Home : Newsletters : 2004 : May
The recruitment industry is governed by the 1973 Employment Agencies Act and this act was updated with new Employment Agency Regulations that came into effect on April 6th 2004.
Under the new regulations employment agencies are required to check the identity, background and skills of all job seekers using their service. Employment agencies must also check a candidate's qualifications if those qualifications are legally required for a job (for example in the medical sector). In addition to this the new regulations also state that employment agencies must obtain adequate levels of information about vacancies in order to facilitate matching an appropriate job seeker.
These new regulations are as a result of a consultation period bet ween the Department of Trade and Industry and the recruitment industry (represented by the Recruitment and Employment Confederation and the Association of Online Recruiters) that started in 1999. The aim of the Employmen t Agencies Act is to safeguard the interests of job seekers, employers and employment agencies.
The regulations place a significant burden on all recruitment consultancies, as they must now check the details of every employer they work with, every vacancy they try to fill and every candidate that uses their service.
However the biggest issue concerning the new regulations centres on the definition of an employment agency as the legislation makes no distin ction between job boards (such as Jobsite and Monster) and recruitment consultancies (such as Michael Page and Manpower). This means that job boards have exactly the same obligations under th e act as recruitment consultancies. Currently fulfilling these obligations would be unpractical for job boards due to the sheer volume of employers an d jobs that they deal with; for example Total Jobs currently carries 60,000 vacancies.
The argument around the lack of distinction between job boards and recruitment consultancies is based around the different roles performed by the organisations. Some argue that job boards essentially act as an advertising medium and only facilitate contact between employers and candidates and consequently should be excluded from the act in the sa me way as newspapers that carry classified recruitment advertisements. Others argue that as many job boards are now offering an increasingly wide r ange of CV database and candidate matching products that they should be regarded as more than just an advertising medium and should therefore be covered, in some form, by the regulations.
The REC and the AOLR are currently trying to work with the DTI to find a solution to the above argument and provide a way in which job boards can de accurately defined and preferably excluded from the regulations.
If it's not possible to exclude job boards from the regulations an d the DTI insists that they comply with their obligations then the ultimate consequences for the UK online recruitment industry could be serious. Many job boards may be forced out of business while others might choose to relocate overseas in order to sidestep the regulations. Neither of these scenarios would safeguard the interests of job seekers, employers or employment agencies - the very point of the legislation.
More realistically though it is unlikely that there will be any major developments regarding the new Employment Agency Regulations until the government needs to demonstrate that it can regulate the recruitment industry. This situation will arise when a candidate is placed in a high profile position or a job with a high level of responsibility by an employment agency (or currently by a job board) and is found to be unsuitable, unqualified or dishonest. Then the organisation responsible for placing that candidate will have to face the consequences of infringing the regulations and will also be forced to act as a guinea pig for the whole UK recruitment industry.