Dodgy Agency Practices
We published this originally in 2004. However, I would think that many new Contractors (and some older ones) would not be aware that the Government has clamped down on dodgy agency practices.
Agents Could end up in Prison
Agents could face prison sentences for such dodgy agency practices as:-
- falsely acquiring leads,
- advertising fake jobs, and
failing to pay contractors on time.
The department of Trade and Industry published regulations in 2004 that will put an end to many of the unethical practices that some agencies use in, for example, what contractors call ‘spamming references’.
The Government has been watching for some times to see if current codes of conduct by recruitment company representative bodies are effective.
Now it has decided to act.
Outlawed Agency Practices
Amongst those agency practices that it has outlawed are:-
- Agents telling contractors that they have contracts for them when they, in fact don’t. They just want to find fresh leads to use for themselves. This will, in future, be deemed as fraud and the agency can be prosecuted under existing Fraud laws.
It will now be an offence to advertise jobs that the agency does not have. This will be now be a criminal offence. There will be fines of up to £5,000 for first offences and a prison sentence of up to 2 years for persistent offenders
Contractors will now have to get their pay within the time period on their contracts. Before this was a civil offence and the contractor had to instigate legal action. Now, this will be a criminal offence. There will be fines of up to double the amount outstanding and up to 5 years in prison for persistent offenders
Also, agencies will now have to inform contractors, who have been for an interview through them, of the results of the interview within 48 hours of the agency hearing about the results from the client.
In another clause, they will now have to fix agency margins. They cannot have a different rate for one contractor than they have for another. Furthermore, they will have to display their margins in their offices and on their web site. They will also have to give this information on request.
Failure to do so may result in a fine or a prison sentence for persistent offenders.
A spokesman for one agency said:-
“This will definitely have a major effect on the industry. It will be contractors who will be worst hit if we are not able to find job leads effectively.”
According to a spokesperson for an agency body, “It won’t affect us very much as none of our members adopt these dodgy agency practices anyway. It will be mainly some of the smaller cowboy agencies who will be hit”.
I wonder how many agencies are actually breaking these regulations.