Guidance on Employment Agency Provisions in the Employment Act 2008
Overview of the legislation relating to agencies in the Employment Act 2008
Section 15 – Offences: mode of trial and penalties
Section 16 – Enforcement Powers
Section 17 – Offences by partnerships in Scotland
Section 18 – Employment Agencies and national minimum wage legislation: information
Section 15 – Offences: mode of trial and penalties
This makes certain offences under the Employment Agencies Act 1973 (the 1973 Act) triable either on indictment in the Crown Court or summarily by the magistrates’ court. The offences affected are:
- Failure to comply with a prohibition order;
- Contravention of any regulations made under the 1973 Act; and
- Requesting or receiving a fee for providing work-finding services (except in those sectors such as entertaining and modelling where agencies are entitled to charge for these services under certain circumstances).
At present, under section 5(2) of the 1973 Act, any breach of the regulations governing employment agencies is a criminal offence, triable as a summary offence in a magistrates’ court.
By making the most serious offences under the 1973 Act triable either on indictment in a Crown Court or summarily in the magistrates’ court, the maximum penalty is increased to an unlimited fine where the case is tried in indictment.
In addition, making offences triable on indictment enables the Employment Agency Standards Inspectorate to prosecute for “attempting” to commit offences under the 1973 Act (eg attempting to obtain money for providing work-finding services). The Inspectorate can bring a prosecution for attempting to commit one of these offences on the basis of evidence obtained from the agency’s records, without the need for agency workers to give evidence as witnesses.
Section 16 – Enforcement Powers
This Section strengthens the powers of Employment Agency Standards (EAS) inspectors by:
- Enabling them to require a person carrying on an agency to provide financial records and documents;
- Enabling them to require a person carrying on an agency to provide records, documents and information at such time and place as the inspector may specify;
- Enabling them to require a person concerned or formerly concerned with the carrying on of an agency to provide records, documents and information at such time and place as the inspector may specify (where the agency has been asked to provide the information specified and has not done so);
- Enabling them to require banks to provide financial information regarding agencies (where the agency has been asked to provide the information specified and has not done so); and
- Enabling the inspectors to remove documents from an agency in order to take copies.
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Detail
Subsections 2 and 5
Subsection 2 introduces a new power enabling inspectors to inspect financial records or other financial documents on the premises. As there are concerns that an agency may simply claim that they do not have the financial records or documents, supplementing this, subsection 5 introduces another important new power enabling inspectors to, on written notice, to require a bank to furnish the financial record or document where the person carrying on the employment agency has failed to comply with a request in writing to do so.
Limits have been placed on the circumstances in which the new power can be used to ensure a proper balance between the needs of the EAS Inspectorate to determine whether the agency in question is generally compliant or otherwise, and the need for confidentiality and privacy of information. The power will only be applied where the agency has been given written notice to provide the specific information by a particular date and has not done so.
Subsection 5 also introduces a new power enabling inspectors, on written notice, to require a person concerned with the carrying on of an agency or formerly so concerned to furnish records and documents where the person carrying on the employment agency has failed to comply with a request in writing to do so.
Occasionally inspectors have faced difficulty obtaining information from an agency where a former member of staff may have removed self-incriminating evidence or where the records being withheld by the agency may point to another person being involved with the running of the agency (eg in circumstances where they are subject to a prohibition order) . Currently there are no powers to require the third party who is or has been involved with the agency from providing that information.
Subsection 4
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This subsection provides the power for an inspector to require the person carrying on the employment agency to furnish the inspector with a record, document or information, by giving notice in writing. Subsection 4 therefore provides the power while subsection 5 provides a mechanism for the inspector to obtain the required record, document or information where the person carrying on the agency does not comply with a notice given under subsection 4.
By placing the requirement to furnish the inspector with a record on the person carrying on the employment agency or employment business, having previously been notified in writing, it should assist inspectors in their inspections because it is the person running the agency and not the person who happens to be present on the premises at the time of the inspection who will have access to all the necessary records.
Currently an EAS inspector has the power to request from any person present on the premises to inform him of the whereabouts of any record or document which is not on the premises at the time of the inspection and to make arrangements, if reasonably practicable, for the document to be made available at the premises for inspection. Frequently the person present on the premises will not necessarily be the person carrying on the agency (eg it could be a secretary or receptionist) and will not have knowledge as to where the record may be or the ability to make it available for inspection.
This subsection also provides that the inspector may specify when and where the information must be supplied. This means the inspector will not need to revisit the inspected premises but can inspect the record, document or information at a convenient place of his/her choice.
Subsection 6
This subsection provides that the inspector may take away a record or document for the purpose of taking a copy before returning it.
While EAS inspectors already have the right to enter any relevant business premises to inspect any records or documents kept in pursuance of employment agency legislation and to take copies of any such records or documents, they currently have no right to remove records from the agency premises.
This power therefore extends the existing power, ensuring that the inspector will no longer need to rely on copying facilities at the business premises.
In reality, this power will only be used when there are no facilities to take copies inspected on the agency’s premises or the agency is non-cooperative. There is no intention to keep records and documents – they will be removed for the sole purpose of making copies and as such, will be returned as soon as is reasonably practicable.
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Subsection 8
This subsection is necessary so that the offence of obstructing an inspector in the exercise of his powers is widened to include the new powers in the Act.
Section 17 – Offences by partnerships in Scotland
This section provides that, where a partnership in Scotland has committed an offence under the Employment Agencies Act 1973, any partners who may be culpable may be prosecuted as well as the partnership.
There is a difference in the law on partnerships under English and Scottish law. Under Scottish law, a partnership is a separate legal entity distinct from the individuals who make up the partnership. No provision was made in the Employment Agencies Act 1973 (the 1973 Act) for Scottish partnerships. Until the late 1980s, specific provision tended not to be made in legislation for offences committed by Scottish partnerships, as it was then considered unnecessary. However the lack of references to Scottish partnerships in earlier legislation is now causing difficulties, for example in relation to health and safety offences. Section 17 corrects this anomaly.
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Section 18 – Employment Agencies and national minimum wage legislation: information
The aim of this section is to improve enforcement of the National Minimum Wage and employment agency standards by allowing officers appointed under the relevant legislation to share information with each other for the purpose of their respective enforcement functions. Currently, there are legal constraints on the exchange of information between them.
At present, the EAS Inspectorate can only contact HM Revenue & Customs about potential non-compliance with the minimum wage before they have undertaken an inspection when a complainant has clearly stated that there is a minimum wage issue or where this is clear from the nature of the complaint. Once an inspection has started, however, it is a criminal offence to disclose information obtained during the inspection.
The “gateway” introduced under Section 18 will allow minimum wage and employment agency officers to pass information about an employer’s compliance to each other for the purposes of their enforcement functions.
Officers will be able to pass information that an employer has been found to be non-compliant. The majority of information passed under the gateway is likely to be of this type.
The gateway will also allow officers to pass information that an employer has been found to be compliant. Although of less importance than information about an employer’s non-compliance, information that an employer has been investigated and found to be compliant could be of use to the other enforcement body in the context of their risk assessment analysis, for example to avoid repeated visits to the same employer.
It might also be the case that officers, while finding that an employer is compliant for the purposes of their own legislation, uncover information during their investigation that may suggest that the employer is non-compliant with the other legislation. Such information would also be disclosable under the gateway.
Information is most likely to be transferred on individual cases on the back of intelligence gained during inspections.
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