Recruitment Law: The Importance of Knowing the Regulations1

By Mandy Leonard
As a recruitment consultant your days are generally spent focusing on making sales and dealing with client requirements. Getting roles, finding candidates, chasing feedback, organizing interviews, the list goes on, leaving little time to focus on the clients themselves. But with such focus on making a sale, are you inadvertently leaving your clients open to risks?

Over the past few years government legislation has tightened the regulations governing employment law, yet very few recruitment consultants are aware of the implications that theses changes have for their clients. It is shocking to think that companies are using agencies to provide services that are potentially opening them up to law suits that may cost them millions of pounds.

There have been numerous instances over the past few years which have brought home the risks faced by employers today. The most notable of which was the case of Muscat vs. Cable & Wireless Plc. In this case, a temporary worker was able to successfully sue Cable & Wireless for wrongful dismissal because the contractor was able to prove that the working situation was one of "implied employment".

"Implied Employment" refers to a situation where a contractor working for a client through a Limited Company and a recruitment agency is treated by the client the same as a permanent employee. This includes having to organize annual leave, contract extensions and pay rises with the client directly. From a recruitment agency standpoint, this is unacceptable.

First and foremost, there is rarely a direct contract between a contractor and a client, the contract is between the contractor's Limited Company and the agency. The agency will then have a contract with the client to provide the services of the contractor's Limited Company, not the contractor specifically. Quite simply, any contractual negotiations, any annual leave, sick leave etc, all of this must go through the recruitment agency. Line managers who involve themselves in these conversations or behaviours are opening themselves and their companies up to some serious legal risks.

Yet many agencies do not train their consultants about these regulations or the risks that their clients face. It is understandable that managers within an organization would not be aware of the legal aspects of hiring contractors. Therefore it is the responsibility of the recruitment agency to ensure that the client is aware of the risks and that the consultant ensures that both the contractor and the managers work in such a way as to negate those risks.

Thankfully these lawsuits do not happen very often but this does not mean that recruitment consultants can continue to be complacent. These cases still happen, this behaviour still continues and clients are still put at risk because consultants are not trained sufficiently in the requirements of contract law. By no means should recruitment consultants become employment law experts, but it is important if they are working within recruitment, to understand the simple things which can be done to minimize these risks.

Mandy Leonard is a co-founder of Enabled IT, which specializes in working in partnership with clients to provide a customer centric recruitment solution. With experience in both the recruitment and technical sector, she has specialized in sales and management training to optimize the abilities of sales forces. For more information please visit http://www.mandyleonard.com or e-mail contact@mandyleonard.com Copyright (c) 2007 Mandy Leonard

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