Employment Agency Regulations

The UK Department of Business Enterprise and Regulatory Reform (BERR), in conjunction with the Recruitment & Employment Confederation and Equity, developed a set of regulations, "The Conduct of Employment Agencies and Employment Business Regulations 2003", which came into force on 6 April 2004. These regulations govern the conduct of the private recruitment industry and establish a framework of minimum standards that clients, both work-seekers and hirers, are entitled to expect.

A plain-language explanation of the regulations can be found in Personnel Today’s legislation guide on the regulations. You can also read about them (including their complete text) on the UK Department of Business Enterprise and Regulatory Reform's website. The new regulations are intended to promote flexibility and increase protection both for workers who find employment through agencies and for businesses that use them for permanent recruitment or temporary cover.

Professional Contractors Group had spent two years campaigning for an opt out clause to allow limited company contractors, who are often highly paid and highly skilled, to opt out of being covered by the regulations, yet prevent vulnerable workers being forced to do so. Their policy briefing on the agency regulations explains their position.

Now that the regulations have come into effect, the PCG, in its Preliminary Briefing for Limited Company Contractors, states that it expects that most of its members will want to opt out of the Agency Regulations. This is because they add little in the way of protection for the typical freelance contractor and yet will require the agency to treat the contractor more like a temporary worker than a business.

Before you are introduced to a client, an agency will ask you to clarify your position as to these regulations – whether you wish to remain covered by them in the same way as a temporary staffer would be – by formally indicating whether you opt out. It is, however, a contravention of the Act for any agency to require you to opt out of the Agency Regulations.