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Changes to the regulations affecting agencies and employment businesses

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Changes to the regulations affecting agencies and employment businesses

Changes to the regulations affecting agencies and employment businesses

New rules, which came into force on 7 May 2016, will change the way recruiters advertise for UK-based vacancies.

In addition, recruiters will see the removal of certain restrictions, including the prohibition on entering into contracts on behalf of a client and the requirement to agree terms with hirers before services are provided by the agency or employment business.

In the last quarter of 2015, the Government undertook a consultation relating to the way in which agency and employment businesses operate, with the aim of reducing red tape. Currently, agencies and employment businesses are governed by the Conduct of Employment Agencies and Employment Businesses Regulations 2003 ("Conduct Regulations"). The Government's consultation resulted in the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2016 ("Amendment Regulations"). In an attempt to keep the rules pertinent to modern-day recruiters in years to come, the Amendment Regulations impose a requirement on the Secretary of State to review and report on the operation of the Conduct Regulations every five years, with the option to revoke or amend them.

What will change?

Advertisements

There will be a ban on agencies and employment businesses from publishing a "relevant recruitment advertisement" in an EEA state other than the UK, unless:

  • advertisement is published in English in Great Britain at the same time it is published in the EEA state; or
  • the advertisement has been advertised in English in Great Britain for a period of 28 days ending with the day on which it advertises the vacancy in the other EEA state.

The newly coined term "relevant recruitment advertisement" means either an advertisement in respect of a vacancy for which the duties are ordinarily to be performed in Great Britain or an advertisement by which the agency or employment business is seeking work-seekers that are looking for a job for which the duties are ordinarily performed in Great Britain.

Other changes

The following restrictions have been removed:

  • Agencies and employment businesses purporting to act on different basis, for example telling a work-seeker that the recruiter is an agency and telling the hirer that the recruiter is an employment business
  • Entering into contracts on behalf of a client. Lifting this restriction means that an employment business can enter into contracts on behalf of its clients from all industries (previously, employment businesses were only allowed to do this with the likes of actors, musicians, artists, film editors, models and sports persons)
  • Requiring employment businesses to enter into written terms and conditions before supplying any services to hirers. The removal of this restriction significantly speeds up the hiring process
  • Requiring agencies or employment businesses to ascertain that any other employment agency or business they enter into a contract with is suitable to act in that capacity and the requirement to agree in what capacity each of them will act.

The new rules regarding advertisement is aimed at opening up employment opportunities for UK residents and the additional cull of restrictions is to allow the recruitment of work-seekers to be less onerous on agencies and employment businesses.

The changes came into force on 7 May 2016, with the first Secretary of State review in five year's time.