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Tuesday 28 February 2017

Tackling the legal challenges in the recruitment sector

Mon, 04 Jan 2016 | By Graham Simons


While recruiters have low levels of awareness of challenging legislation hitting the industry this year, such as the Modern Slavery Act or ‘strikebreaker’ proposals, the good news is those that can adapt policy and processes have a significant opportunity to protect against potential claims and even steal a march on their rivals.

This was the conclusion of Irwin Mitchell employment partners Christopher Tutton and Glenn Hayes, discussing the findings of a major survey by the law firm and Recruiter at the Recruiter Show in London’s Barbican Centre in November.

Crossing the picket line
For the first time in more than four decades, recruiters face the possibility of being permitted to supply agency workers as cover during industrial action. While government completed a consultation on the plans in the summer, the proposals are news to almost half of recruiters, with 49% unaware of them.

Three-quarters (74%) thought the proposals would not have a positive impact on business and Tutton observed it remains unclear whether agencies will be able to find temp workers willing to cross picket lines.

“Finding staff that are prepared, willing and able to work in a situation where there is an industrial dispute going on might be a challenge,” he told delegates.

But proposed changes permitting the use of strikebreakers is not the only area that recruiters lack awareness of. The Modern Slavery Act, which came into effect in October, ensures companies with a turnover of £36m or more are now required to state publicly what they are doing to ensure their supply chains are slavery free.

Slavery obligations
The survey shows 67% of recruiters are not aware of the requirement, while 93% of recruiters do not undertake any training regarding slavery and human trafficking.

The research also shows 77% of recruiters do not cover slavery and human trafficking anywhere within their human rights or corporate social responsibility policies, and 86% do not include obligations that client and sub-contractors will comply with the Act within their commercial agreements.

“You may be thinking ‘well this doesn’t apply to us — we’re too small’,” Tutton told delegates. “But the reality is, if you supply any large business, you are part of their supply chain and then you have to carry out checks on your labour.

“The guidance talks about there being an increased obligation on organisations to really vet the suppliers they are using.”

And those that can demonstrate to clients they are aware of the legislation can benefit, Tutton adds. “In the coming months I would expect your clients to be asking you what your procedures say about modern slavery, and [would] want assurances and contractual promises — guarantees that you do comply with the Modern Slavery Act,” he said.

“Being prepared and proactive is a good way to differentiate yourself from your competitors because 67% aren’t aware of it.”

Overseas recruitment
Not all legislation coming in this year has had a widespread major negative impact on recruiters.

The research found only 20% thought immigration rules in the UK are unduly restrictive — 64% did not, while 82% said provisions banning ‘overseas only’ recruitment that came into force in January have not had a negative impact on their business.

And recruiters can mount a defence against cases brought, Tutton said. “There is a defence for failing to advertise roles in Great Britain if you can show it’s disproportionate and you wouldn’t find the candidates. You need to have the evidence of why you are having problems.”

Complacency continues
Some issues are always a bone of contention for the sector, however, and in these buoyant times for the industry there is evidence of complacency among agency owners particularly when it comes to employee covenants.

Almost seven in 10 (69%) recruiters thought the contracts of their senior employees contained clauses that sufficiently protected their organisation’s confidential information, intellectual property and other commercial interests should these employees leave. But just 30% had audited these contracts within the past year and more than a quarter (26%) had lost work to a competitor following the loss of a senior member of staff.

Meanwhile 92% have not held back on recruiting senior-level employees for fear that may be accused by a competitor of including a breach of contract.

But 30% said they were more likely to litigate against a former employee that may have
breached their covenants than they were a year ago.

Hayes advised recruiters to take pre-emptive action and look for the warning signs employees may be about to jump ship.

“Consider how to spot the warning signs in your business,” he said. “Little things such as, are people going off into private rooms? Are they having phone calls on their mobile phone? Are people arranging meetings outside of the office, clustering in corners?”
He identified two reasons to look out for such signs. One was to protect your business if an individual leaves, and the second was “you might need to discipline them while they are there”.

He added: “If they are ultimately sending things to their Hotmail account or actively trading against you while still in your employment, you might decide you want to terminate their employment straight away.”
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