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Baker Tilly reaction to Govt response on reforming regulation for the recruitment sector

Baker Tilly reaction to Govt response on reforming regulation for the recruitment sector

Recruitment Conduct Regulations

The Government has now published its response to the consultation into reforming the regulatory framework for the recruitment sector. Below are our views on the most important aspects of the government response.

The Good News

Definition of 'Employment Agency'

The Government acknowledges that clarity around which businesses the definition applies to is key to effective regulation in the sector. A further short consultation will be undertaken when this is drafted into the proposed legislation. Job boards will be excluded. Hopefully this will also scope out those businesses that are not engaged in placement of vulnerable workers, freeing them from unnecessary administrative burden whilst at the same time allowing the Government to direct its enforcement resources to where they are most needed.

Limited Company Contractor Opt Out

The Government will retain a provision for individuals who are limited company contractors to opt out of the regulations and engage with employment businesses and employment agencies, in a business to business relationship. This is particularly good news for professional staffing companies and those placing professional interim contractors. It is however disappointing that this seems set to remain an opt-out rather than an opt-in.

Publication of Information About Your Business

The Government does not intend to make it compulsory for employment agencies and employment businesses to publish information about their business. They appear to have accepted what many respondents confirmed to them that businesses already publish varying degrees of information and it should be left up to businesses whether they choose to publish information or not. This is a very welcome response in avoiding unnecessary bureaucracy.

The Bad News

Transfer Fees

New legislation will seek to prevent employment businesses from enforcing unreasonable terms on a hirer when a temporary worker takes up permanent employment with that hirer. It remains to be seen where the government will draw the line between reasonable and unreasonable, and it is disappointing that they are seeking to legislate an area which we feel is better left to free market forces.


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