Like most sales-oriented businesses, recruitment and headhunting firms can receive a tough time from the media, and it is often the actions of the few, which tarnish the industry reputation.
Advertising and candidate recruitment is a critical part of any employment agency business.
However, compliance must be actively policed by firms to ensure that advertising and professional standards are not breached.
Government regulation vigorously protects businesses and consumers, and failure to adhere to these standards could result in a professional indemnity claim or worse still, a prison sentence!
The REC (Recruitment & Employment Confederation) and other trade bodies are working tirelessly to improve standards, including their Good Recruitment Campaign.
What are the regulations?
The Conduct of Employment Agencies and Employment Businesses Regulations 2003
Regulation of the Recruitment Industry is clearly defined under this act setting out the firms’ legal obligations and service requirements.
Explicit reference is made to advertising in the act, which sets out the required practices, in particular under section 27.2 as follows:
(2) Neither an agency nor an employment business may issue or cause to be issued an advertisement about positions which hirers seek to fill unless the agency or employment business has—
- Information about specific positions of all types to which the advertisement relates; and
- In relation to each such position, the authority of the hirer concerned to find work-seekers for that position, or the authority of an agency or employment business, which has such authority to issue the advertisement or cause it to be issued.
Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the Business Protection from Misleading Marketing Regulations 2008 (BPRs)
- In 2008, even greater clarity arrived, both for consumers and businesses, extending regulation far beyond the existing advertising regulation.
- At the heart of the new rules was the need to Treat Consumers Fairly (applicants and the public) and act with Professional Diligence.
The greater emphasis on professionalism further enhances the Duty of Care owed by Consultants and Recruitment professionals to their clients, and, in turn, clarity that breaches of this duty of care could result in civil action and increased Professional Indemnity Insurance exposure.
The Key issue - Treating Customers Fairly
The CPR’s prohibit firms from acting unfairly by:
- Providing or giving false or misleading information
- Hiding or failing to provide material information
- Exerting undue pressure on consumers
- Failure to act and demonstrate professional diligence
- Engaging in ‘banned practices’ such as CV baiting
What is CV Baiting?
The use of “Baiting” or “Bait Advertising" is not just confined to the job or recruitment industry and is clearly prohibited under CPR and BPR regulations.
Any form of marketing or advertising, which could be deemed to be making false or misleading claims to attract potential candidates could fall foul of these rules.
Typical examples include:
- Continuing to advertise a role which has already been filled
- Advertising a role which does not yet exist
- Advertising attractive “Salary boundaries” which the employer would have no intention of agreeing. e.g. salary up to £100,000, when the maximum the employer will pay is £75,000.
Civil or Criminal Proceedings
Local Authority Trading Standard Services (TSS) and other consumer bodies have a duty to enforce these regulations.
The severity of the breach will determine the punishment but could result in a Crown Court conviction, an unlimited fine, and/or up-to two years imprisonment.
Professional Indemnity Insurance
Recruitment Consultants Professional Indemnity cover provides protection against claims for negligence resulting from a breach of duty of care.
As an “expert” in the field, the law dictates an increased duty based on the advice and services provided by agents in the course of their occupation.
Where a business or consumer suffers a financial or physical loss as a result of the recruitment or staff agencies actions they can seek rectification or compensation and PI Insurance can assist in defending actions and ultimately cover the cost of any liabilities.
Recruitment consultants PI insurance will not extend to cover deliberate acts but will provide protection for accidental breaches of the CPR and BPR regulations.
For complete peace of mind, speak to your Business Insurance Broker to ensure you have the correct level of cover and full civil liability protection in place.
Recruitment Insurance Review
Insync can provide a FREE no-obligation review of your insurance requirements, including office and Professional risks.
You can book a slot via our website, or alternatively, you can compare professional indemnity quotes online.