The government is proposing to simplify regulation of the recruitment sector by replacing the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003, with new, clearer, regulations. The proposals do not affect the more recent Agency Workers Regulations 2010, (which introduced new pay equality rights for certain agency workers), and will have a greater impact on employment agencies and businesses than on end-users.


Currently both employment agencies (who introduce job candidates for direct employment by the hirer) and employment businesses (who employ and supply 'temps') are regulated by the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003. The government sees the 1973 and 2003 legislation as too complex, and aims to replace it with 'the simplest regulatory framework possible'.

The consultation covers four key points:

  1. whether employment agencies and businesses should be able to charge fees to agency workers;
  2. clarity as to whether the employment business or the hirer is responsible for paying the worker;
  3. whether there are barriers to agency workers moving between jobs, which could be removed. This would include whether there should be an obligation for temp-to-perm transfer fees to be 'reasonable' and whether employment businesses should be restricted from imposing penalties on workers for terminating their arrangements; and
  4. giving workers greater powers to enforce their rights. This could include information-sharing to help workers choose between agencies, and a new right to pursue claims in the Employment Tribunals potentially in place of enforcement by the Employment Agency Standards Inspectorate.

Consultation on the proposals closes on 11 April 2013. Within 12 weeks of this date the government intends to publish a summary of the responses received and the first draft of legislation to replace the 1973 and 2003 rules. The government's aim is to achieve 'the simplest regulatory framework possible', while addressing the areas above. The Agency Workers Regulations 2010, which are in practice more significant for end-users of agency workers, will however continue to apply.

Please click here for details of the consultation