The New Conduct of Employment Agencies and Employment Businesses Regulations

The proposed Conduct of Employment Agencies and Employment Businesses Regulations 2003 (the Regulations) finally appeared on the HMSO website on 16 December 2003.

It is expected that the Regulations will come into force on 6 April 2004 with some exceptions (see below). There are also transitional arrangements allowing some old contract terms (where the relevant contracts are in existence at 6 April 2004) until 5 July 2004.

This briefing will cover key issues arising from the Regulations:

ï How will ìtemp to tempî and ìtemp to permî fees work in the future?
ï How will the Regulations affect end users and managed service providers who want to
transition PAYE temps and contractors from their original staffing companies to master
vendors or new preferred suppliers?
ï How will staffing companies try to protect their goodwill in the future?
ï How will the Regulations affect the supply of contractors who supply their services via
personal service companies or umbrella companies?
ï How will the opt-out provisions work in practice?
ï How will the timesheet provisions work? Are there any ways round them?
ï Will current VAT mitigation arrangements come to an end?
ï How can all the procedural requirements best be complied with?
ï What is the likely market impact?

We are also conducting seminars about the Regulations at which we will elaborate upon a number of the issues raised in this briefing. If you are interested in attending such a seminar please contact your normal Tarlo Lyons contact or Charlotte Macnaughton - 020 7814 5449 -charlotte.macnaughton@tarlolyons.com.

This briefing cannot cover all issues relevant to all readers, and we are providing tailored advice to a wide range of staffing companies and end users with specific issues under the Regulations. Please contact us if you require specific advice, or help with new contract clauses.

Also note that due to drafting problems in the Regulations the opinions expressed in this briefing should be treated as only a brief summary of the preliminary views of Tarlo Lyons on the relevant provisions. For a definitive view on any specific provision you should please contact us for specific advice.

Political background to the Regulations

Until now the UK recruitment industry has been relatively lightly regulated. The current regulation of staffing company activity, as set out in the Employment Agencies Act of 1973, and the 1976 regulations under that Act, does not seriously impede the recruitment market and the Heseltine attack of regulation in the early 90s ended the previous licensing regime.