The Use of Agency Staff and Outsourced Operations

Despite the efforts by some in the sector to improve worker protection, some exploitative practices can be found throughout the hospitality industry. They are particularly apparent when workers are recruited via agencies and in outsourced staffing operations.

Agencies supplying services and workers to the industry are subject to far less vigorous enforcement of employment regulation than in some other sectors, for instance agriculture and food processing, where employment law and workplace regulation for agency staff is rigorously enforced by the Gangmasters Licensing Authority.

This lack of effective enforcement of regulations creates a difficult operating arena for business:

Hotels are exposed to legal and reputational risk by their subcontractors.

Law-abiding, efficient hotels (and agencies supplying them with staff) are undercut by unscrupulous and illegal operators.

Abusive working practices include:

  • Irregularities over contracts
  • Irregularities over pay
  • Piece work rates that deny the minimum wage
  • Excessive hours
  • Excessive fees from agencies for services, food and accommodation
  • Bogus self-employment practices
  • Debt bondage via loans and charges
  • Physical and verbal abuse
  • In extremis, coercion, threats, trafficking and forced labour

How to ensure compliance with the law

All hotels should undertake effective due diligence on those agencies supplying them with labour and any operations those agencies are undertaking in their workplace. Particular attention should be paid to situations where agencies are also operating in a supervisory role. Ensure that you make proper background checks on agencies at the commencement of contracts. Schedule follow up checks and audit for evidence of correct payments and other benefits to workers. Follow the SEE Formula to assess your arrangements

Trade Associations

There are 2 main trade associations for the Recruitment / Staffing Industry. Both seek to uphold professional standards within the industry and have clear codes and ethics to which their members should adhere. Membership of a trade association however does not guarantee best practice or legal compliance and should not be used as a substitute for further effective scrutiny or due diligence.

The Association of Labour Providers is a trade association for organisations that provide staff mostly within the food, agricultural and other Gangmasters Licensing Authority (GLA) regulated sectors. Much of its work is also relevant to labour users, and labour providers in other sectors and many of its member companies also supply staff and services to other industry sectors.

The ALP have been at the forefront of efforts to improve Government and Regulatory policy across all sectors. They have also worked with major companies including several of the large supermarket chains to develop tools and guidelines for business that raise standards and promote good practice

The Recruitment and Employment Confederation is a professional body representing the interests of their members in Parliament, Whitehall, the European Commission and to wider civil society. They have a Code of Professional Practice for their members to follow and have a dedicated Hospitality Group amongst their members consisting of agencies supplying staff into the hospitality sector.

HMRC Download

Use of Labour Providers – Advice on due diligence [2 pages 144kb]