| |
The long-awaited review of the Employment Agencies Regulations
came into force on 6 April 2004 as the 'Conduct of Employment
Agencies / Business Regulations 2003'. These are intended to
update the regulation of the recruitment industry in the UK
- Manpower however already operates to levels well beyond the
statutory minimum so these changes will have little impact on
Manpower clients.
Definitions
The regulations aim to legislate for different types of business
- Employment Agencies and Employment Businesses. 'Employment
Businesses' are suppliers of temporary/casual workers to third
party hirers; whilst 'Employment Agencies' introduce workers
to hirers for direct employment by the hirer, sometimes referred
to as head-hunters. Key Provisions of the Regulations
The main impacts of the Regulations are as follows:
- Employment Businesses are restricted (not
prevented) on the charging of 'transfer
fees' - eg 'temp-to-perm',
'temp-to-temp'
and 'temp-to-third party'
fees (*see additional detail below).
- Payment to workers may not be withheld on
the basis of there being no signed time sheet or if the
Employment Business has not been paid by the hirer. (The
Employment Business may delay payment whilst making reasonable
enquiries to verify the time of work).
- Employment Businesses may not supply temporary
workers to replace employees engaged in official industrial
action.
Manpower already operates this policy - it is now enforced
by law for all Employment Businesses.
- Employment Businesses and Employment Agencies
must provide greater clarity in terms of the capacity in
which they act - ie whether the work provided is of a permanent
or temporary nature.
As an Employment Business and Employment Agency Manpower
provides both permanent and temporary placements and already
operates a policy advising clients and work-seekers so.
- Employment Businesses have increased obligations
in terms of clarity and content of written contracts and
information provided to workers and hirers. Manpower employs
field staff on a full contract of employment, so already
meets the requirement to provide written contracts to workers.
- Employment Businesses and Employment Agencies
have increased obligations to obtain sufficient information
on both the position to be filled and the worker, before
supplying workers. This includes the nature of the work
as well as appropriate training for the worker and details
of qualifications etc. This is already Manpower's standard
practice.
- Once placed, the Employment Business must
advise hirers if additional relevant information comes to
light which gives reasonable grounds to believe the worker
is unsuitable, and in some cases withdraw the worker from
the assignment.
Implications
The private recruitment industry is substantial in the UK
with an estimated turnover of £12-18 billion. The Government's
aim is to promote labour flexibility with the protection of
workers, while reducing bad practice. The Regulations are
intended to provide greater clarity, though also bring some
additional burdens and complexities to the private recruitment
industry and to businesses using their services. All businesses
need to review their practices, procedures and documentation
in the light of the Regulations.
Many of the Regulations also apply to workers supplied by
Limited Company Contractors but there is, however, an ability
for LCCs to opt out of certain parts of the Regulations.
For Manpower, many of the new Regulations simply confirm
our existing policies and practices and therefore will not
require significant change on our part, unlike much of the
competition which will find them more onerous.
*Temp to Perm Fees
Transfer fees is an area of the Regulations causing concern
- Temp to Perm, Temp to Temp and Temp to Third Party (defined
below).
The Regulations do create restrictions on how transfer
fees might be used, but do not prevent the charging of transfer
fees.
The request to alter temporary to permanent employment is
most likely to occur once a field staff is carrying out an
assignment with a client. However, the Regulations also allow
the client to specify before an assignment begins that they
will want to make the individual permanent. In this case,
the length of time and terms of temporary supply without a
transfer fee being charged must be agreed in advance in a
written contract.
Where the charge of transfer fees is possible, there are now
three main options:
- If the hirer wants to take on an individual
permanently, transfer fees may then be charged, as agreed
at the start of the contract between the hirer and the Employment
Business.
- The hirer
must also be offered the alternative of extending the hire
period rather than pay the transfer fee. This 'extended
supply' would be for an agreed period on no less favourable
terms than the existing supply (i.e. a rate increase cannot
automatically be applied during this extended period).
- The hirer can avoid the transfer fee if 'a
relevant period' of time passes
between the end of the assignment and the hirer employing
the individual. This 'relevant
period' (sometimes referred to
as a 'quarantine period')
can be defined in two ways:-
-
8 weeks after the field staff last worked
for the client on assignment from Manpower, (i.e. 8 weeks
from the end of that assignment), or
-
14 weeks after the field staff first worked
for that client on assignment from Manpower, (i.e. 14 weeks
from the beginning of that assignment)
whichever of these is the later.
NB:
- Where a member of field staff works intermittently
for a client, the 14 week period is treated as continuous
from the first date of the first assignment unless assignments
have been separated by at least 6 weeks, in which case the
14 weeks can start again.
Transitional Arrangements
Although the new Regulations came into force on 6th April,
there is a timescale built in to allow a smooth transition
into current business practice and existing contracts.
Any existing contracts with clients, i.e. contracts or supply
of field staff that began before 6th April 2004,
which include transfer fee clauses (i.e. temp to perm or temp
to temp fees) but do not include the alternative of an extended
period of supply instead of the transfer fee, remain valid
until 5th July 2004. After 5th July, the
extended supply alternative will be effectively implied into
all contracts.
In other words, you can continue to charge a temp to perm
(or temp to temp) fee without having to offer the alternative
of extended supply for any booking that began before 6th April
but only if the transfer then takes place before 5th July.
After 5th July the new Regulations must be adhered to totally
as laid out above.
Definitions of transfer fees
- 'Temp to perm' - where a member of field
staff is directly recruited by the client;
- 'Temp to temp' - where the client changes
agency and requires our field staff to move to another agency
to continue working for him (this may or may not involve
a TUPE transfer, which is a separate issue);
- 'Temp to third party' - where our client
introduces a member of our field staff who has been supplied
to him to another employer which then recruits that field
staff as a direct employee.
|
|
