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LICENCE TO BILL
Is the whole recruitment industry heading towards statutory licensing? Jim Tanfield explores the issue.
There is undoubtedly a dichotomy of opinion when it comes to the highly-controversial question of licensing for the entire UK recruitment industry.
Some would argue that a licensing authority would create a form of quango meaning individual businesses would be indirectly answerable to Whitehall; others will frown at the potential expense of policing the 23,000-plus UK recruiters. Then there is the EU conundrum – all other recent legislation has come from Brussels, would licensing be dictated by them as well?
On the other hand if you are within the law, ethical and your entrepreneurial skills are still allowed to blossom in the staffing sector then what’s the harm? For many, the same argument that cropped up when the Government was rallying support for its ID cards: “If you have nothing to hide, then it shouldn’t bother you.”
Cleaning up
No-one can deny the positive work done by the Gangmaster’s Licensing Authority, however, its work is restricted to those who supply labour or use workers to provide services in agriculture, forestry, horticulture, shellfish gathering and food processing and packaging. These are all sectors notoriously attracting more nefarious practices – despite many respectable and successful recruiters.
But can this model be extended to fit in with the wider industry?
The Recruitment and Employment Confederation sits on the board of the GLA, which provides a first-hand view of some of the practical issues surrounding licensing.
So does the REC believe the industry in general could benefit from a similar authority?
Director of external relations Tom Hadley believes the activities of certain rogue traders that systematically breach regulations and undercut legitimate businesses need to be addressed. However, he thinks the question is whether a return to licensing across all sectors is the best way forward for the industry.
He says: “REC members support practical measures to enhance enforcement and we are not opposed to licensing as a concept. However, it is important to remember that the previous licensing regime that was in operation until 1994 was seen as pure paper exercise and a waste of time.”
Licensing Paragon
A Conservative think-tank earlier this month called the GLA the model that all industry regulators should aspire to.
Chairman Paul Whitehouse explains how the GLA model came into being: “In the late 1990s farmers, growers, trade unions, processors, retailers and pretty much everyone involved in the food production industry realised that there was growing exploitation of workers by some fly-by-night agencies so DEFRA set up a working group calling for a code of practice and a Private Member’s Bill went to Parliament.”
The Bill was extended after its first reading following the Morecambe Bay cockle picking disaster as shellfish harvesting wasn’t initially mentioned. This added weight to the argument and the Government adopted it as law soon after.
Paul doesn’t believe to get the model extended into other areas where exploitation is evident would be too difficult – he cites healthcare, cleaning, chamber-maids, catering and construction as two examples which could instantly benefit from GLA regulation as they have been suggested through recent research to suffer from exploitation.
He adds: “I think it’s a very simple extension; the only snag would be because the original Bill was an agricultural Bill – it was about food processing – there would have to be a piece of primary legislation which would include another department as it would not be a DEFRA matter anymore. Once it was set up then you could extend control region-by-region or sector-by-sector or however you wanted to do it. Scaling up the system would be very simple.”
Speaking personally Paul believes that the GLA is such an effective organisation and achieves what is required and adds: “We were set up to prevent workers being exploited but also to realise a level playing field for businesses and we make sure that people pay their taxes so there are a lot of straightforward benefits.”
Cash question
“For any licensing scheme to have a real impact, a number of things would need to happen,” adds the REC’s Tom Hadley.
He adds there is a serious financial and logistics implication in an industry-wide licence: “First of all,” he says, “sufficient resources would need to be allocated – in particular with regards to the number of enforcement officers on the ground carrying out inspections.
“The current GLA, which is limited to agriculture and related processing and packaging activities, is looking to increase their number of inspectors to around 30 (according to the GLA this is now nearer 50).
“The number of inspectors needed for the industry as a whole would run into the hundreds.”
Thanks to a “substantial” budgetary increase from DEFRA, the GLA is increasing its enforcement staff by 85 per cent – this is to inspect a total of 1,200 licensees plus helping bring the unlicensed to justice.
The Association of Professional Staffing Companies is hoping to start an industry debate with a licensing summit to be held in the spring of this year.
Paul believes that the businesses represented by APSCo are not really the type to exploit workers but applauds the efforts to get the industry talking about those that would benefit from scrupulous practise.
“The benefits of such a licensing scheme is that an agency doesn’t get tarred with the same brush as some of the worst excesses of some of the others.
“It is rather like being an estate agent – there are some around that are good at their job but unfortunately the bad practices of a small number damns the industry as a whole. And that’s why I think it’s helpful to improve standards generally.
“What is significant about all of this of course is that it means you are not going to be undercut by the fly-by-nights because there is a very easy way to operate beneath the radar and not pay taxes. We have got the bottom end of the market covered.”
Essential skills
So what of the logistics and the question of enforcement if the industry as a whole is covered?
“It is not just a numbers game,” Tom is keen to point out, “and it would be essential to ensure that inspectors had the necessary skills and detailed knowledge of the industry to make the scheme work in practice. The huge differences that exist between different parts of the recruitment market place are often underestimated and it would be essential to ensure that inspectors were specialised in different sectors.
“There would be nothing worse than having civil servants rummaging through agencies and issuing conflicting and ill-informed diktats to law-abiding businesses.”
Tom suggests that a further key factor is how any industry-wide licensing scheme would be funded. It is likely – especially in the current climate – that any scheme would have to be self-financing.
He adds: “The licensing fees paid by agencies would need to cover the running costs of what would have to be a huge administrative machine. Would this substantial cost and bureaucracy on already law-abiding agencies be worthwhile? This would depend on whether any future scheme successfully targets the rogue providers operating ‘under the radar’.
“Achieving this is the real challenge and the question boils down to whether we need a full licensing scheme to achieve this common goal. For a number of years, the REC has called for better enforcement of existing regulations and this campaign is now starting to bear fruit in terms of a more joined-approach between different Government inspectorates and more resources on the ground.
“At the very least, this ongoing enforcement campaign must be given time to deliver before we even consider adding a whole new regulatory structure.”
As well as monitoring how the Government’s ‘better enforcement’ drive works in practice, one of the REC’s priorities will be to continue pushing its own professional standards agenda.
“Linked to this are ongoing ‘client-facing’ campaigns,” continues Tom “aimed at educating the employer community. Using the supply chain to promote good practice is an increasingly common theme in political and business circles and over time will help to drive out the examples of bad practice.”
Get talking
While APSCo is keen to get the debate started there will of course be those digging their heels in for the status quo.
Tom concludes: “The REC is not opposed to licensing per se but agencies have highlighted a number of practical concerns such as the cost on already law-abiding agencies with no guarantee of a ‘return’ in terms of targeting the real rogue providers who operate ‘under the radar’.
“The run up to the next election is the right time to look ahead at the kind of regulatory environment that will enable the industry to flourish in the upturn. The licensing debate will continue but a potentially bureaucratic and costly licensing regime is not the only way forward. The REC will continue to fight for the best possible regulatory landscape for recruiters and to work constructively with existing Government agencies on the current enforcement drive.”
Trade associations are of course primarily concerned about protecting its membership, individual businesses will of course have their own strong opinions, but one thing is certain – if anything can be done to weed out bad practice and raise the public’s perception of the industry then it is worth talking about.
Some would argue that a licensing authority would create a form of quango meaning individual businesses would be indirectly answerable to Whitehall; others will frown at the potential expense of policing the 23,000-plus UK recruiters. Then there is the EU conundrum – all other recent legislation has come from Brussels, would licensing be dictated by them as well?
On the other hand if you are within the law, ethical and your entrepreneurial skills are still allowed to blossom in the staffing sector then what’s the harm? For many, the same argument that cropped up when the Government was rallying support for its ID cards: “If you have nothing to hide, then it shouldn’t bother you.”
Cleaning up
No-one can deny the positive work done by the Gangmaster’s Licensing Authority, however, its work is restricted to those who supply labour or use workers to provide services in agriculture, forestry, horticulture, shellfish gathering and food processing and packaging. These are all sectors notoriously attracting more nefarious practices – despite many respectable and successful recruiters.
But can this model be extended to fit in with the wider industry?
The Recruitment and Employment Confederation sits on the board of the GLA, which provides a first-hand view of some of the practical issues surrounding licensing.
So does the REC believe the industry in general could benefit from a similar authority?
Director of external relations Tom Hadley believes the activities of certain rogue traders that systematically breach regulations and undercut legitimate businesses need to be addressed. However, he thinks the question is whether a return to licensing across all sectors is the best way forward for the industry.
He says: “REC members support practical measures to enhance enforcement and we are not opposed to licensing as a concept. However, it is important to remember that the previous licensing regime that was in operation until 1994 was seen as pure paper exercise and a waste of time.”
Licensing Paragon
A Conservative think-tank earlier this month called the GLA the model that all industry regulators should aspire to.
Chairman Paul Whitehouse explains how the GLA model came into being: “In the late 1990s farmers, growers, trade unions, processors, retailers and pretty much everyone involved in the food production industry realised that there was growing exploitation of workers by some fly-by-night agencies so DEFRA set up a working group calling for a code of practice and a Private Member’s Bill went to Parliament.”
The Bill was extended after its first reading following the Morecambe Bay cockle picking disaster as shellfish harvesting wasn’t initially mentioned. This added weight to the argument and the Government adopted it as law soon after.
Paul doesn’t believe to get the model extended into other areas where exploitation is evident would be too difficult – he cites healthcare, cleaning, chamber-maids, catering and construction as two examples which could instantly benefit from GLA regulation as they have been suggested through recent research to suffer from exploitation.
He adds: “I think it’s a very simple extension; the only snag would be because the original Bill was an agricultural Bill – it was about food processing – there would have to be a piece of primary legislation which would include another department as it would not be a DEFRA matter anymore. Once it was set up then you could extend control region-by-region or sector-by-sector or however you wanted to do it. Scaling up the system would be very simple.”
Speaking personally Paul believes that the GLA is such an effective organisation and achieves what is required and adds: “We were set up to prevent workers being exploited but also to realise a level playing field for businesses and we make sure that people pay their taxes so there are a lot of straightforward benefits.”
Cash question
“For any licensing scheme to have a real impact, a number of things would need to happen,” adds the REC’s Tom Hadley.
He adds there is a serious financial and logistics implication in an industry-wide licence: “First of all,” he says, “sufficient resources would need to be allocated – in particular with regards to the number of enforcement officers on the ground carrying out inspections.
“The current GLA, which is limited to agriculture and related processing and packaging activities, is looking to increase their number of inspectors to around 30 (according to the GLA this is now nearer 50).
“The number of inspectors needed for the industry as a whole would run into the hundreds.”
Thanks to a “substantial” budgetary increase from DEFRA, the GLA is increasing its enforcement staff by 85 per cent – this is to inspect a total of 1,200 licensees plus helping bring the unlicensed to justice.
The Association of Professional Staffing Companies is hoping to start an industry debate with a licensing summit to be held in the spring of this year.
Paul believes that the businesses represented by APSCo are not really the type to exploit workers but applauds the efforts to get the industry talking about those that would benefit from scrupulous practise.
“The benefits of such a licensing scheme is that an agency doesn’t get tarred with the same brush as some of the worst excesses of some of the others.
“It is rather like being an estate agent – there are some around that are good at their job but unfortunately the bad practices of a small number damns the industry as a whole. And that’s why I think it’s helpful to improve standards generally.
“What is significant about all of this of course is that it means you are not going to be undercut by the fly-by-nights because there is a very easy way to operate beneath the radar and not pay taxes. We have got the bottom end of the market covered.”
Essential skills
So what of the logistics and the question of enforcement if the industry as a whole is covered?
“It is not just a numbers game,” Tom is keen to point out, “and it would be essential to ensure that inspectors had the necessary skills and detailed knowledge of the industry to make the scheme work in practice. The huge differences that exist between different parts of the recruitment market place are often underestimated and it would be essential to ensure that inspectors were specialised in different sectors.
“There would be nothing worse than having civil servants rummaging through agencies and issuing conflicting and ill-informed diktats to law-abiding businesses.”
Tom suggests that a further key factor is how any industry-wide licensing scheme would be funded. It is likely – especially in the current climate – that any scheme would have to be self-financing.
He adds: “The licensing fees paid by agencies would need to cover the running costs of what would have to be a huge administrative machine. Would this substantial cost and bureaucracy on already law-abiding agencies be worthwhile? This would depend on whether any future scheme successfully targets the rogue providers operating ‘under the radar’.
“Achieving this is the real challenge and the question boils down to whether we need a full licensing scheme to achieve this common goal. For a number of years, the REC has called for better enforcement of existing regulations and this campaign is now starting to bear fruit in terms of a more joined-approach between different Government inspectorates and more resources on the ground.
“At the very least, this ongoing enforcement campaign must be given time to deliver before we even consider adding a whole new regulatory structure.”
As well as monitoring how the Government’s ‘better enforcement’ drive works in practice, one of the REC’s priorities will be to continue pushing its own professional standards agenda.
“Linked to this are ongoing ‘client-facing’ campaigns,” continues Tom “aimed at educating the employer community. Using the supply chain to promote good practice is an increasingly common theme in political and business circles and over time will help to drive out the examples of bad practice.”
Get talking
While APSCo is keen to get the debate started there will of course be those digging their heels in for the status quo.
Tom concludes: “The REC is not opposed to licensing per se but agencies have highlighted a number of practical concerns such as the cost on already law-abiding agencies with no guarantee of a ‘return’ in terms of targeting the real rogue providers who operate ‘under the radar’.
“The run up to the next election is the right time to look ahead at the kind of regulatory environment that will enable the industry to flourish in the upturn. The licensing debate will continue but a potentially bureaucratic and costly licensing regime is not the only way forward. The REC will continue to fight for the best possible regulatory landscape for recruiters and to work constructively with existing Government agencies on the current enforcement drive.”
Trade associations are of course primarily concerned about protecting its membership, individual businesses will of course have their own strong opinions, but one thing is certain – if anything can be done to weed out bad practice and raise the public’s perception of the industry then it is worth talking about.
