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Part 1 Guidance for Employment Agencies, Recruitment Agency

Regulation 1: � Citation and Commencement
Except for regulations 26(7) and 32 the Regulations will come into force
on 6th April 2004. To facilitate the implementation of the Regulations,
regulation 4 and Schedule 1 provide for a three month transitional period,
starting from 6th April 2004 and ending on 5th July 2004. Regulations
26(7) and 32 will come into force on 6th July 2004.
Regulation 2 : � Interpretation
Regulation 2 defines the terms used in the Regulation.
Many of the definitions given in regulation 2 need no further explanation,
but where additional explanation is required, this is set out below:
The term �advertisement� covers all forms of advertising. This will
include advertising on the Internet, advertising boards in agencies� and
employment businesses� shop-fronts, sales promotion leaflets and flyers,
advertisements in all forms of media including printed publications, poster
advertisements, radio and television advertisements. This definition
should therefore be read in conjunction with regulation 27, which deals
with the rules on advertising for employment agencies and employment
businesses and section 13(4) of the Employment Agencies Act 1973.
Employment Agency and Employment Business
The meaning of the terms �employment agency� and �employment
business� are defined in the Employment Agencies Act 1973 as
amended by the Employment Relations Act 1999. The amendments
made by the 1999 Act will apart from the changes to section 13(2) of the
Employment Agencies Act 1973, come into force on 6th April 2004. The
amendments to section 13(2) will come into force on 6th July 2004. See
Annex for details of the amendments.
Employment Agency
Broadly speaking an employment agency introduces work-seekers to
client employers for direct employment by those employers. This is
usually known in the industry as �permanent recruitment� or employment
even though the employment may only be for a fixed period.
Employment Business
An employment business engages work-seekers under either contracts
for services or contracts of employment and supplies those work-seekers
to client hirers for temporary assignments or contracts where they will be
under the hirers� supervision or control. This is usually known in the
industry as the �supply of temporary workers�. A company engaged in
both �permanent recruitment� and �the supply of temporary workers� will
fall into the definition of both employment agency and employment
business to reflect both sides of the business. Where this Guidance uses
the terms �direct employment� or �permanent recruitment� it refers to the
operation of an employment agency. Where the Guidance refers to the
�supply of temporary workers� it is referring to the operation of an
employment business.
The word �hirer� is defined in the Regulation as meaning the person
(including firms and corporate bodies) to whom temporary workers are
supplied or to whom candidates are introduced for direct employment.
Work Finding Services
These are the services provided by the agency and employment
business to individuals either looking for permanent work or temporary
work in order to help them find that work, and include:
� the services it is providing to a candidate looking for permanent
� circumstances where it provides temporary work opportunities to
temporary workers who it employs under contracts of employment
(contracts of service); and
� circumstances where it provides temporary work opportunities to
temporary workers who it engages under contracts for services.
This term refers to persons looking for both permanent and temporary
work and includes not only individual work-seekers but also limited
company contractors (including composite and umbrella companies) who
have not opted out of the Regulations. Under this definition a workseeker
is not only a person that an employment agency or employment
business provides work-finding services to, but also a person to whom it
holds itself out to as being capable of providing such services. In other
words both those actually working through the agency or employment
business and those who may do so in the future.
This does not however mean that where the agency or employment
business receives large numbers of speculative CVs that it cannot use, it
is required to issue contracts to those persons or keep records in respect
of them (see notes to regulation 29 (Record Keeping)). The requirement
to issue contracts and keep records only arises once the agency or
employment business starts taking active steps towards placing a workseeker
in work.
Regulation 3: - The meaning of �connected�
This regulation establishes the circumstances in which one person is
connected with another.
A person for the purposes of this definition could mean an individual, firm
or corporate body.
A person will be connected to another person who is his/her spouse,
minor child or stepchild, his/her employer, employee or business partner.
A person (A) will also be connected to a person which is a company, (B),
if A is a director or other officer of B. A will also be connected to any
company (C) which is in turn connected to B. C and B will be connected
if the same person is a director or other officer of both or has control of
both or if C is a subsidiary or holding company of B. A will also be
connected to a director, other officer or employee of such a subsidiary or
holding company. Furthermore, if a person is connected with a trustee of
a trust, s/he will also be connected with the beneficiary of that trust and
any other trustees.
The significance of this definition is seen primarily in the workings of
regulation 8, which prohibits the payment of workers by an employment
agency. Regulation 8 brings this prohibition into effect by providing that
an employment agency may not pay or make arrangements to pay the
work-seeker it has introduced to a hirer or refer the hirer to a person
connected to the employment agency with a view to that person paying
the work-seeker. In other words if an employment agency makes an
introduction to a hirer, the hirer must take responsibility for payment to
that work-seeker.
Regulation 4: - Transitional and Saving Provisions and revocation
This regulation revokes the Conduct of Employment Agencies and
Employment Businesses Regulations 1976 and both the Charging Fees
to Workers Regulations 1976 and the Charging Fees to Au Pairs
Regulations 1981. Schedule 1 to the Regulation provides for a three
month transitional period from the 6th April 2004 to 5th July 2004 in
respect of those regulations which come into force on 6th April 2004.

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