Download HR Pitfalls of Recruitment Agencies

HR Pitfalls of Recruitment Agencies
This guide explores the common HR pitfalls of recruitment
agencies and offers guidance on how to avoid legal liabilities.
Being able to outsource recruitment to external
to comply with these regulations can mean a
the employment agency and the work seeker once
agencies means a load of an employer’s mind.
financial penalty for the employer.
work had been found. Permanent work is found
However, recruitment agencies, by lightening the
with an employer for the work seeker rather than
burden on other employers, take on their own
The Regulations make the distinction between
temporary assignments, and this employer pays
set of HR responsibilities and obligations. In fact,
an employment business and an employment
the work seeker.
these types of businesses, technically known
agency. Employment businesses are companies
as employment businesses and employment
which enter into contract with work seekers to
Because an employment business maintains
agencies, have their own set of rules and
find them temporary assignments but maintain
an ongoing relationship with the work seeker,
regulations to abide by.
an ongoing relationship with the work seeker e.g.
they have more HR issues to consider. Certain
make payments to them (rather confusingly, this
employment rights apply to work seekers who
The Conduct of Employment Agencies and
situation is commonly referred to by the name of
sign up with an employment business because
Employment Businesses Regulations 2003 are
recruitment agency).
they fall into the category of ‘worker’, opposed to
concerned with implementing safeguards to
‘employee’ for the purposes of employment law. It
those working for employment businesses and
Employment agencies operate under a different
is the responsibility of the employment business to
set restrictions on charging arrangements. Failure
set up. There is no ongoing relationship between
ensure that work seekers:
Free Advice for Employers on
0800 028 2420
www.peninsula-uk.com
Page 1 of 3
Employment Law Guide for Employers
HR Pitfalls of Recruitment Agencies
employee would receive at the end user company.
at an end user company, is an employee of the
received
Pay is one of the areas in which equal treatment
employment business, and therefore not only has
payment from the end user company), otherwise
must be achieved and therefore the employment
the right to paid annual leave, national minimum
the work seeker could bring proceedings for
business should obtain information from the end
wage etc, but also the full set of employment
unlawful deductions;
user in order to ensure that the agency worker is
legislation including the right to a statement of
being paid in line with the Regulations.
main terms of employment, redundancy pay,
• Are paid for the work they do (even if the
employment
business
has
not
• Receive the statutory minimum of 5.6 weeks’
annual leave;
time off for dependants, maternity leave not to
The Agency Worker Regulations contain an
• Stay within maximum working hours; and
be unfairly dismissed, etc. It also does not act to
exemption to the equal treatment obligation, and
remove all obligations under the Agency Worker
• Receive at least the national minimum wage,
this can be achieved by engaging agency staff on
Regulations. It is important, therefore, for the
and the national living wage from April 2016.
the Swedish Derogation Model. This means that
employment business to assess exactly how they
the agency worker does not need to be paid on
wish to engage individuals.
The Agency Worker Regulations 2010 also placed
equal terms as a direct hire, however, must be paid
additional employment law related responsibilities
in between assignments where no work is offered.
The basis of an employment business relationship
on
2010
However, engaging someone on the Swedish
with the work seeker is to provide temporary
Regulations provide for agency workers to receive
Derogation Model ensures that the individual,
assignments with an end user. The obvious
equal treatment in some areas as a directly hired
although continuing to be placed on assignments
effect of this is the exposure that the work seeker
the
employment
business.
The
Free Advice for Employers on
0800 028 2420
www.peninsula-uk.com
Page 2 of 3
Employment Law Guide for Employers
HR Pitfalls of Recruitment Agencies
will have to the end user, who may then decide
to offer the work seeker a permanent job in their
organisation, cutting out then need for the work
seeker maintain the ‘agency’ relationship with the
employment business. The employment business
is not permitted to prevent the work seeker
from taking a permanent job with the end user
company at which they had been on a temporary
employers. For example, it is currently a criminal
• Working for a competitor;
•Approaching his ex-employer’s clients or
prospective clients;
•
Working
with
ex-employer’s
clients
or
prospective clients even if they approached
him;
offence for an employment business to supply
temporary staff to an employer whose permanent
employees are on strike. It is not unlawful for an
employment agency to supply workers to such
an employer, however, the supply of workers
would be on a permanent basis. The restriction on
employment businesses is likely to be removed
• ‘poaching’ his ex-employer’s employees.
under current Government plans as part of a
assignment with.
Ensuring that the employee must wait until a
Protecting the employment business’ or agency’s
certain time period has passed until they can act
interests in terms of its own employees is a
in these ways enables employers to keep their
separate issue. Restrictive covenants can be put in
current sensitive information e.g. client lists and
place, provided they are agreed with employees,
charging structures to themselves.
reform of trade union legislation as a whole.
which can limit the actions of an employee for
a defined period of time once they have left an
The Conduct of Employment Agencies and
organisation. Specifically, it is possible with a well
Employment
drafted covenant, to prevent employees from:
many other restrictions on the operation of these
Businesses
Regulations
place
Free Advice for Employers on
0800 028 2420
www.peninsula-uk.com
Page 3 of 3