Employment Agency Rules
Revised rules to govern employment agencies temp to perm fees
The Conduct of Employment Agencies and Employment Businesses Regulations 2003 came into during 2004. The proposals have been extensively revised since the first draft in 1999. Employment Agencies have waited with some trepidation for the final rules. In their completed form, they will actually have far less effect than the Working Time Regulations (which amongst other things granted a right to statutory holiday pay to agency staff) and the so called IR35 rules, which eliminated the tax advantages of using a Limited Company whilst working as an agency temp.
The new Agency rules will have little impact on the architectural recruitment market for two reasons. Firstly, because the main areas to be reformed already reflect the procedures which are standard for agencies in this sector and secondly because the rules are aimed at employment agencies operating in a radically different environment from architecture.
The main changes are:-
THE ‘QUARANTINE PERIOD’
It has long been the practice of Employment Agencies to charge a fee when a temp switches to the direct staff of a client company (referred to throughout the new regulations as the ‘hirer’). Under the new rules an agency must offer a hirer/client the opportunity to either pay this fee, or give notice that the temp will continue working in that capacity for a fixed period of time. As the length of this fixed period however can be negotiated freely it is unlikely to be of any great benefit to the hirer/clients.
A further near universal practice has been for employment agencies to include a clause in their terms of contract that a hirer/client must not re-employ a former temp within a certain period (usually six months). This is to prevent the unscrupulous from using the ‘temp to perm’ route to avoid agency fees. Under the revised rules this so called ‘quarantine period’ is reduced to a period of 8 weeks after termination of the temporary contract if it runs beyond six weeks or fourteen weeks from commencement for shorter assignments. While this may work against employment agencies in theory, 8 weeks is a long time for an employer to wait and an employee to occupy him/herself. Few employers would risk having, what must be highly regarded as potential employee, at a loose end for so long.
A further provision of the new rules rather curiously focuses on the issue of timesheets. The clause states that agencies cannot withhold pay by insisting on documentary evidence authenticated by the hirer. This appears to undermine the widely used procedure of clearing payments via signed timesheets, but on further examination and in context appears to be seeking to stop agencies from withholding payment which is known to be due for this reason alone.
Agencies will be required to obtain copies of professional qualifications prior to submitting a candidate to a hirer/client for consideration. However this only applies where the appointee is required by law to hold certain qualifications (e.g. doctors). Without entering the professional qualification debate generally, architectural practice does not require staff to be qualified by law to work in the role of an architect, albeit without using the title.
Many commentators have claimed the new rules tighten up alleged abuses of confidentiality resulting from the practice of speculative CV forwarding. This is not correct in so far as agencies are prevented from disclosure of personal details only where they are doing so in circumstances that are not concerning the finding of work. In short, candidates seeking work should satisfy themselves that they are comfortable with the conduct of the agency they choose to deal with. There is however the necessity for candidates to (somewhat bizarrely) confirm the wish the agency to look for work on their behalf having already employed them.
Much of the new regulation repeats the 1976 regulations it broadly replaces. In reality little will change. The absence of any real trade body* or licensing of employment agencies means there is minimal policing in any case and in the case of architecture is simply not necessary.
The regulations are clearly aimed at the kind of agencies who control a large pool of labour on behalf of a small number of large scale employers. This kind of agency has in recent years particularly, taken over large numbers of employees on behalf of large corporate businesses and until recently offered considerably poorer working conditions that those previously available with the former employer now renamed the hirer. This trend is particularly apparent in manufacturing and customer service. Architecture however could not be more different. To suggest that the relatively small and entrepreneurial employers in the sector require statutory protection from employment agencies is laughable. Moreover, the workers operating in this field are all highly educated and capable individuals with significant earning power in the market.
The notes issued by the DTI along with these regulations clearly illustrate the gulf between the agencies that the regulations seek to curb and the high quality consultancy type recruitment firms operating in architecture. The DTI states an average weekly wage for workers surveyed prior to the drafting of the new rules, of £179. An architect in practice in London can now easily gross over £800 in the same week.
For a copy the proposed regulations go to
*The are a number of self proclaimed trade bodies, however none have any formal recognition or represent more than a minority of recruitment businesses.