Recruiters and industry trade bodies have raised fears about the impact of possible changes to the Conduct Regulations governing agencies, which they say could damage the industry.

Concerns were raised following publication of a consultation document by the government this week.

One area of particular concern raised by the Department of Business Enterprise and Regulatory Reform (BERR) document is the current opt out (from the Conduct Regulations) available for limited company contractors.

Toni Cocozza, managing director of IT recruiter dp connect, told Recruiter the current opt out for limited company IT contractors was “working well for both contractor companies and agencies”.

Removing it would be “absolutely ridiculous” and would be a case of the government “not listening to the industry”, she says. 

Ann Swain, chief executive of APSCo, adds: “Most contractors in professional and business occupations opt-out of these regulations as a matter of choice because of the amount of red tape they impose. The regulations significantly slowdown the process of getting work, while providing few benefits for highly paid contractors who usually earn more than their permanent equivalents.
 
“If the opt-out is taken away the cost of supplying contractors will rise at a time when many recruiters are struggling in the current market.

Tom Hadley, external relations director at the REC (Recruitment and Employment Confederation) told Recruiter that removing the opt out would mean “extra hassle and paper work” for agencies who would have to switch to dealing with contractors on a PAYE basis.

 “A lot of agencies will have to rapidly change their processes, especially those operating in the higher end of the IT contractor market,” he adds.

Another under review is the checks, such as ID checks, currently carried out by recruiters on candidates.

Hadley says there is “a level of confusion” at the moment about whether recruiters or employers should carry out these checks, and that clarity is needed.  He suggests that one option might be for agencies to only carry out checks on shortlisted candidates.