THE
EMPLOYMENT AGENCIES ACT 1973
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 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.

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.

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.

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 is 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.

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.

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.

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.

Complaints
about employment agencies and employment businesses
The Dti 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. They will supply a simple form to
help you make your complaint if you need it.

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.
Other areas on this subject: