John Bissell’s letter (Recruiter, March 18) questioned why the Recruitment and Employment Confederation (REC) believed an industry bond scheme was not viable.

Our experience is based on work undertaken in 2004 with Marsh & McLennan who investigated the ABTA model, which operates by way of an individual company going to market, buying a bond and covenanting it to the trade association. The bond obligor agrees to pay ABTA in the event of the member company going out of business with ABTA, then reimbursing the customers. This is not a legal obligation.

To work effectively, the system would need to be mandatory industry-wide. It could be a condition of REC membership but we would need a clear mandate from members. A member survey carried out in 2004 fell well short of the mandate required. One of the reasons was that for many small members, the bond cost would be prohibitively expensive and disproportionate to the level of risk in the temporary staffing sector.

For Marsh & McLennan to negotiate with insurers to provide such a bond, they would have needed data from every REC member on the average numbers of temp workers in any given week and their average weekly payroll. Obviously such information would have been difficult to obtain due to the scale of the operation and some members were reluctant to provide this. For these reasons, we did not proceed.

However, should John Bissell garner more industry support, then it is certainly worth
revisiting in these recessionary times.

• Fiona Coombe, solicitor, director of professional services, REC