Expanding your recruitment business safely: tips from the legal team at JMW

This is a guest blog by REC Business partner, JMW

Expanding your recruitment business can be incredibly exciting, but it is also important to ensure you have the protections in place as you look to scale to protect your business. At times, we all need a helping hand and expert support on our side.

Whether you are expanding into new sectors or diversifying your current service offering for existing clients, the legal landscape becomes more complex. Below, we discuss some key issues recruitment businesses may face when considering new markets and models, what you may need and how JMW can support your business with its plans. 

Key considerations when expanding your service offerings

Your services

Expanding your services, such as offering Recruitment Process Outsourcing (RPO), Managed Service Provider (MSP) or entering new markets, can help attract new clients or deepen existing client relationships. Consideration should be given to whether your existing contracts match up or if they need updating with extra wording to work with these new bespoke arrangements. You may even need new agreements or new clauses that reflect the commercial realities of each arrangement – whilst ensuring legal protections are in place. With JMW’s significant recruitment law expertise, we can review and update your current terms or assist with drafting new bespoke contracts for you.

Your people

Another factor to be mindful of is that expanding into new service areas may place pressure on your existing workforce. Changes in roles, responsibilities, or expectations needs to be managed carefully, otherwise it can lead to employee dissatisfaction, grievances or even tribunal claims if not handled appropriately. It’s important to speak to staff in advance, make clear expectations and review whether your current employment contracts, policies and structures are fit for purpose.

This is also a good time to revisit the post-termination restrictive covenants you have in place for staff and whether these are appropriate.  Along with other support, JMW can provide expert advice on drafting and enforcing restrictive covenants to help protect your business interests.

Your structure

Where you are acquiring a new business or part of a new business, you may also need to consider compliance with the Transfer of Undertakings (Protection of Employment) Regulations in certain instances. Errors in handling employee transfers can result in costly disputes, liabilities, and reputational damage.

As well as supporting with the above matters and more, our team can conduct recruitment business audits to identify potential legal issues and highlight areas for improvement so you can build in better protection and systems.

Managing regulatory compliance and related issues

The UK’s Industrial Strategy highlights growth sectors and offers a number of opportunities for recruitment businesses. Recruitment businesses entering certain new markets, though, must be prepared for sector-specific regulation as well.

Certain government-backed projects also demand a demonstrable commitment to ethical standards, fair hiring practices and diversity.  Recruitment businesses may need to improve their processes and supply chains to reflect these values, particularly when bidding for public sector contracts or working with regulated entities. At JMW, we can provide regulatory advice and legal assistance tailored to specific sectors.

For recruitment businesses considering supplying temporary workers for the first time, it will be important for you and your staff to understand your obligations under the Agency Workers Regulations 2010. You may need to put in place policies for staff to ensure they understand your expectations here and/or additional training.

Our team at JMW also advises on compliance with the Conduct of Employment Agencies and Employment Businesses Regulations 2003, related transfer fee disputes and much more.  

Compliance with licensing standards and requirements of the Gangmasters and Labour Abuse Authority

Recruitment businesses who will or intend to operate in certain sectors such as agriculture, horticulture, shellfish gathering, associated food processing and packaging etc, should be aware of the regulatory framework enforced by the Gangmasters and Labour Abuse Authority (GLAA) and the requirements for a gangmaster licence.

Recruitment businesses operating in the relevant regulated sectors must be licensed and meet rigorous standards around pay, working conditions, accommodation, the treatment of workers and more. Operating without a licence is a criminal offence and can result in serious sanctions (such as prosecution, fines) and reputational damage.

Businesses entering new markets should consider whether GLAA licensing or other sector specific conditions apply.  Understanding your obligations is essential to maintaining compliance and ethical standards.

At JMW, we provide expert guidance on GLAA licensing requirements and supporting businesses with addressing such licence issues. We can advise on compliance audit requirements, worker protections, recruitment practices and more. We can also assist with responding to GLAA licence decisions and licence appeal cases.

Need some help? Get in touch with JMW

JMW’s expertise in recruitment law is recognised nationally, and we pride ourselves on our personable and effective service. Paul Chamberlain, Simon Bloch, Emma James and other members of the specialist recruitment team have provided advice and solutions to recruitment businesses for many years.  

Get in touch with one of our expert solicitors today 

Paul Chamberlain (0161 838 2762)

Simon Bloch (0161 838 2628)

Emma James (0161 507 1021)

Alternatively, please fill in JMW’s online enquiry form (ensuring you let us know you are also a REC member).

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