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Licensing debate is dead says REC

The REC has today spelled out its clear and unequivocal opposition to any extension of the current Gangmasters Licensing regulations into other sectors of the industry.

In a letter to Dr Vince Cable, the Secretary of State for Business, REC Chief Executive Kevin Green welcomed the new Government’s initial steer on cutting red tape and underlined the need to avoid adding yet more regulation and cost on the recruitment industry.  

Spelling out the industry’s line on licensing issues, Kevin Green says: 

“There have been calls by the Trade Unions and other parties for an extension of licensing across the industry. The REC opposes this as we believe there are more effective ways of raising standards, tackling rogue businesses and protecting workers. The recent feedback from our members has enabled us to be explicit on this with the incoming Government.  

 “We are working hard to limit the cost and bureaucracy of new regulations already in the pipeline such as the AWR and pensions reform. The last thing we need is another shake-up of our regulatory environment. 

 “Extending licensing would create substantial costs for recruitment businesses. In addition, it simply would not work on the ground.  The end result would be already- compliant agencies having to fund an unwieldy and bureaucratic machine whilst rogue providers continue to operate under the radar.” 

Green continued:

“While licensing is not the way forward, enhancing industry standards is a critical part of the REC’s mission. We will continue to play our part by driving our standards agenda and by working with Trade Unions and existing Government inspectorates to deliver effective and properly targeted enforcement.  

“The Government has put enterprise and reducing regulatory burdens at the centre of its programme.  The licensing debate is dead: we need to move on and focus on some of the real priorities for the industry.” 

The REC sits on the Board of the Gangmasters Licensing Authority (GLA) and supports the aim of addressing the continuing activities of rogue gangmasters in the agriculture sector.  

The REC’s arguments against extension into other sectors are as follows:     

• Recruitment business will have to pay for the licensing regime – the Government will not fund it. The real rogues will ignore it; the outcome would be additional cost and bureaucracy for already compliant businesses
• Our industry has more regulation than any other service industry – we also have government enforcement – what would licensing add?
• Licensing is an intervention in the competitive landscape. Clients are best placed to decide who they want to work with workers already have a number of regulatory bodies to defend their rights (GLA, BIS, HMRC etc).
• Our industry had a licensing regime up to 1996 - it didn’t work. Even though we support the aims of the GLA, there are legitimate questions over how many rogue providers have really been put out of business since its inception.
• Instead, we propose strengthening the existing Employment Agency Standards Inspectorate – In particular, through more inspections, better prioritisation and risk-assessment and greater use of penalties to deter offenders.
• We also recommend a coordinated auditing process and greater sharing of intelligence between REC, GLA, EAS, CQC, HMRC and HSE all who have an interest in raising standards. 
• The REC will continue to drive standards through its own inspections, complaints procedures and enforcement of the industry Code of Professional Conduct.