What is the difference between an employment business and an employment agency in the uk?
In the UK, both employment businesses and employment agencies are involved in the recruitment and placement of temporary and permanent workers. However, there are some key differences between the two:
So, the main difference between an employment agency and an employment business is that an agency is focused on permanent and temporary recruitment, while a business is focused solely on temporary placements and acts as the employer of the temporary workers.
How are employment businesses and employment agencies regulated in the UK?
In the UK, employment businesses and employment agencies are regulated by the Employment Agencies Act 1973, which was amended by the Conduct of Employment Agencies and Employment Businesses Regulations 2003.
These govern the conduct of the private recruitment industry, and set minimum standards for employment agencies and employment businesses operating from premises in Great Britain (ie England, Wales and Scotland). The Conduct Regulations 2003 apply where an employment agency or an employment business provides work-finding services to a work-seeker.
Neither an employment agency nor an employment business can:
They are also required to comply with a range of further regulations, including:
The legislation also provides for the inspection and enforcement of these regulations by the Employment Agency Standards (EAS) Inspectorate, which is part of the UK government's Department for Business, Energy and Industrial Strategy (BEIS).
Employment agencies and businesses that fail to comply with the regulations can face penalties, including fines, revocation of their license, and legal action. Therefore, it is important for employment agencies and businesses to operate in compliance with the regulations to avoid any legal or reputational risks.
Setting up an agency or employment business?
For new entrants into the market, it's essential to get advice on the appropriate documentation to be used in your agency or business.
The regulations are complex and have to be complied with and it's important the required procedures are followed. The EAS has extensive powers to investigate and sanction non-compliant companies. You can start by reading the EAS's Brief Guide for Agencies.
See also our article on The Employment Conundrum- determining employment status.
Publisher: Atkins-Shield Ltd: Company No. 11638521
Registered Office: 71-75, Shelton Street, Covent Garden, London, WC2H 9JQ
Note: This publication does not necessarily deal with every important topic nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice. The information contained in this document is intended to be for informational purposes and general interest only.
Atkins-Shield Ltd © 2023