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Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2016

Volume 769: debated on Tuesday 22 March 2016

Motion to Consider

Moved by

That the Grand Committee do consider the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2016.

My Lords, our manifesto promised to help businesses to create 2 million new jobs over this Parliament. To meet this, we need a strong and efficient labour market that gives people opportunities to find jobs that are right for them and allows employers to access the right type of labour that matches the skills that they need. We need to make sure that it is fair and that workers in Great Britain have the same access to job opportunities as those elsewhere. The recruitment sector plays an important role in the labour market by matching demand for jobs to demand for workers. According to the Office for National Statistics in 2014, there were around 19,400 employment agencies and employment businesses within the recruitment sector.

The sector is regulated by the Employment Agencies Act 1973 and the Conduct Regulations. Last year the Government consulted on a package of measures—building on the previous consultation during the coalition Government—to remove a number of the business-to-business regulations, and at the same time to strengthen the existing legislation that prevents employment agencies and businesses from advertising jobs in other EEA countries without advertising them in Great Britain and in English.

It is important that we reduce the regulatory burden on employment businesses and employment agencies as far as possible, while increasing the opportunities for workers in Britain to apply for jobs that are based in Britain. However, we also need to balance the need to reduce the burden on business with maintaining all the fundamental protections for agency workers that these regulations ensure. None of these regulatory changes undermines worker protections. We are not changing any regulations that entitle them to be paid for all the hours they work, and they will still be protected from being charged fees for work-finding services.

Regulation 9 of the Conduct Regulations currently prevents employment agencies and employment businesses from claiming to be acting on one basis to the work seeker while stating something different to the hirer. We are removing this provision as there is little evidence that it serves a useful purpose. We do not need free-standing regulation to underpin a standard that would be enforceable to some extent through contract law—or, in cases of fraud, through the general criminal law.

Regulation 11 ensures that agencies and businesses cannot enter into a contract with a hirer on behalf of a worker, and vice versa. It currently applies to all employment agencies and employment businesses but is relevant mainly to those operating in the entertainment and modelling sector. We are removing this regulation as we consider that there are sufficient protections elsewhere in the provisions specifically relating to those sectors.

Regulation 17 currently requires employment businesses to obtain agreement to terms with hirers. While it is important for employment businesses to agree terms with hirers, we believe that this already happens in practice and it is not for the Government to prescribe the terms of any business contract. Failure to do so should not be subject to a criminal penalty, as is the case currently. We therefore propose to remove this regulation.

Regulation 23(1) covers situations where more than one agency or employment business is involved in the supply of a work seeker. We propose to remove the provision that requires agencies and businesses to make checks on one another. Where employment agencies or businesses are involved in this kind of arrangement, we are also proposing to remove the requirement that they agree the capacity in which they are acting. We also propose to amend Schedule 4 to remove the requirement to include certain particulars in records kept by employment agencies and businesses relating to work seekers. These records will no longer need to include the date the application was received, details of any requirements specified by the work seeker in relation to taking up employment, and the date the application was withdrawn or the contract terminated.

The final deregulatory measure we propose is to amend Schedule 5 and remove Schedule 6 of the regulations to reduce the regulatory burden in relation to record keeping. These are the requirements to include certain particulars in records kept by agencies and businesses relating to the hirer. These records will no longer need to be as comprehensive and the removal of this requirement will have no detrimental effect on work seekers. The amendments proposed to Schedules 4 and 5, and the removal of Schedule 6, will reduce the burden of unnecessary record keeping on agencies and businesses, while having no detrimental impact on the protection of workers.

We are also proposing to extend the current Regulation 27A, which prevents employment agencies and businesses from advertising specific vacancies for a job based in Great Britain in other EEA countries without advertising it in Great Britain, and in English, either before or at the same time. We propose to extend the regulation so that it will apply to generic recruitment campaigns carried out by employment agencies and businesses. This will close a loophole that currently exists and increase the opportunities for workers in Britain to apply for all jobs that are based in Great Britain. We are not proposing to stop agencies recruiting from overseas or in additional languages.

This package of measures will both reduce the burden on business and increase job opportunities for workers in Great Britain. I hope that noble Lords will feel able to support the regulations.

My Lords, I am, again, very grateful to the Minister for introducing this statutory instrument and for giving us such a full context in which it is operating. I have slightly more trouble with this one than I had with the last one, in three regards. The first is just to check that I am not missing something. The problem said to be under consideration appears in the helpful Explanatory Memorandum which is attached to the impact assessment. It states:

“The United Kingdom has one of the most lightly-regulated labour markets in the developed world for permanent employees. It is also the third least regulated labour market after Canada and the US in terms of temporary contracts”.

That seems to be quite a good situation, but we read further down:

“The Employment Agencies Act 1973 sought to ensure that there was a consistent approach across Great Britain”.

It gives the reasons for that—there were, I think, a number of scandals at the time and it is good that the Government of the day decided to legislate in this way. It goes on:

“Since then there have been many amendments to the legislation, which has resulted in a very complex set of regulations which place a burden on business, and are not fit for purpose in the UK’s modern labour market”.

The Government cannot have it both ways: it is either one of the most lightly-regulated labour markets in the developed world or it is a very complex set of regulations which place a burden on business and are not fit for purpose. I am not accusing the Minister in any sense of bad faith—I am sure she spoke absolutely from the heart about what she was trying to do—but perhaps she will reflect after this on the bombastic nature of the briefing with we have been provided, because I do not think that it stacks up.

My second point is an exemplification of that. I stray here into politics, which I know is almost a forbidden thing to do here. But we are told in paragraph 7.1 of the Explanatory Memorandum, headed “Policy background”—a very helpful innovation—that the reason we are amending Regulation 27A of the Conduct Regulations 2003 is that,

“there was a specific commitment from the Prime Minister during his speech on immigration on 21 May 2015 that the Government would make it illegal for employment agencies to recruit solely from abroad without advertising those jobs in Britain and in English”.

That sounds good—it must have been a wonderful soundbite to have prepared, ready to be picked up by the papers at the time. As we read on, the truth is that existing Regulation 27A goes some way towards resolving the problem that the Prime Minister identified, since it is already illegal to advertise specific—not generic—vacancies in other EEA countries without also advertising them in English in the UK.

Again, I do not wish to make a major point, because presumably some people will benefit from the fact that a generic advertisement placed not in English in Lithuania will now have to be placed in English in the UK. I do not want to demean that in any way but, again, I wonder about the tone being adopted here. It did not need to be quite as bombastic as it is. I am sure that the gap has been filled and that is a good thing.

My third point is a very trivial one but I would like an explanation. On the question of implementation and review—my favourite topic—the noble Baroness will be aware that I have an interest in common commencement dates. I was doing all right on this one until I got down to Regulation 1(2), which says:

“These Regulations come into force on … 6th April 2016”.

I like that. It is one of the two common commencement dates for reducing the burden on business. However, it goes on to say that,

“if later, at the end of the period of 21 days beginning with the day on which they are made”.

You cannot have it both ways. It is either a common commencement date or it is not. As we seem to be ahead of 6 April, can I have confirmation from the Minister that we are talking about 6 April and that the conditional phrasing was just a cover in case something went wrong in the great process that we are going through.

Finally, I notice that the review period is covered in the sense that there seems to be a series of reviews stemming from the 2003 regulations, which are said to be in Parliament every five years. The Explanatory Memorandum does not seem to imply that there will be any other reviews going forward. The provision of the existing regulations seems to be for one review and one review only. I just want clarification about the date. It may well be otiose to have a periodic five-year review, but I think that we should be clear whether there is to be a review—and, if so, whether it is a single review after five years or a periodic review.

I thank the noble Lord for his extremely intelligent questioning of this proposal. I agree that there is a dichotomy. The regulations are quite complex, and we are seeking to change them so that they are deregulatory. I tried to take the noble Lord through paragraph by paragraph because I felt that that was useful to the Committee. At the same time, I think that the memorandum is correct to say that the UK is more lightly regulated in respect of the labour market than other EU member states. So I do not think that the things are contradictory, although I can see that there is the potential for confusion there.

The regulations will come into force 21 days after the beginning of the day they are made. Unfortunately, it is not a common commencement date. Like the noble Lord, I am always asking the department to put things on a common commencement date. Obviously, given the timing, the common commencement date would have to move to October because I do not think that things can be done in time. Therefore, we are commencing the regulations 21 days after they are made, and I will make them tomorrow or the next day. Perhaps I should write to the noble Lord with more information about the conventions. Spiritually, I am with him—I think that common commencement dates are extremely helpful. We have tried to get one here but the timing has overtaken us.

I do not wish to pressure the noble Baroness in any way whatever, but we have previously had insolvency regulations which are quite clearly coming into effect on 6 April—no buts, no buttons, no relationship, no 21 days here, there or everywhere. They are coming in on 6 April.

I think that this has caused some confusion in our ranks. I will look into it, but I hope that the Committee will agree that these regulations should come in as soon as we can manage it. They are deregulatory, and I would like to pass them today. So I crave the indulgence of the Committee on this matter, but I will certainly look across the board at the phrasing of commencement dates in future. We always need to learn from feedback, and the noble Lord, as so often, makes a very good point.

I obviously did not explain the point about recruitment agencies adequately. The change we are making is on generic recruitment, which is not covered by the existing regulations. So we are essentially closing a loophole in the existing system of regulation, which currently just covers adverts for specific jobs—for example, an advert for a carpenter in Luton—but it does not cover generic recruitment. It should of course, so we are seeking to make that change.

In no sense do I wish to delay things, but my point was not that the change in itself is not a good thing—it is a good thing, and the loophole should be closed—but that the bombast had rather got ahead of the action.

We will watch our bombast for the future. Finally, the noble Lord knows that I feel the same way as him about the importance of periodic review. I will look at how the review clauses of relevant legislation interplay, and in coming back to him I will explain what our intentions are. With those reassurances, I commend the regulations to the Committee.

Motion agreed.