hopes will relieve some of the burden of compliance for agencies, while still protecting vulnerable jobseekers.

Some of the key elements of the response include: an opt-out for limited company contractors; agencies will continue to be prohibited from charging jobseekers a fee for finding work; and the suggestion that recruitment businesses might have to publish information on placements and pay rates has been shelved. 

One of recruiters’ key concerns was that the Employment Agencies Standards Inspectorate would be scrapped – while this won’t be the case, it will be subsumed into HMRC’s National Minimum Wage unit and will focus on abuses of the most vulnerable workers, so its remit has been slimmed down. 

Director of Policy at the Recruitment and Employment Confederation Tom Hadley said: “The government must listen to sense on the need for key enforcement mechanisms to be maintained.”

 “There was a real risk that the EAS would be disbanded altogether with a focus on tribunals as a means of redress. It is good news that is being retained, but the fact that resource is being downscaled and responsibilities split between departments raises concerns about how effective it can be. Businesses cannot bring employment tribunals, and where an unscrupulous agency has failed to comply with the rules, they should be named, shamed and thrown out of our industry. 

BIS has also said it will retain a small investigative team to deal with non-compliance involving higher-paid workers or other breaches of the new regulations.

The Government is still to release detail on some areas of legislation, however. These include a firmer definition of preventing agencies from ‘enforcing unreasonable terms on a hirer’ in temp-to-perm situations, and the requirement for agencies to perform checks on candidates working with vulnerable people or children.

Members of industry body APSCo celebrated the opt-out for limited company contractors, with CEO Ann Swain commenting: “I’m thrilled that the months of hard work by [head of external affairs] Sam Hurley on behalf of APSCo has paid off, with this excellent result.  Without this effort by Sam and our members working closely with BIS it is very likely that there would be no opt-out, as was the Government’s intention going into the consultation.”

Adrian Marlowe, chairman of ARC, added his view: “The government has set about change in a constructive and balanced way. Although the consultation itself raised some real fears that wholesale change was inevitable, with some potential significant negatives, the response indicates that those confusing areas that need addressing are to be tidied up and those that have underpinned stability and security for workers as well as standards, are to be retained, with a likelihood that they may be improved for the benefit of the industry as a whole. We are therefore pleased with the outcome so far.”