On 23 November 2011 the UK Government announced that it planned to consult on changes to the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (Conduct Regulations). At that time, Business Secretary Vince Cable said:

We are going to consult next year with a view to scrapping unnecessary rules and making the remaining ones more comprehensible to business, so they can use agency workers as flexibly as possible”.

Sounds great, doesn’t it? If only part of it had been true.  On 17 January 2013 (some 14 months later) the Government started the consultation process, which will close on 11 April 2013. However, the extent of the consultation is much more limited than originally envisaged. It is apparent from the content of the consultation document that the Government actually considers the existing rules to be pretty sensible and reasonable already. It is therefore unlikely that the Government will be “scrapping” any of the existing rules, but will instead be consolidating and tweaking them, either through new legislation and/or by recommending that trade bodies within the recruitment sector create additional rules and guidance themselves within the existing legislative framework.

One impact could be that the number of Employment Tribunal claims brought by agency workers against employment businesses will in fact increase. The changes that the Government has flagged as possibly being included in the new consolidated legislation include:

  • not only ensuring that the temp to perm “transfer fees” payable by hirers are reasonable, but also introducing a (so far unspecified) method of ensuring that agency workers do not suffer a detriment as a result of their terminating the assignment/contract – hirers and agencies could potentially incur a monetary penalty if the agency worker suffers a detriment.
  • where an employment agency or business breaches the rules, agency workers could bring an Employment Tribunal claim, whereas the existing legislation can only be enforced by the Employment Agency Standards Inspectorate – this could give rise to additional Tribunal claims.
  • compulsory disclosure of market information including (but not limited to) the number of jobs/temporary placements available, number of work-seekers available, average length of time to fill a vacant post, number of payroll errors etc. – some employment agencies and businesses may already volunteer these details to agency workers and hirers. However, for those that do not, it is an additional administrative burden.
  • more rules on the records that the recruitment sector must maintain to demonstrate compliance – even if the legislation does not directly deal with this, the heightened risk of Tribunal claims will probably lead agencies to keep more records in any event to assist with their defence should claims be brought against them.   

The Government will provide its response to the consultation on 5 July 2013. We are therefore unlikely to see new draft legislation until late 2013.  The overwhelming temptation at this stage is to conclude that this will take only the smallest of steps towards making the Employment Agencies Act 1973 and the Conduct Regulations more comprehensible or more flexible.