Revised
rules to govern employment agencies temp to perm fees
The Conduct of Employment Agencies and Employment
Businesses Regulations 2003 came into during 2004. The proposals
have been extensively revised since the first draft in 1999. Employment
Agencies have waited with some trepidation for the final rules. In
their completed form, they will actually have far less effect than
the Working Time Regulations (which amongst other things granted
a right to statutory holiday pay to agency staff) and the so called
IR35 rules, which eliminated the tax advantages of using a Limited
Company whilst working as an agency temp.
The new Agency rules will have little impact on
the architectural recruitment market for two reasons. Firstly, because
the main areas to be reformed already reflect the procedures which
are standard for agencies in this sector and secondly because the
rules are aimed at employment agencies operating in a radically different
environment from architecture.
The main changes are:-
THE ‘QUARANTINE PERIOD’
It has long been the practice of Employment
Agencies to charge a fee when a temp switches to the direct staff
of a client company (referred to throughout the new regulations
as the ‘hirer’). Under the new rules an agency must offer a hirer/client
the opportunity to either pay this fee, or give notice that the
temp will continue working in that capacity for a fixed period
of time. As the length of this fixed period however can be negotiated
freely it is unlikely to be of any great benefit to the hirer/clients.
A further near universal practice has been for
employment agencies to include a clause in their terms of contract
that a hirer/client must not re-employ a former temp within a
certain period (usually six months). This is to prevent the unscrupulous
from using the ‘temp to perm’ route to avoid agency fees. Under
the revised rules this so called ‘quarantine period’ is reduced
to a period of 8 weeks after termination of the temporary contract
if it runs beyond six weeks or fourteen weeks from commencement
for shorter assignments. While this may work against employment
agencies in theory, 8 weeks is a long time for an employer to
wait and an employee to occupy him/herself. Few employers would
risk having, what must be highly regarded as potential employee,
at a loose end for so long.
TIMESHEETS
A further provision of the new rules rather
curiously focuses on the issue of timesheets. The clause states
that agencies cannot withhold pay by insisting on documentary
evidence authenticated by the hirer. This appears to undermine
the widely used procedure of clearing payments via signed timesheets,
but on further examination and in context appears to be seeking
to stop agencies from withholding payment which is known to be
due for this reason alone.
PROFESSIONAL QUALIFICATIONS
Agencies will be required to obtain copies of
professional qualifications prior to submitting a candidate to
a hirer/client for consideration. However this only applies where
the appointee is required by law to hold certain qualifications
(e.g. doctors). Without entering the professional qualification
debate generally, architectural practice does not require staff
to be qualified by law to work in the role of an architect, albeit
without using the title.
CONFIDENTIALITY
Many commentators have claimed the new rules
tighten up alleged abuses of confidentiality resulting from the
practice of speculative CV forwarding. This is not correct in
so far as agencies are prevented from disclosure of personal
details only where they are doing so in circumstances that are
not concerning the finding of work. In short, candidates seeking
work should satisfy themselves that they are comfortable with
the conduct of the agency they choose to deal with. There is
however the necessity for candidates to (somewhat bizarrely)
confirm the wish the agency to look for work on their behalf
having already employed them.
Much of the new regulation repeats the 1976 regulations
it broadly replaces. In reality little will change. The absence of
any real trade body* or licensing of employment agencies means there
is minimal policing in any case and in the case of architecture is
simply not necessary.
The regulations are clearly aimed at the kind of
agencies who control a large pool of labour on behalf of a small
number of large scale employers. This kind of agency has in recent
years particularly, taken over large numbers of employees on behalf
of large corporate businesses and until recently offered considerably
poorer working conditions that those previously available with the
former employer now renamed the hirer. This trend is particularly
apparent in manufacturing and customer service. Architecture however
could not be more different. To suggest that the relatively small
and entrepreneurial employers in the sector require statutory protection
from employment agencies is laughable. Moreover, the workers operating
in this field are all highly educated and capable individuals with
significant earning power in the market.
The notes issued by the DTI along with these regulations
clearly illustrate the gulf between the agencies that the regulations
seek to curb and the high quality consultancy type recruitment firms
operating in architecture. The DTI states an average weekly wage
for workers surveyed prior to the drafting of the new rules, of £179.
An architect in practice in London can now easily gross over £800
in the same week.
