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Further attack on agency supply industry

Further attack on agency supply industry

The Government's review document on the Conduct of Employment Agencies and Employment Businesses Regulations 2003 published last week states that the Government intends to make changes to include a requirement for reasonableness if transfer fees are to be recoverable. Adrian Marlowe, chair of the Association of Recruitment Consultancies (ARC), said "The suggested change to the wording will undoubtedly place a very difficult burden on employment businesses and provide a significant advantage to hirers seeking to avoid payment.

The suggestion refers to wording already contained within the 2nd consultation proposals for regulations to implement the Agency Workers Directive (AWD). However Adrian Marlowe believes the explanation for the proposed new reasonableness test is confusing On the one hand we are lead to believe that it is a requirement of the AWD, which obliges the Government to take action to stop clauses that have the effect of deterring hirers from employing supplied workers. On the other hand this particular response document says that the measure is for reasons entirely separate from implementation of the AWD.

At a recent seminar run by the recruitment law specialist Lawspeed Karen Wilshaw, a Director at the Employment Relations Directorate at the Department of BIS, said that the reason is because the department receives some 25 complaints a month about the level of charges to hirers and that Government Inspectors want to be able to challenge them.

Adrian Marlowe went on to say if the reason is the AWD, the Directive does not require the change to be as draconian as suggested. If the reason is the number of complaints then this was news to us none of this was set out in the consultation document. Even if the complaints were all valid, which I doubt, 300 complaints a year pales into insignificance when you recognise that there are reported to be some 1.2 million agency workers on placement at any one time. This is not the way to deal with overcharging in the few cases that exist.

Whatever the reason, the current proposal will be a litigation lawyers dream come true and could largely kill temp to perm and temp to temp fees in a single blow, with further dangerous consequences. I challenge anyone to suggest otherwise and I strongly encourage everyone to wake up and smell the coffee. I urge agencies to join ARC in its resolve to fight this unfair and ill thought through proposal.

Government decision on company opt outs welcome

Lawspeed, the recruitment law specialist, welcomes the governments decision last week to retain the company opt out for contractors and umbrella companies.

Adrian Marlowe, Managing Director, said as architects of the opt out in 2002 we were concerned that the Government was losing site of the advantages that the opt out brings to the table and the reasons for the opt out in the first place. The freedom that commercial organisations have to choose how to operate, when it comes to regulations supposedly designed for their own protection, is a key principle, and I am very glad that the Government has listened to the representations we put forward during the recent consultation process.

I am also glad that various trade organisations chose to reflect our concerns and continue to recognise the benefit that the opt out brings. Retention of the opt out helps protect contractors tax status and is a point we refer to when representing our contractor clients to HMRC. In addition it simplifies an agencys administration, thus leaving all parties satisfied.

Crucially the Government did not remove the right to opt out from umbrella companies. Adrian continued there was a real fear the umbrella companies would be singled out. This would have been wrong in our view since it would have represented an interference into certain models for which there is a genuine commercial justification and left those organisations at disadvantage. This welcome decision leaves umbrellas on a level playing field with other types of incorporated organisations.

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