Stop press: Agency regs announced

The Department of Trade and Industry has announced its long awaited agency regulations giving limited company contractors or freelancers the option to opt out in some circumstances and changing the provisions that prevent temporary workers from taking permanent jobs with a 'temp-to-perm' fee being paid to the agency.

They will come into force next April and will affect more than half a million people working through 17,000 agencies and employment businesses across Great Britain.

As always the devil will be in the details and the full implications should be known soon.

The measures which will come into force in April 2004 include:

• limits on provisions that prevent temporary workers from taking up permanent jobs with hiring companies unless a fee (known as a 'temp to perm' fee) is first paid to the agency;
• provisions to allow limited company contractors, 'who are often highly paid and highly skilled, to opt out of being covered by the regulations but which prevent vulnerable workers being forced to do so;
• agencies placing actors, models and extras no longer being allowed to charge upfront fees before they find them work;
• employment businesses no longer being able to withhold workers' pay purely because they cannot produce an authenticated timesheet;
• agencies having to obtain information on any health and safety risks known to the hirer and the steps taken to prevent or control those risks;
• new safeguards requiring employment agencies to vet temps who work with vulnerable groups.

The DTI has been consulting widely on this for some considerable time. Although speculation has been rife that there would be an announcement at any time, it is possibly no coincidence that this has occurred just after the EU's own initiative (Agency Workers' Directive) seems to be dead in the water.

Temp-to-perm fees

Before a posting with a company starts, companies, agencies and workers are free to reach agreement on the terms governing fees or the length of assignment that best suit their own wishes and circumstances.

Only if terms are not agreed at the start of a posting, the regulation imposes a minimum (8) and a maximum (up to 14) number of weeks quarantine that must pass before workers are free to take up a permanent post at a company without that company having to pay a fee to the agency.

For Example:

• Posting lasts 1 day - quarantine period of 13 weeks and 6 days
  
• Posting lasts 1 week - quarantine period of 13 weeks
  
• Posting lasts 3 weeks - quarantine period of 11 weeks
  
• Posting lasts 5 weeks - quarantine period of 9 weeks
  
• Posting lasts 6 weeks+ - quarantine period of 8 weeks.

The DTI said: "The regulations clarify for all parties - workers, agencies and employing companies - the issue of how long it is reasonable to expect workers to wait once they have left a company before they can take up permanent employment with that company without that company having to pay a fee to the agency."

Online

The Government is still considering the case put by certain on-line recruiters last year on the regulations suggesting they should be exempted from the provisions of the Regulations. The Government plans to respond to the new issues raised by this case by the summer of 2004.

DTI

Employment Relations Minister, Gerry Sutcliffe said: "These safeguards will help ensure that vulnerable groups are looked after by suitable people.

"They'll also mean that unscrupulous entertainment and model agencies can't charge young hopefuls a fee where they have no work to offer.

"In the future, everyone who uses the services provided by agencies and employment businesses can have greater confidence in them - both those companies that use them to supply staff as well as the agency workers themselves.

"Employment agencies play a valuable part in helping people to find their feet in the world of work, whether after a period of absence or unemployment or helping young people to take their first steps on the career ladder. The vast majority of agencies are well run but we are ensuring that they do not face unfair competition from those who abuse their workers."

Enforcement

The rules will be enforced by the DTI's Employment Agency Standards Inspectorate, which currently receives around 10,000 enquiries a year through its telephone helpline. The DTI made 950 inspections last year and recovered over £22,000 of workers' wages that were illegally withheld and could not have been recovered by other means. The maximum penalty for breaking the regulations is a £5,000 fine for each offence and a maximum ban of 10 years.

Anyone with a complaint or query about an employment agency or about the law applying to agencies should contact the Employment Agency Standards Action Line. The number is 0845 955 5105 (all calls at local rates).

Guidance

The revised Conduct of Employment Agencies and Employment Businesses Regulations come into force on 6 April 2004 and should be available.

When the details are available it will be clearer of the exact impact and arrangements of the 'opting-out' for freelancers.

Full guidance on the regulations is being prepared in collaboration with the Recruitment and Employment Confederation (REC) - the main industry trade association - and the DTI aims to work with the industry and with trade unions to ensure the guidance is both as clear and straightforward as possible and is distributed throughout the industry, well before the regulations come into force.

The DTI is also planning to participate in a range of awareness-raising activities to ensure agencies, workers and hirers are made fully aware of the new requirements.

Vulnerable groups

Agencies supplying temps to work with children, the elderly and the infirm will be required to carry out additional checks - including obtaining copies of relevant qualifications, two references, and a responsibility to take all reasonable steps to confirm that an individual is not unsuitable.

If new, adverse information comes to light, they will have to withdraw the temporary worker or inform the employer if the worker has been supplied on a permanent basis.

Entertainment

Provisions on charging upfront fees include special provisions for entertainment and model agencies that produce a publication that includes work seekers' details.