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Employment law guide

Employment Agencies

Employment agencies are regulated by the Employment Agencies Act 1973. This gives the Secretary of State the power to apply to an Employment Tribunal for an order prohibiting an individual company or partnership from running an employment agency for up to 10 years on the grounds of unsuitability, misconduct or other grounds.

The Act also makes it illegal to charge a fee for finding a job for someone except in certain cases such as au pairs, models and some jobs in the entertainment industry.

Regulations provide that: agencies have a duty of confidentiality; written statements of terms and conditions and information about the hirer’s business must be given to workers; workers can take direct employment from the hirer; payment of the worker cannot be conditional upon the agency being paid by their client.

Regulations make a distinction between on one hand an ‘employment agency’ that introduces workers to an employer and on the other hand an ‘employment business’ which employs a worker who is seconded to another business who hires their services.

The broad effect of the Regulations is as follows:

The Agency Workers Regulations 2010

The Agency Workers Regulations 2010 give agency workers an entitlement to equal treatment in respect of basic working and employment conditions after 12 weeks in a given job. The Regulations apply to England, Wales and Scotland (Separate regulations apply to Northern Ireland).

The Regulations apply to “agency workers” (definition based on that used in the Working Time Regulations 1998) finding temporary work through a “temporary work agency” (definition based on existing statutory concept of an “employment business”). They will not extend to those who are genuinely self-employed, working through their own limited liability company or employed on a managed service contract. The fact that a worker is contracted via an ‘umbrella company’ or other intermediary will not, however, result in his or her being outside the regulations’ scope.

The qualifying period is 12 calendar weeks regardless of working pattern (e.g. part-time as opposed to full-time). A new qualifying period will only begin if there has been a new assignment with a different hirer, a six week break between assignments or a new assignment with the same hirer is in a substantively different role.

To address the risk of abuse, there is a specific prohibition of patterns of assignments which are designed to prevent a worker acquiring equal treatment rights by moving him or her between a succession of substantively similar roles in the same organisation.