Many thanks for your patience. Employment agencies make their money by hiring out workers to end user clients. So if the end user wants to directly employ the worker and therefore bypass the agency’s involvement, the agency would understandably not be too happy about that. They usually try and prevent that by including certain clauses within their contracts (either with the worker or the end user, or both) that prevents this or places restrictions on how and when it can happen, most commonly by introducing transfer fees or penalties (known as temp to perm fees).
As far as the law is concerned, this situation is dealt with under The Conduct of Employment Agencies and Employment Businesses Regulations 2003. They do not prohibit the use of transfer fees but they do place restrictions on how they can be applied.
To be able to charge fee the contract must also have a clause allowing for an extended hire period. Therefore, the end user would have a choice of either continuing to employ the worker for an extended period of time through the agency or pay the transfer fees to employ them straight away.
It is important to note that if there are provisions for the payment of a fee and/or an extended hire period, the Regulations state that they are unenforceable beyond 8 weeks from the termination of the contract (or, if longer, 14 weeks from the start of the contract). So after these time limits have passed the end user can do as they wish and they would not be bound by any restrictions from the agency.
So effectively this creates a situation where an end user client who wishes to employ a contractor directly will have 3 options:
1. Pay the transfer fee stipulated in the contract to end the worker’s obligations to the agency immediately and be able to hire them as soon as possible
2. Continue with the extended hire period and hire the worker through the agency and once that is over to employ them directly
3. Stop using the worker through the agency and wait for the specified 8 or 14 week period to pass before hiring them directly.
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