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Regulated businesses

Employment agencies and employment businesses

Content:


Introduction


Employment agencies and businesses in Great Britain

  Types of business covered

  Safeguarding of children and vulnerable adults

  Conduct of business regulations

  Enforcement
 
Northern Ireland


Gangmasters (UK)

 Agricultural work definition

 Gangmasters Licensing Authority

  Enforcement

 

Introduction

The carrying of an employment agency and an employment business (as defined) is regulated in Great Britain and under separate legislation in Northern Ireland.

There is also UK wide legislation relating to 'Gangmasters' in relation to providers of workers to carry out certain kinds of agricultural and fisheries work.

Employment agencies and businesses (England and Wales, Scotland)


Employment agencies and employment businesses are regulated under the Employment Agencies Act 1973 (EA) and the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (2003 Regulations).

Types of businesses covered

Employment agency: means the business (whether or not carried on with a view to profit and whether or not carried on in conjunction with any other business) of providing services (whether by the provision of information or otherwise) for the purpose of finding persons employment with employers or of supplying employers with persons for employment by them.

Employment business: means the business (whether or not carried on with a view to profit and whether or not carried on in conjunction with any other business) of supplying persons (being persons in the employment of the person carrying on the business) to act for and under the control of other persons in any capacity.

Safeguarding of children and vulnerable adults

A personnel supplier who is considering whether to supply an individual to an employer and knows, or has reason to believe, that the employer will make arrangements for the individual to engage in 'regulated activity' relating to children or vulnerable adults, must ascertain that the individual is not barred from the activity concerned before supplying the individual.

The check must be carried out with the Disclosure and Barring Service ('DBS').

Conduct of business


The Conduct of Employment Agencies and Employment Businesses Regulations 2003 provide that employment agencies and employment businesses must abide by certain general obligations relating to their dealings with work seekers and hirers including:


* notify work-seekers of their charges and of the terms of any offers or gifts made to induce work-seekers to engage a particular agency or employment business;


* obtain the agreement of work-seekers and hirers to the terms which apply or will apply as between the particular agency or employment business and the work-seeker or hirer;


* satisfy specified requirements in relation to the introduction or supply of work-seekers to hirers;


* comply with certain requirements as to advertising, client accounts, charges to work-seekers, confidentiality and the keeping of records. Special provision is made for situations where more than one agency or employment business is involved, and where work-seekers are provided with travel or required to live away from home.

What’s new items [go to What’s new? page or archive for more details]:

25/02/2016: Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2016

SI 2016/510: Existing legislation is amended to reduce certain regulatory burdens on employment agencies and employment businesses by omitting some of the regulations while continuing to protect work-seekers. Additionally, generic recruitment advertising, as well as advertising to fill specific posts, are brought within the prohibition related to advertising elsewhere in the EEA. These changes come into effect on 8 May 2016. During his speech on immigration on 21 May 2015, the Prime Minister made a commitment that the government would make it illegal for employment agencies to recruit solely from abroad without advertising those jobs in Britain and in English. Although the existing legislation goes some way towards this, with a prohibition that relates to advertising specific vacancies in other EEA States, the new changes will widen the provision.

The amendment will widen the provision to include generic recruitment campaigns in the EEA. UK immigration rules already favour native workers over non-EEA workers through the requirement for each position to undergo a ‘Resident Labour Market Test’ prior to being advertised outside the EEA. Further, burdensome legislation is removed where possible to give employment agencies and businesses greater freedom in the way they work, while retaining sufficient protections for the work-seekers.

22/12/2014: British jobs must be advertised in GB before or at same time as elsewhere in EEA

The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2014 (SI 2014/3351) amend with effect from 5 January 2015 the current regulations* so that employment agencies and employment businesses will be required to advertise jobs in English in Great Britain before (but no more than four weeks before) or at the same time as advertising them elsewhere in the EEA.

The new prohibition does not apply to employment agencies or businesses, or any other business, directly recruiting their own staff.

BIS and the Employment Agency Standards Inspectorate


Government guidance is available on the regulation of Employment Agencies and Employment Businesses Regulations..

Enforcement

Civil enforcement

Failure to comply with, any of the provisions of the Employment Agencies Act 1973 or of the by an agency or employment business is actionable so far as it causes damage. 'Damage' for this purpose includes the death of, or injury to, any person (including any disease and any impairment of that person's physical or mental condition.
[ Conduct of Employment Agencies and Employment Businesses Regulations 2003 reg.30]


If any term of a contract is prohibited or made unenforceable by the Regulations, the contract shall continue to bind the parties to it if it is capable of continuing in existence without that term. If a hirer pays any money pursuant to a contractual term which is unenforceable by virtue of regulation 10, the hirer is entitled to recover that money.
[Conduct of Employment Agencies and Employment Businesses Regulations 2003 reg.31]

On application by the Secretary of State, an Employment Tribunal may make an oder prohibiting a person from carrying on an employment agency or employment business (a prohibition order). There is a published List of people banned from running an employment agency or business

 

Criminal enforcement:

A person who, without reasonable excuse, fails to comply with a prohibition order is be guilty of an offence and liable on conviction on indictment, to an unlimited fine.The same penalty applies in the case of contravention of the 2003 Regulations [EA s.5]

A personnel supplier commits an offence if he supplies an individual to an employer and he knows or has reason to believe that:
* the employer will make arrangements for the individual to engage in regulated activity from which the individual is barred; and
* and he knows or has reason to believe that the individual is barred from that activity.

A person guilty of this offence under this section is liable on conviction on indictment, to imprisonment for a term not exceeding five years, or to a fine, or to both. [Safeguarding Vulnerable Groups Act 2006 s.19]

There is provision for Director's criminal liability  in relation to the above offences.

Northern Ireland


Employment agencies and businesses must comply with the Employment (Miscellaneous Provisions) (NI) Order 1981 (as amended), the Employment (Miscellaneous Provisions) (Northern Ireland) Order 2005 and the Conduct of Employment Agencies and Employment Businesses Regulations (NI) 2005 (SR 2005/395) (as amended).

Further information is available from the Northern Ireland government website.

What’s new items on this topic [see What’s new page or archive for full item]:

25/02/2016: Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2016

This draft Statutory Instrument if passed is intended reduce certain regulatory burdens on employment agencies and employment businesses by omitting some of the regulations while continuing to protect work-seekers. Further, generic recruitment advertising, as well as advertising to fill specific posts, are brought within the prohibition related to advertising elsewhere in the EEA.

Gangmasters (UK)


The activities of persons who supply workers to carry out certain kinds of agricultural and fisheries work ('gangmasters') are regulated by the Gangmasters (Licensing) Act 2004 applicable throughout the UK. The work to which the legislation applies is agricultural work, the gathering of shellfish, and the processing or packaging of any produce derived from agricultural work or shellfish, fish or products derived therefrom.

Agricultural work definition


* “Agricultural work” (see the Gangmasters (Licensing) Act 2004 s 3(2)) includes work in dairy-farming, the production for the purposes of any trade, business or other undertaking (whether carried on for profit or not) of consumable produce (ie produce grown for sale, consumption or other use after severance from the land on which it is grown), the use of land as grazing, meadow or pasture land, the use of land as an orchard or as osier land or woodland, and the use of land for market gardens or nursery grounds.


* “Shellfish” means crustaceans and molluscs of any kind, and includes any part of a shellfish and any (or any part of any) brood, ware, halfware or spat of shellfish, and any spawn of shellfish, and the shell, or any part of the shell, of a shellfish.

A person acts as a gangmaster if he:


* supplies a worker to do applicable work for another person;


* uses a worker to do applicable work in connection with services provided by him to another person;


* for the purposes of a business carried on by him, uses a worker to harvest or otherwise gather agricultural produce, to process or package agricultural produce so harvested or gathered, or to gather shellfish, so far as such work is applicable work.

Gangmasters Licensing Authority


The Gangmasters Licensing Authority ("GLA") administers the licensing scheme. Persons who wish to apply for a Gangmaster Licence must comply with certain standards aimed to protect workers from poor treatment and exploitation.


Licences: the Gangmasters (Licensing Conditions) Rules 2009 lay down the required standards cover issues such as working hours, training, terms and conditions, the national minimum wage and transport to ensure labour providers meet the basic safety and welfare standards.


There are also conditions attached to the licence holder (which may be an individual or legal entity) and the “Principal Authority” to check they are ‘fit and proper’ to hold a licence. The Principal Authority is the individual responsible for the day to day management of the business, and responsible for signing the declaration of the completed application form on behalf of the business.

Applications to the GLA and further information


Information on applications for a Gangmasters licence is available from GOV.UK. and from Defra.

Tacit consent: it would appear that tacit consent is not applied to the GLA procedure in the statutory regulations nor in the GLA’s administrative arrangements.

Appeal: there is a right of appeal to the First-tier Tribunal against a refusal or revocation of a licence, or the imposition of additional conditions. [In principle, any failure to apply the requirements of tacit consent should also be remediable by an appeal].

Enforcement

Civil enforcement: in the event of failure to comply with the standards, the GLA may impose additional conditions on a licence or revoke a licence.
Private actions: any contravention of, or failure to comply with, any provision of the Gangmasters (Licensing Conditions) Rules 2009 (including the conditions in the Schedule) by a licence holder is, so far as it causes damage, actionable by a private individual who proves he ha suffered loss or damage as a result of the contravention.

Criminal enforcement: the offence to operate as a gangmaster without a licence carries a maximum penalty of ten years imprisonment and a fine. The offence of using an unlicensed gangmaster carries a maximum sentence of 51 weeks imprisonment and a fine or (in Scotland and Northern Ireland) six months imprisonmentand a fine. There is provision for [Director’s criminal liability].

What’s new items on this topic [see What’s new page or archive for full item]:

10/04/2014: Gangmasters Licensing Authority to become part of the Home Office

The Gangmasters Licensing Authority (GLA) became part of the Home Office from 9 April 2014. The Government states that this will put it directly alongside the National Crime Agency’s considerable resources, strengthening its enforcement and intelligence capabilities. The GLA was previously an agency of the Department for Environment, Food and Rural Affairs.

[Page updated: 005/01/2017]

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