The letter, from Deborah Harrison of Central London Recruitment Services stated: 'This ill-conceived and unnecessary legislation will spell the end of recruitment agencies, forcing all jobseekers, regardless of age, status, experience and so on, to resort to the job centres to find temporary or permanent employment, or answer discreet advertisements in the newspapers.'

The Recruitment and Employment Confederation were quick to quash the allegations, but the incident highlighted the fact that a lot of recruiters are unaware of the scope of the new regulations that are soon set to directly affect them and their companies.

Marcia Roberts, External Relations Director of REC, immediately sent a letter to the Daily Mail in response, saying: 'It's true to say that had the regulations been enacted in their original format the effect on the industry could have been potentially disastrous. The main bone of contention for all recruiters has been the payment of the temp-to-perm fees that the Government originally sought to abolish in its entirety. Had this been put in place the financial implications could have ruined many employment agencies.'

Miss Roberts believes that the survey indicates a general acceptance by members that the secondary set of proposals will be closer to balancing the needs of all parties favourably. She explains: 'We recognise that there are still some areas that need addressing, in particular the limited company contractor issues, but clearly these secondary proposals have been positively influenced by the report we submitted in September 1999.'

The Confederation has also said in a statement: 'We know from our consultation with members that amendment of the current Regulations was not welcomed by the industry. In addition, we do not think the Government has produced the substantial evidence it should have done to prove that many of the amendments in the proposed new draft were necessary.'

The regulations state primarily, that a recruiter must make it clear to all parties whether it is operating as an employment agency (seeking to find permanent positions for candidates) or an employment business (supplying candidates on a temporary basis, with the recruiter itself employing the workers).

Hope remains for agencies fearing the worst from the new regulations, as a post-election DTI reshuffle, possibly headed by the current E-commerce Minister Patricia Hewitt, could be willing to change controversial regulations in the drafting of the Act. Parliamentary sources have indicated that this might lead to a redress of the Department's position on quarantine periods for temp-to-third party fees.

Additionally, the Conservative party has been quick to take a tough election stance on the more controversial elements of the Employment Agencies Act, with the primary emphasis similarly addressing the all-important 'quarantine period.'

David Heathcoat-Amory, Shadow Secretary of State for Trade and Industry said of the party's stance on the Act, 'The Government were condemned by the Commons Select Committee who praised employment agencies for the work they do, but Ministers are still committed to intervene. Labour fail to understand that this is a competitive industry with low barriers to entry. Rather than improving competition, the effect of these regulations will be to hit predominantly small businesses with further regulation.'

The proposed regulations have not yet been finalised and have now been frozen by a prorogued parliament, however, the logic behind the drafting of the proposals remains the same as when it was first released in May 1999. This, fundamentally, was to 'combat industry practices which are perceived as having a detrimental effect on the flexibility of the labour market.'

Shout99 will be following developments in the Employment Agencies Act very closely over the next few months.

Related stories:

Agencies start to fragment into splinter groups

ATSCo call proposed industry regulations "disastrous"

Agency regulations

--
Richard Powell, Shout99