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REC calls on Government to help crack down on phoenixing

REC calls on Government to help crack down on phoenixing

The REC has called on the Government to work with the recruitment industry to address concerns over companies repeatedly abusing insolvency procedures to write off debts and set up a new business - a practice known as phoenixing.

In a letter to the Department of Business, Innovation and Skills (BIS), the REC has drawn attention to this practice which has been raised by agencies during a number of recent REC On the Road events.

Commenting on the campaign to highlight this issue, Fiona Coombe, the RECs Director of Professional Services, said: There are occasions when it is quite legitimate for an agency that is in financial difficulty to file for insolvency. Where we have concerns are situations where this kind of phoenixing is used systematically and repeatedly, often leaving individual workers out of pocket. The REC already runs Companies House checks on all new corporate members and we are committed to working with Government inspectors on this issue.

On a general note, we must ensure that the current economic downturn does not jeopardise the progress we are making in terms of the overall perception of the industry. As well as addressing examples of bad practice, we must continue to take forwards a pro-active approach to enhancing professionalism such as the recent launch of Institute of Recruitment Professionals.

The RECs Serious about Standards campaign is also starting this week, its aim being to help members demonstrate to their clients the importance of delivering the highest possible levels of service especially during an economic downturn. The campaign will focus on six key elements of the RECs overall offering including professional standards and legal services.

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