Conduct regulations – an opportunity for debate

Conduct regulations – an opportunity for debate

Vince Cable last week announced that a review of the regulatory regime in the recruitment sector will take place in the spring of 2012 and address the Conduct of Employment Agencies and Employment Business Regulations 2003 (“Conduct Regulations”).

This has been followed by an announcement by the Business Minister Ed Davey that a review of the Conduct Regulations 2003 is needed, referring to the possibility of scrapping, merging or simplifying them.

It is understood that the proposed consultation arises from the Red Tape Challenge, which allowed an opportunity for interested persons to respond on a whole range of employment regulations, specifically as to whether these regulations continue to serve a purpose and need to be retained.

The Association of Recruitment Consultancies (ARC), in its response to the Red Tape Challenge highlighted the need for a review of certain areas in the Conduct Regulations where improvements could be made to assist various sectors. External policy advisor for ARC Ben Grover said “ARC has made specific and targeted representations, in pursuance of its campaigns to change rules to allow for an extension of VAT margin only business for charities and the public sector, and to rule out unfairness in payment terms where an RPO is involved in a chain of supply.”

However, whilst general calls for an end to the Conduct Regulations may on the face of it appear attractive and headline grabbing, the drivers for a review should be open and transparent for all to see. Grover continued “At this stage those drivers are not altogether clear. There have already been two previous consultations with some changes made over the 8 year lifetime of these regulations. This would not rule out a further consultation, but in our experience agencies broadly speaking do not object to many of the rules, some of which marry up with common sense and good business practice.”

“The industry does need some regulation to retain its credibility and reputation and we should be very careful not to upset a regime that largely appears to work across the board. Subject to that an open debate and review is welcome. However it is worth the comment that if the aim is that cost to recruiters should be reduced, the value of that reduction should be balanced against the cost of having once again to change internal administration processes and contract terms after only recently having made changes due to the Agency Workers Regulations. Most recruiters simply want to get on with their business, so any change would need to be worthwhile”.