Transfer fee restrictions – should they stay or should they go?
No consideration of this subject can be complete without recognising the government’s plan to introduce guaranteed hours for supply workers, included in the Employment Rights Act 2025.
Put simply if you supply a contractor to a client and there is a law in place that requires the client to offer the contractor a permanent job with guaranteed hours, how would the client react to being charged a transfer fee if the contractor accepts the job?
Not only that, but how would it affect your costings and current operations if the period of supply is always going to be subject to this rule. So for example you may contract to supply a contractor for 6 months, but the guaranteed hours law obliges the client to offer a permanent job after 3 months.
No one yet knows what the timescales will be for the qualifying period, i.e. the period of supply after which the client must offer a permanent job, as this has not yet been set. But the principle is clear.
The Agency Conduct Regulations (the Conduct of Employment Agencies and Employment Business Regulations 2003) are currently subject to consultation that expires on 1st May 2026. One of the areas being looked at is transfer fees, which are currently restricted by regulation 10. Should transfer fees always be allowed regardless of guaranteed hours, should they be left to negotiation, or should they be disallowed altogether?
A further consultation on guaranteed hours is due to be published shortly. These issues should be synchronised if the right result is to be achieved.
Come and join us and DBT at our seminar on 15th April 2026 in London for discussion on this and other topics relevant to the current consultation. This is your chance to assess the issues, and express your opinion. It is important for businesses to participate in this consultation if they want to help shape the future of the recruitment industry and we look forward to seeing you.
