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Recruitment Agencies

The Equality and Human Rights Commission November Update
Monday 14th November 2016

The Equality and Human Rights Commission (“EHRC”) published a research report on 11 November 2016 which is based on research conducted in August 2015 on employer and employee practices, perceptions and experiences in relation to recruitment.

The aim of the report was to understand if workers:-

(a)   were treated differently on the basis of nationality, specifically as between UK-born and foreign-born workers (with a right to work in the UK);

(b)   what evidence (if any) was there in relation to different treatment; and

(c)   what may be the cause of the treatment.

As most companies are aware, the purpose of the Equality Act 2010 is to provide protection in relation to discrimination in nine areas. These nine areas are known as “protected characteristics’, one of which is race (which includes ethnicity and nationality).  The Equality Act 2010 makes it unlawful for employers and their agents to discriminate against people seeking employment, ensuring they treat applicants fairly in all aspects of recruitment.

The research focused on five areas - computer programming, food and beverage services, social care, accommodation (hotels, hostels etc.) and food manufacturing as it was deemed these areas had a high proportion of foreign-born workers with a mixture of skill levels.

The following key conclusions were reached by the EHRC:-

  • There were a small number of examples of employers’ and recruitment agencies’ approaches that may lead to an exposure of potential discriminatory practices;
     
  • There was evidence of a lack of knowledge about the law which could lead to unlawful discriminatory practices;
     
  • In most circumstances workers were recruited on the ability to do their job, rather than their nationality; and
     
  • Throughout the report the EHRC flag up where the evidence may indicate the potential for discriminatory practices.

The EHRC highlighted that recruitment professionals need to obtain more assistance from suitably qualified experts to understand their legal obligations in relation to recruitment so they are not exposing themselves to claims that they are discriminating against candidates on the basis of their nationality.

Our specialist recruitment team here at Brabners in Manchester, can offer this support.  If  you have any questions on this research report or have a requirement for any advice please do not hesitate to contact Paul Chamberlain, Emma Clarke or Laura Pointon on 0161 836 8800.


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Recruitment Blog - British vacancies for British workers?
Thursday 15th January 2015

There are certain areas of the UK labour market in which a large proportion of the workforce may hail from outside the UK. Examples include seasonal workers in the agricultural sector and certain roles in the construction industry, which attract large numbers of foreign nationals into the UK, aided by the rules relating to the free movement of people between European Economic Area (“EEA”) countries.

As of last week, the government has implemented what could be considered a restriction on non-British workers being hired to work in “GB vacancies”, namely vacant positions “the duties of which are ordinarily to be performed in Great Britain". However, it is actually rather less of a restriction than that.

From 5 January 2015, employment agencies and employment businesses are prohibited from advertising vacancies for jobs based in Great Britain exclusively in other EEA countries. To be more specific, an employment business or employment agency can only advertise a “GB vacancy” in another EEA state if either:

  • It also advertises the vacancy in English in Great Britain at the same time as it advertises the vacancy in the other EEA state; or
  • It has advertised the vacancy in English in Great Britain in the period of 28 days ending with the day on which it advertises the vacancy in the other EEA state.

Breaches of this restriction would constitute a criminal offence and may result in an action in damages.

The new provision has been introduced as an amendment to The Conduct of Employment Agencies and Employment Businesses Regulations which have been in force since 2003 and regulate how the recruitment industry operates. However, this is much less than a positive requirement for British workers to be recruited into British roles or, conversely, any restriction on using labour from other EEA countries. Subject to regular discrimination laws under the Equality Act 2010, which prevents detrimental treatment on the grounds of nationality, recruiters will still be able to recruit from European countries outside of Great Britain as long as they are complying with the requirement also to advertise in Britain.

Our initial thoughts on this new piece of legislation are that it will only affect the limited number of recruitment companies who have historically recruited predominantly or exclusively in other EEA countries, perhaps as a result of the sector that they are recruiting into. The fact that there were only 31 respondents to the Government’s consultation on the matter, the majority of which were unable to provide evidence of any practices of advertising exclusively in other EEA countries, tells a story as to how much of an impact this will really have. However, from the Government’s point of view, it is likely that this is considered a step towards creating more of a level playing field for British workers at a time where competition for jobs is fierce and international. 


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The Holiday Pay Headache - Commission
Thursday 27th November 2014

The calculation and payment of holiday pay for workers can be the cause of some major headaches in the recruitment industry. Many recruitment businesses will be aware of the problems with “rolling up” holiday pay into a worker’s hourly rate (namely, that the practice is unlawful following a European case called Robinson Steele v RD Retails Services Ltd), but what about calculating the amount of holiday pay due where an element of the worker’s pay is based on commission or another variable component?

It has been difficult to avoid the press coverage of the recent Employment Appeal Tribunal decision in the joined cases of Bear Scotland Ltd v Fulton and another, Hertel (UK) Ltd v Woods and others and Amec Group Ltd v Law and others, relating to the inclusion of overtime in the calculation of holiday pay. It is worth taking a look back at a case which preceded Bear v Fulton and dealt specifically with the subject of commission.

Many may take the view that when a salesperson is not working due to being on holiday, they are not able to make sales so should not be entitled to receive any commission element. However, the case of Lock v British Gas Trading Ltd confirmed that is not the correct approach.

Mr Lock is employed by British Gas as a sales consultant and receives a basic salary plus commission based on the sales he achieves, which is received some time after the relevant sale. During a period of annual leave, he was paid only his basic salary, plus commission from previous sales which fell due during that time. As he was not making sales during his holiday, he suffered a reduced income during subsequent months due to a lack of commission.

A claim was brought for unpaid holiday pay and the case was referred to the European Court of Justice (ECJ) by the local Employment Tribunal, which considered it appropriate to ask the Advocate General for an opinion on the calculation of holiday pay in these circumstances. The Advocate General decided that Mr Lock’s holiday pay should include an amount to reflect the commission he would have otherwise earned had he not taken annual leave as this was “intrinsically linked” to the performance of tasks under his contract. In other words, he should be compensated for the fact that he would not be able to make sales and earn commission during his holiday.

It was noted that the purpose of the right to paid holiday was to allow workers to actually take their holiday entitlement – remember, holiday is a health and safety consideration as much as anything else, aimed at avoiding burnout through overworking. Previous case law had determined that a worker’s holiday pay should be calculated in a way as to ensure they are not worse off because they have taken holiday. Otherwise, workers may be deterred from taking their holiday entitlement.

British Gas asserted that the sales targets it sets its workers take into account periods of holiday during which they would not be making sales, and that the rate of commission it pays takes into account the fact the worker will not be generating commission during their holidays. These arguments failed, with the latter raising issues in terms of “rolling up” holiday pay, as referred to above, in any event.

The arguably rather strange outcome of this decision is that it means workers may actually be paid more while on holiday, making up for the fact they will earn less in the period after the holiday, due to actual commission not being generated during that time.

The case will now return to be considered by the Employment Tribunal and it is likely that the Advocate General’s guidance will be followed. However, the Advocate General made it clear that it is for the domestic Tribunal to determine the method and rules which are appropriate, such as in relation to the amount of the additional pay, how the calculations should actually be made and with what reference period.

This is an important decision for businesses in the recruitment industry. It is vital that holiday pay processes are reviewed, particularly where workers earn a regular commission or other variable payment linked to the work done, and changes are considered as may be necessary. The additional burden in terms of the levels of holiday pay due could have an effect on an employment business’ margins and it should be considered whether the changes should be reflected in the rates charged to its clients. 


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