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In the House of Commons this week questions were asked regarding the implementation of a four week 'quaratine' period under the Conduct of Employment Agencies and Employment Businesses Regulations (the "Conduct Regulations"). The term 'quaratine', under the current circumstances seems a bit of an odd choice, refers to the period of time an IT contractor would have to wait before they can leave their agency on a contract and go direct or through another agency to the hirer. This may be good news for the IT contractor but, it has the recruitment industry up in arms. The re-drafted Conduct Regulations have been in consultation since 1999 although, they have been in force since the 1976 Regulations. One of the main issues of contention are the so called 'temp to temp', 'temp to perm' and 'temp to third party' clauses. The 'temp to perm' clause is where the hirer is restricted from taking the temporary worker on in permanent employment. The 'temp to temp' clause reflects the situation where the worker goes direct with the hirer on a temporary basis and the 'temp to third party' clause is where the hirer wants the worker to go through another agency. At present most contracts include a clause which states that the client cannot do any of the above without being in breach or suffering a penalty. The average length of this type of clause is approximately 12 months although they vary considerably. They can also be seen in the workers contract although they have no effect. In an effort to bring flexibility to the recruitment market and to breakdown the barriers to permanent employment, the Government virtually outlawed the use of such clauses. The recruitment industry refused to accept this, understandly from their point of view, and the regulation has evolved into Clause 10 - Restriction on charges to hirers, in the forthcoming Regulations. The intention of the regulation is to make any applicable term of the contract between the employment business and the hirer unenforceable, subject to certain exceptions. The exceptions relate to a 'relevant period' rather than any pecuniary amount and in fact it states in regulation 10 (7) (b) that "...an employment business shall not...directly or indirectly, request a payment to which by virtue of this regulaton the employment business is not entitled." The 'relevant period' in a case where the worker takes up employment with the hirer is the later of either 8 weeks from the last day or 14 weeks from the first. In the case where the worker takes up employment with any person to whom the hirer has introduced them or begins working for the hirer pursuant to being supplied by another employment business, the relevant period is 4 weeks from the last day worked. Back in the House of Commons Dr Cable, MP for Twickenham, asked the Secretary of State for Trade and Industry what estimate he had made of the impact of allowing a maximum 4 week quaratine period in this circumstance and for what reasons an assessment of the impact was not included in the draft regulatory impact assessment for the Conduct Regulations. Mr Alan Johnson responded for the Secretary of State "...It was not possible to identify quantifiable costs for most of the measures in the Regulations since they are likely to lead to changes in the behaviour of the organisations and workers in the private recruitment industry. Moreover, statistical information on the industry is limited." Maybe he should have asked Ms Primarolo for her statistics. As to a behavioural change in the recruitment industry, this fits in nicely with the recalcitrant contractor being evolved into a 'disguised employee'. Dr Cable then asked what the statistics were for the percentage of temporary workers who specialised in IT and the percentage of IT workers that worked on temporary contracts rather than permanent employment. Mr Johnson replied "Detailed information on specific occupational groups of agency workers is not available." Of course, if these people transferred in to permanent employment there wouldn't be such a statistical nightmare. It has to be mentioned at this point that, if one suffered from paranoia, they could think that there was a conspiracy against the recruitment industry; with IR35 affecting the contractors, the Conduct Regulations affecting the agencies and the possible threat of employee rights affecting the clients, coincidentally all at the same time. If all three sectors of the industry were to stand up against this legislative landslide perhaps, just perhaps, the Government would listen. |
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