Which laws apply to employment agencies and employment businesses?

Which laws apply to employment agencies and employment businesses?

Employment agencies and employment businesses are regulated by the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003, as amended by the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2007. 

For the purpose of the legislation an “employment agency” ordinarily puts forward candidates for permanent vacancies and an “employment business” ordinarily supplies temporary workers. However, in reality many companies provide both services and will, therefore, fall under both definitions.

Is an agency or employment business allowed to charge work-seekers for their services?

As a general rule agencies and employment businesses are prohibited from charging or seeking to charge work-seekers for the service of finding or seeking to find employment for them. There are certain exceptions to this general rule which are set out in the Conduct of Employment Agencies and Employment Businesses Regulations 2003. 

Agencies and employment businesses are restricted from requiring work-seekers to use services for which they are entitled to charge as condition of providing work-finding services. 

Can an employment business legitimately withhold payment to a temporary worker?

Employment businesses are, in a number of circumstances specified by the Conduct of Employment Agencies and Employment Businesses Regulations 2003, prohibited from with-holding payment to the work-seekers whom they supply. The fact that the hirer has not paid the employment business is not a legitimate ground for withholding payment to the worker.

What other things are agencies and employment businesses restricted from doing?

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 places a number of other restrictions on agencies and employment businesses. For example, agencies and employment businesses are prohibited from subjecting or threatening to subject work-seekers to any detriment where a work-seeker works or seeks to work other than through that agency or employment business. Employment businesses are also ordinarily restricted from providing work-seekers in industrial disputes and restrictions are placed on their ability to charge “temp to perm” fees.

What requirements does an agency or employment business have to satisfy before it can provide services?

Agencies and employment businesses are required to provide details to both work-seekers and hirers of any charges they seek to charge.

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For more information on:

  • What requirements does an agency or employment business have to satisfy when it introduces or supplies a work-seeker to a hirer?
  • Are there any other obligations, restrictions or rules?
  • What if an employment agency or employment business fails to comply with the law?