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  EMPLOYMENT AGENCIES ACT 1973 AND REGULATIONS

Introduction

This webpage gives general guidance on the Employment Agencies Act 1973 and regulations. It should not be regarded as an authoritative interpretation of those provisions.

Copies of the legislation are available from your nearest branch of The Stationery Office (TSO) or through TSO Accredited Agents (see Yellow Pages). Anyone operating or considering operating an employment agency or employment business is strongly advised to obtain copies. If you wish to know more please contact the Employment Agency Standards Inspectorate.

The Employment Agencies Act 1973 (as amended by the Employment Protection Act 1975 and the Deregulation and Contracting Out Act 1994) sets minimum standards of conduct for employment agencies and employment businesses operating from premises in Great Britain.

All employment agencies and employment businesses must comply with the provisions of the Act and the regulations made under it. The provisions are designed to protect the interests of job seekers and employers using employment agency or employment business services.

An employment tribunal may, on application by the Secretary of State, make an order prohibiting a person from carrying on an employment agency or employment business.

Who the Act applies to

The Act applies to employment agencies and employment businesses whether they are carried on by commercial concerns for profit or by non-profit-making bodies. This includes those that deal with au pairs and with freelance or self-employed workers as well as those that deal only with workers on a normal contract of employment.

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Employment agencies
Under the Act an 'employment agency' is defined as the business of providing services (whether by the provision of information or otherwise) for the purpose of finding workers employment with employers or of supplying employers with workers for employment by them. The Act thus applies to a wide range of agencies, from the familiar recruitment agency, through a range of specialist agencies to entertainment and model agents, the executive selection functions of management consultants and executive search consultants.

Employment businesses
The other kind of activity covered, the 'employment business', is defined as the business of supplying people in the employment of the person carrying on the business, to act for, and under the control of, other people in any capacity.

This covers the hiring out of workers on a temporary basis and is frequently called 'temping'. It has long been associated with the supply of temporary secretarial and other office staff, but has extended into many other areas, including professional and industrial occupations.

The Act does not extend to sub-contracting i.e. independent contractors undertaking specific tasks using their own staff acting and remaining under their direction and control.

Those excluded from the scope of the Act

The following are excluded from the scope of the Act:

  • services provided by university appointments boards and certain other educational institutions, by local authorities, by trade unions, employers' organisations and certain professional bodies for their members or by charitable organisations.

  • services for qualified nurses and certified midwives (N.B. agencies supplying these services are subject to licensing and control under the Nurses Agencies Act 1957 (in England and Wales) and the Nurses (Scotland) Act 1951. Licensing and enforcement are carried out by local authorities);

  • certain services provided exclusively for ex-members of HM Forces or for persons released from prisons or from other institutions;

  • the hiring out of workers as an ancillary to the letting out on hire of an aircraft, vessel, vehicle, plant or equipment (for example a chauffeur-driven car-hire service or the hire of construction plant with an operator).

Fees

Employment agencies and employment businesses are prohibited from charging fees to workers for finding or seeking to find them jobs.

The exception is the finding of jobs for performers and certain other workers in the entertainment field and photographic or fashion models. This exception is subject to certain limitations set out in regulations (see the Employment Agencies Act 1973 (Charging Fees to Workers) Regulations 1976 (SI 1976 No 714)).

An agency which uses the services of an agent abroad in finding a post for an au pair outside the United Kingdom is allowed to charge a fee to the au pair for finding the position, but the fee must not exceed 40 and cannot be charged until the au pair has accepted the post offered (see the Employment Agencies Act 1973 (Charging Fees to Au Pairs) Regulations 1981 (SI 1981 No 1481)).

The Act does not regulate the fees charged to employers by employment agencies and businesses or the rates paid by employment businesses to workers employed by them.

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Standards of Conduct

Regulations have been made by the Secretary of State under section 5 of the Act for the conduct of employment agencies and businesses (see the Conduct of Employment Agencies and Employment Businesses Regulations 1976 (SI 1976 No 715)). These set the standards to be met.

Employment agencies
The following is a list of the principal duties and obligations placed on employment agencies.

General
Employment agencies:

  • must obtain adequate information from employer and worker clients for the purpose of selecting a suitable worker for a vacancy and vice versa;

  • must not disclose information about employers and workers other than for the purpose of finding people jobs or supplying employers with workers, except with the written consent of the worker or employer who gave the information or in certain other specified circumstances;

  • must make enquiries to ensure that workers possess any necessary qualifications required by law (such as a heavy-goods vehicle driving licence in the case of a lorry driver or appropriate qualifications in the case of a pharmacist or doctor);

  • must ensure that the worker and employer are aware of any conditions imposed by law which must be satisfied by the worker or employer (such as the need for a work permit or a variation of landing conditions in the case of an overseas worker) and that the employment (whether in the United Kingdom or abroad) will be legal;

  • must not offer workers financial benefit or benefit in kind to persuade them to use their services;

  • must not approach a worker already placed by them in employment for a fee with a view to arranging employment for the worker with another employer (except with the agreement of the present employer).

Advertisements
Employment agencies:

  • must make it clear in advertisements and business letters that they are employment agencies;

  • who issue an advertisement offering a service of information about jobs must, if they have no authority from an employer to find workers for such jobs, state this fact in the advertisement.

Fees
Employment agencies:

  • must on receipt of an application from an employer client, immediately provide a clearly legible written statement of current terms of business (unless this has previously have been given) including a scale of fees, the circumstances in which rebates are payable and the scale of such rebates or, if it is the case, a statement that rebates are not payable;

  • if allowed to charge a worker a fee for finding or seeking to find him or her employment, must, before providing this service, give the worker a clearly legible written statement detailing current terms of business;

  • where proposing to charge a worker a fee for services other than job finding, must, before providing services, give the worker a clearly legible written statement detailing the service and the proposed charge;

  • must not make the provision of job-finding services conditional upon the worker using other services for which the agent is not prevented by the Act from charging a fee.

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Young people under eighteen
Employment agencies:

  • must not introduce to an employer a young person who is attending, or has just left school, unless they have made appropriate enquiries to find out whether the young person has received vocational guidance from the local careers service (this regulation does not apply to employment outside school hours, if the young person is still at school);

  • before arranging employment abroad for a young person, or employment in the United Kingdom for a young person from abroad:

  • must obtain written consent directly from a parent or guardian;

  • must make appropriate enquiries to ensure that suitable accommodation has been arranged at an appropriate price which is acceptable to the young person; and

  • must ensure that, when the employment is for a fixed term, proper return-fare arrangements are made to cover the possibility of the employment not beginning or of it finishing during the first ten weeks.

Employment abroad and employment of workers from abroad
Employment agencies:

  • must obtain satisfactory written testimony that any employment agent used in another country is a suitable person and not prohibited by the law of that country from acting as an agent;

  • must not arrange employment abroad for a worker with an employer who has no business premises in the United Kingdom, unless satisfactory written testimony has been obtained which states that the proposed employment will not be detrimental to the worker's interests;

  • must obtain two character references for any worker from abroad for whom it is proposed to arrange employment in the United Kingdom and make them available to the employer before a contract of employment s entered into. If this is impracticable in the time available, the employer must be informed. (N.B. this regulation does not apply to employment as a performer in the entertainment industry);

  • must not arrange employment for a worker coming to this country for a job, or going to a job abroad, if the rate of repayment of any advance of fare is one-eighth or more of the worker's basic weekly pay, or the total amount to be repaid is more than three weeks' pay in the job - an au pair arrangement must not be made if there is a requirement to repay fares out of pocket money payable by the host;

  • except in the case of urgent arrangements for fixed-term employment of less than fourteen days, must ensure that both worker and employer receive, before the worker's departure, a written statement in a language they understand, giving specified details of the employment or of the worker respectively.

Workers accepting jobs abroad should study the written statement carefully and ensure that they are clear about the terms and conditions of the employment before departure.

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Safeguarding clients' money
Employment agencies:

  • if they receive money on behalf of a worker client, must pay it directly to the worker within ten days of receipt or, if the worker has requested the agent in writing to hold money received from employers on the worker's behalf, must pay it into a special client account operated in accordance with rules set out in the regulations;

  • if an employer and worker authorise them to draw up the contract between them and payment is to be made through the agent, must ensure that the contract is in writing in one document and that a copy is supplied to both parties.

Records
Employment agencies:

  • must maintain certain records, including records of information about workers and employers.

Employment businesses
The principal duties and obligations imposed on employment businesses (temporary staff contractors) are as follows:

General
Employment businesses:

  • before entering into a contract with a hirer, must inform the hirer of their current terms of business, including the procedure if a worker supplied is unsatisfactory, any fee payable if the hirer takes the worker into his or her direct employment and whether workers supplied are employees of the employment business or self-employed - a clearly legible written statement of these terms must be sent to the hirer within twenty four hours of the first worker supplied commencing work;

  • must obtain adequate information from a hirer about the work to enable a suitable worker to be selected;

  • must give to a worker on entering their employment full details in writing of the terms and conditions of employment, including whether he or she is under contract of service or is self-employed, the kind of work he or she may be supplied to do and the minimum rates of pay for such work; subsequent changes agreed by the worker must also be given to him or her in writing;

  • must, before supplying a worker to a hirer:

  • give the worker all available information about the nature of the hirer's business, the kind of work and the hours and rate of pay applicable and make appropriate enquiries to find out whether the worker has any qualification which is required by law for the work and that performance of the work (whether in the United Kingdom or abroad) will not contravene the law;

  • must not prohibit or restrict their workers in any way from entering the direct employment of a hirer and must not refuse to pay a worker because they have not been paid by the hirer;

  • must not supply workers to a hirer as direct replacement for employees who are in industrial dispute with the hirer, to do the work normally performed by those employees;

  • must not supply to a hirer a worker who within the previous six months was employed directly by the hirer (unless the latter consents in writing);

  • must not approach workers in employment to induce them to enter their employ for the purpose of being supplied to hirers.

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Advertisements
Employment businesses:

  • must make clear in advertisements and business letters that they are employment businesses;

  • when quoting rates of pay for workers to be supplied to hirers in an advertisement, must also state the nature of the work, its location and the minimum qualifications necessary to receive the rate of pay quoted;

  • when supplying workers to hirers on a self-employed basis only, must state this fact in any recruitment advertisement issued by them.

Work abroad
Employment businesses:

  • must not supply a worker to a hirer abroad who has no business premises in the United Kingdom unless satisfactory written testimony has been obtained which states that the work will not be detrimental to the worker's interests;

  • must not send a worker to a hirer abroad unless they have made arrangements to pay the worker's return fare themselves when the job ends or if the job does not commence, or else have obtained a written undertaking from the hirer to do so - if a hirer defaults on such an undertaking, the employment business must pay the return fare;

  • must supply the worker and the hirer, before the worker departs, with a written statement giving specified details of the work or of the worker respectively.

Records
Employment businesses:

  • must maintain certain records, including records of information about workers and employers.

Infringement of the Act and regulations

Anyone who:

  • contravenes the prohibition on charging fees to workers;

  • contravenes or fails to comply with any of the regulations made to secure the proper conduct of employment agencies and businesses;

  • makes, causes to be made, or knowingly allows false entries to be made in any record or document that has to be kept under the Act or regulations; or

  • fails without reasonable excuse to comply with a prohibition order

will be guilty of an offence and liable on summary conviction to a fine not exceeding 5,000.

In addition, any person who obstructs an officer in carrying out any enforcement functions will be guilty of an offence and liable on summary conviction to a fine not exceeding 1,000.

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Prohibition Orders

An employment tribunal may, on application by the Secretary of State, make an order prohibiting a person (which includes a company) from carrying on, or being concerned with the carrying on of, an employment agency or employment business for up to 10 years on the grounds that the person concerned is unsuitable because of misconduct or any other sufficient reason.

A prohibition order may:

  • prohibit a person from running an employment agency or business, or any description of employment agency or business specified in the order; or

  • impose certain conditions under which a person may be allowed to run an employment agency or business.

Code for Employment Agency Standards Inspectorate

The explanation of the law on this web page and the information in the sections which follow comprise our Code for the Employment Agency Standards Inspectorate.

The enforcement functions under the Act are carried out by visiting inspectors employed by the Employment Agency Standards Inspectorate. The Act enables our inspectors to enter premises which they have reason to believe are used for the purposes of an employment agency or business. They have powers to inspect the premises and any records or documents kept in accordance with the Act or regulations.

They may also require the production of such information as they may reasonably need to ascertain whether the Act and regulations are being complied with or to enable the Secretary of State to exercise his functions under the Act. All our inspectors carry official means of identification.

Our enforcement policy includes investigating as a priority any complaint about the conduct of an employment agency or employment business. Our inspectors also follow up other information about possible misconduct and undertake random checks.

If our inspectors find evidence of breaches of the Act or regulations, the next steps depend on the circumstances of the case. In the case of minor infringements or where an agency is found for the first time to be in breach of law, the usual step is for the inspectors to explain the position and warn against further breaches. In the more serious cases, this explanation will also be provided in writing. The explanation will be in terms of obligatory requirements because the specific nature of the Act and regulations leaves no room for recommending actions which are not mandatory.

In the case of an employment agency or employment business which is found to have breached the law before, or which has caused serious harm to its users through disregard for the protective provisions, we may take the option of prosecution in a Magistrates' Court or an application for a prohibition order.

If an employment agency or employment business wishes to question any explanation given by one of our inspectors or to make representations about the application of the law, we will listen, seek legal advice if necessary and advise appropriately. Such questions or representations should first be sent to the Operations Manager at the Employment Agency Inspectorate.

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Our Service Standards

Complaints about employment agencies and employment businesses
We will investigate complaints about the conduct of an employment agency or employment business within the scope of the Act as a matter of priority. If you wish to make a complaint please write to, telephone, email or fax the Employment Agency Standards Office. We will supply a simple form to help you make your complaint if you need it.

We will give you a written explanation of the result of the investigation. If we cannot complete the investigation within 4 weeks we will tell you what is happening.

Our service to our customers
You can expect us to provide a helpful, courteous and efficient service. Staff will identify themselves by name.

We want to know what you think about us. We welcome comments on our service.

If something has gone wrong with the way you have been treated or the way your complaint about an employment agency or employment business has been dealt with, please write to

Operations Manager
Employment Agency Standards
Department of Trade and Industry
UG61
1 Victoria Street
London SW1H 0ET

If we owe you an apology, we will give you one. We will explain what went wrong and what we will do to put it right.

You may also write at any time to an MP, who may decide to refer you complaint to the Parliamentary Commissioner for Administration (the Ombudsman).

Consultation
From time to time we consult with representative bodies and trade unions directly concerned with the employment agency or employment business industry. Our aim is to discuss how best to deal with compliance failures and other matters of mutual concern.

How to get in touch with us:

Write to
Employment Agency Standards Inspectorate
Department of Trade and Industry
UG62
1 Victoria Street
London SW1H 0ET

E-mail
eas@dti.gsi.gov.uk

Helpline
0845 955 5105 (UK) All calls charged at local rates

+44 20 7215 5980 (International)

020 7215 6740 Minicom (text phone)

Fax
020 7215 2636 (UK)

+44 20 7215 2636 (International)

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Appendix - other legal requirements

Many additional legal requirements in legislation other than the Employment Agencies Act 1973 and regulations made under it apply to employment agencies and employment businesses either specifically or as they apply to businesses or employers generally. These include the specific obligations placed on employment agencies and employment businesses by legislation relating to discrimination in employment, viz:

Sex Discrimination Act 1975 (as amended by the Sex Discrimination Act 1986 and Employment Act 1989). The legislation makes it unlawful for an employment agency to discriminate against a person on the grounds of sex or marriage in relation to the provision of its services. The Equal Opportunities Commission has produced a Code of Practice on equal opportunity policies, procedures and practices in employment, which is available from the Equal Opportunities Commission, Overseas House, Quay Street, Manchester M3 3HN (tel: 0161 833 9244).

Race Relations Act 1976. The legislation makes it unlawful for an employment agency to discriminate against a person on the grounds of colour, race, nationality or ethnic or national origins in relation to the provision of its services. The Commission for Racial Equality's Race Relations Code of Practice for the elimination of racial discrimination and the promotion of equal opportunity in employment includes responsibilities and recommendations for employment agencies and employment businesses. Copies are available from the Commission for Racial Equality, Elliot House, 10-12 Allington Street, London SW1E 5EH (tel: 020 7828 7022).

Trade Union and Labour Relations (Consolidation) Act 1992 which, generally, makes it unlawful to refuse access to employment on grounds related to trade union membership. In particular, the Act makes it unlawful for employment agencies to refuse to provide their normal service to an applicant because of his trade union membership or non-membership. Guidance booklet PL871 is obtainable from any office of the Employment Service or from any regional office of the Advisory, Conciliation and Arbitration Service (ACAS).

The Disability Discrimination Act 1995 (DDA) makes it unlawful for employers to discriminate against disabled employees or job applicants. Employers may have to make reasonable adjustments to employment arrangements and the workplace. Disabled people who have been discriminated against can complain to an employment tribunal. ACAS can help conciliate. Employers with fewer than 15 employees are excluded. Further details are contained in booklet DL170 DDA: What employers need to know, which is available from the Disability Rights Commission's (DRC) helpline, which can be phoned for the cost of a local call on 08457 622633 (or 08457 622644 for textphone).

The DDA also makes it unlawful for those providing goods, facilities, services or premises to the public ("service providers") to discriminate against disabled people. It applies to service providers of any size. Service providers must not treat disabled people less favourably for a reason related to their disability, and disabled people who have been discriminated against can complain to the courts. Since 1 October 1999, service providers have also had to make reasonable adjustments to enable disabled people to use their services. This may include: altering policies, practices or procedures which exclude disabled people; providing auxiliary aids and services or providing the service in a reasonable alternative way where a physical feature prevents access. Further details are contained in booklet DL150 DDA: What service providers need to know, which is also available from the DRC Helpline. From 1 October 2004, service providers will have to consider making reasonable adjustments to the physical features of their premises if they continue to prevent access to services.

A finding by a court or tribunal that any employment agency, employment business or person concerned with carrying on an agency or business is in breach of statutory obligations may give the Secretary of State grounds for applying to an employment tribunal for a prohibition order.

 

 

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Last updated 30 April 2003