Written by Brabners LLP
On 28 March 2019, new legislation was passed that requires employment businesses to provide work-seekers with a Key Information Document, before obtaining the work-seeker’s agreement to the terms of their engagement. The new legislation is named the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019 (“the 2019 Regulations”).
The change follows a proposal contained within the government’s policy paper, the Good Work Plan, which was published on 17 December 2018. As you may have seen, one of the key aims of the Good Work Plan is to provide better clarity for employers and workers when it comes to their work arrangements. The impact for umbrella businesses is that more information is likely to be sought from them (pay information in particular) by the employment business so that the required information can be provided.
What has to be included in the new document? When do the changes come into force? Read on to find out!
The 2019 Regulations will amend the existing Conduct of Employment Agencies and Employment Businesses Regulations 2003 (“the 2003 Regulations”).
To add some context, under Regulation 14 of the 2003 Regulations, employment businesses have to ensure that the work-seeker has agreed terms before the business provides any workfinding services to them. Currently, all documents containing terms must be provided before these services are provided by the employment business. This will continue, but the new changes go a step further by requiring that certain key information is also provided to work-seekers before they agree to any terms.
Summary of the changes
Before a work-seeker agrees to any terms, an employment business must provide a work-seeker with a Key Information Document. The changes come into force on 6 April 2020 and will apply to employment businesses only, not employment agencies. An employment business supplies persons engaged by it to act for, and under the control of others. The supply of temporary workers on assignment should for example fall within scope.
In terms of what will be required, the document must be separate to any other documents provided to the work-seeker and must have the title “Key Information Document” at the top of the first page. It should be clear and succinct, on a maximum of two sides of A4-sized paper, and be easy to read, using characters of readable size.
Immediately under the heading, the document must state that it:
- Specifies key information which relates to the relationship between the employment business and the work-seeker and, where applicable, any person to be supplied by the work-seeker to carry out the work;
- Where necessary, identifies documents where further related information may be found; and
- Includes the contact details of the appointed officers and informs the work-seeker, and where applicable, any person to be supplied by the work-seeker to carry out work, that they may contact those officers if they are concerned about a breach by the employment business of the Conduct Regulations.
What other details are required will vary slightly depending on whether or not the work-seeker is the person to be supplied to carry out the work or not (i.e. whether they are a limited company (excluding PSCs though) or the individual who will actually carry out the services). For example, if an umbrella company is involved then the employment business will have to ensure that the Key Information Document contains different details including, for example, details relating to pay, non-monetary benefits, any deductions costs or fees and an illustrative example of take-home pay. This is not an exhaustive list of what the employment business will need to provide, but it is clear that specific pay information will be needed from the umbrella company in order for the employment business to be able to include all of the required information.
Whilst the 2019 Regulations are not anticipated to have a significant impact on the private, voluntary or public sectors, the changes will provide greater transparency for workers about the terms they are signing up to. The changes also mean that employment businesses and umbrella businesses will need to work together to ensure that the required information is ready early on and before terms are agreed with the worker.
From a practical perspective, employment businesses should look to familiarise themselves with the changes early on, ensuring that internal processes are reviewed and legal advice sought where necessary to minimise future risks around compliance. Records should also be kept of when and how the information is provided. Umbrella businesses should ensure that they are prepared for queries from employment businesses and can easily provide prescribed information to them to avoid delay in the supply arrangements.
This bulletin is for general guidance purposes only and should not be used for any other purpose. Brabners is a Limited Liability Partnership.