Consumer Legislation
Which legislation governs consumer rights?
The Consumer Rights Act 2015 and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 together with other long standing pieces of legislation cover contractual relationships involving individuals that are consumers and businesses as traders. There have been a number of amendments to UK consumer law in recent years because UK consumers found the legislation complex, out of date and in some respects disjointed. Both the Act and the Regulations address consumers concerns, they also contain provisions that are accessible and create a fair balance between the rights of consumers and the rights of traders.
What is the Consumer Rights Act 2015?
The Consumer Rights Act came into force on 1st October 2015, and consolidates other components of consumer legislation. It sets out the consumer’s rights and remedies for the supply of services, the supply of digital goods and the sale of goods and it also introduces changes to unfair terms in consumer contracts. The Act enhances protection to consumers by including more ‘consumer friendly’ terms as well as ensuring that the legislation is easier to comprehend.
As recruiters mainly provide services, the following requirements will form part of the contract and will be binding on the individual as a consumer and the recruiter as a trader:
- All the pre-contract information provided by the trader to the consumer will be treated as a term in the contract.
- Services must be provided by the trader with reasonable care and skill.
- If the contract does not include an agreed price and the consumer has not paid for the services then the trader must charge a reasonable price.
- If the contract does not include an agreed time for performance of the services, then performance must take place within a reasonable time which will be a question of fact depending on the circumstances.
- The right to require the trader to perform the services again where possible, provided the consumer is not inconvenienced or charged and the services are concluded within a reasonable time and/or
- The right to request a reduction in the price agreed for the service.
What are the Consumer Regulations?
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 came into force on 13 June 2014 (‘the Regulations’). Before this, the Consumer Protection (Distance Selling) Regulations 2000 and the Cancellation of Contracts made in a Consumer's Home or Place of Work etc. Regulations 2008 used to govern consumer contracts but have since been repealed.
The Regulations govern a number of contracts made between a trader and a consumer and apply to contracts entered into on or after the 13th June 2014. The Regulations contain some exemptions such as contracts for residential lettings, packaged travel, single telecom connections, financial services and so on. The services of an employment business or employment agency to an individual does not fall within the exemptions and therefore the Regulations apply.
Who is a Consumer?
‘Consumer’ means an individual acting for purposes which are wholly or mainly outside that individual’s trade, business, craft or profession; this will typically be an individual such as service user, a parent that requires child care or candidate that require services that do not constitute work finding services and are provided at a charge to the work-seeker such as CV writing/portfolio preparation, training, photographic services and so on. Such additional charges are not restricted under the Employment Agencies Act 1973.
Who is a Trader?
‘Trader’ means a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf. This will typically include an employment agency or employment business providing services to an individual that is a consumer.
What is a service contract?
‘Service Contract’ means a contract, other than a sales contract, under which a trader supplies or agrees to supply a service to a consumer and the consumer pays or agrees to pay the price.
What types of contracts do the Consumer Regulations cover?
A number of contracts agreed between traders and consumers are covered and the Regulations divide the contracts into three categories. The obligations under the Consumer Regulations differ depending on where the contract is concluded. The contract can be concluded in three ways:
- ‘On premises’ - at your offices; or
- ‘Off premises‘- outside your offices, for instance during a visit to the consumer at his/her home or someone else’s home which could be a friend or relative of the consumer or at the consumer's place of work; or
- ‘Distance contract’ – neither you nor your consumer are physically present and you use a form of distance communication which could be email, post, online or the telephone (this is a non-exhaustive list of forms of communication).
What are the information requirements?
The employment agency/employment business must provide the consumer with specific information which will form part of the terms of engagement and failure to do so will constitute a breach of the contract. The information must be provided before the terms of engagement are agreed and in a format that is comprehensible. With regards to off premises contracts, the provision of information requirements apply where the costs of the service is above £42. The information must be provided by hard copy, email or in another durable form where the information is personally addressed to the recipient; it will remain as drawn and can be stored.
- your identity;
- the details of the services you will provide;
- your telephone and fax number and email address;
- total charges for services, additional charges, frequency and arrangements for payment;
- confirmation of the duration of the terms of engagement;
- length of time to perform the services;
- confirmation of the minimum duration of the consumer’s obligations under the terms of engagement if applicable;
- details of the charges at each stage where the terms of engagement will be ongoing;
- details of the costs associated with using distance communication to conclude the terms of engagement if they are above a basic rate;
- complaints handling policy;
- the terms of engagement and details of the assignment;
- full details of the conditions, time limits and the procedure for exercising a right to cancel the terms of engagement; and
- notification to the consumer that if your services are urgently requested and you supply a worker within the 14 days cancellation period, the service user will be responsible for paying the reasonable costs of the service and they will lose the right to cancel.
- Full details of the complaints handling policy and where complaints can be sent;
- How to access the REC’s Code of Professional Practice;
- Identity and geographical address of any third-party trader if you are acting on their behalf. This could be applicable to managed service providers, intermediaries such as umbrella companies or personal service companies if they are in the supply chain
- Complaints handling policy of any third-party trader
- Details of Charges for telephones calls if above the basic rate (if applicable);
- Details of any out of court mechanisms to resolve complaints or disputes which the employment business has access.
What are the rights to cancel?
The Consumer has the right under the Consumer Regulations to cancel the contract. The information on the consumer’s right to cancel must be provided in accordance with Schedule 3 of the Consumer Regulations. The Consumer can terminate the contract during the 14 days cancellation period without an explanation or liability where contracts are concluded off premises or if it is a distance contract (see definitions above). If you do not provide consumers with information about their right to cancel then the cancellation period is extended to 14 days, starting from the day after the day that you give them this information. The longest that the cancellation period can be extended to is 12 months from the day after the normal cancellation period would have ended.
If the Consumer cancels the contract within the cancellation period you should acknowledge receipt of the notification and refund the sums paid using the same means of payment. The refund should be paid within 14 days of receipt of the cancellation notification and you must not charge the Consumer for processing the refund. Under the Consumer Regulations you are not required to start providing your services before the end of the cancellation period unless the Consumer gives you written notice to do so. If your services are urgently requested and you provide your services within the 14 days cancellation period, the Consumer will be responsible for paying reasonable costs for the service provided.
What are the penalties for non-compliance?
Failure to comply with the Consumer Regulations may result in the contract being unenforceable., In serious cases, the trading standards services can apply for a court order requiring you to comply with the order and if you fail to do so then the maximum penalty is a fine and two years' imprisonment.
Where can I get more information?
Please see the links below for more information:
Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.