Recruitment Industry: directors' liability
The Department for Business, Innovation and Skills ("BIS") have published a press release on the successful prosecution of Richard Hayter, former director of employment business WHG Offshore Ltd ("WHG") (which can be found here). Although we have been unable to find a case transcript, we are able to summarise the legal issues as follows:
- WHG breached Regulations 12 and 14 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 ("the Conduct Regulations"), by failing to pay wages to the complainant, Victor Apiafi, and by failing to include in their terms with the complainant:(i) the fact that WHG was operating as an employment business; (ii) an undertaking that WHG to pay work-seekers for hours worked, whether or not WHG were paid by the hirer/end user client; and (iii) the minimum rate of remuneration that WHG expected to pay Mr Apiafi.
- Under section 5 of the Employment Agencies Act 1973 ("EAA 1973"), any person who fails to comply with the Conduct Regulations shall guilty of an offence and liable: (a) on conviction on indictment, to a fine; (b) on summary conviction, to a fine not exceeding the statutory minimum.
- BIS were able to prosecute MR Hayter personally for WHG's breach of the Conduct Regulations under section 11 EEA 1973 which states that where a body corporate has commited an offence under the Act with the consent of or connivance of any director, manager, secretary, or other similar officer, that officer, as well as the body corporate, shall be guilty of the offence and shall be personally liable to be proceeded against and punished accordingly.
For further information on the issues raised in this article, please contact a member of the Spencer Wyatt team on 020 7925 8080 or by email at firstname.lastname@example.org.