Red Tape or Opportunity?

Regulation of the Recruitment Industry – Red Tape or Opportunity?

By Fiona Coombe of Foresight Law

The recruitment industry is a relatively young industry which has achieved immense growth in the 40 years since it was first regulated – the Employment Agencies Act was passed on the 18^th July 1973. It saw its biggest period of growth after licensing was removed in 1995, expanding from an industry turnover estimated to be around £3bn in 1993 to a turnover of £23bn in 2003 (REC Annual Survey).

How much this expansion had to do with regulation or de-regulation is not clear. Of course this period also coincided with the expansion of private enterprise and the reduction in power of the unions coupled with steady economic rises after a period of recession.

From my viewpoint law and regulation has had a lot to do with the shape of the industry in recent years. When I started working with recruiters in 1998 the only legislation one had to contend with were the 1976 Conduct of Employment Agencies and Employment Businesses Regulations and tax law requiring most temps to be on PAYE. What followed in the years of the Labour Government was an onslaught of legislation, much led by the Social Charter reforms from Brussels but also home-grown tax laws racing to keep pace with innovations in the staffing sector.

Back in 1998 the ‘recruitment industry’ involved employment agencies and employment businesses. Now it encompasses temp and perm agencies, recruitment process outsourcing providers, master and neutral vendors and a supporting network of freelance and contracting, payroll and funding service providers.

We are currently awaiting the Government’s Response to the responses to the consultation earlier this year on the future regulation of the industry in early July. The industry has an opportunity to influence Government in a way that it couldn’t when the Conduct Regulations were last overhauled in 2003 due to an entrenched ideological attitude to the private recruitment industry which has long disappeared.

I will be urging recruiters at the Recruitment International Audit and Compliance event on the 2^nd July in Manchester to debate what we want from Government and not to sit back and wait for what they have in store for us.

It is an opportunity to consider

·         How much regulation does the industry need?

·         Should it come from Government or are recruiters mature enough to do it for themselves?

·         What is the ‘industry’ that future regulation should cover?

Sign up to be part of the debate: [Insert RI event link]

Foresight Law provides legal advice on recruitment and employment issues and provides bespoke compliance training for recruitment businesses.

If you would like to seek advice on any of the matters raised by this newsletter or any other issue faced by your business, or you would like to arrange for some training on these and other compliance matters please call or email Fiona at Foresight Law.