The Stage

Major loophole spotted in up-front fees laws

Published Tuesday 16 February 2010 at 13:35 by Matthew Hemley

New legislation to tackle up-front fees has been labelled “a sham”, after it emerged that agencies registered abroad will be immune from the proposed government crack-down.

The revised regulations, due to be brought into force this October, ban agencies representing extras, models and walk-ons from charging potential clients up-front fees. Meanwhile, other performers, including actors, will see a current seven-day cooling off period - designed to give people the chance to change their minds before committing money - extended to 30 days.

However, critics this week said the new laws would be worthless, after a major loophole emerged. Companies will be able to flout the law and continue to charge up-front fees if they are not actually trading from within the UK.

The Department for Business, Innovation and Skills has admitted that a company that trades abroad does not fall under the scope of the regulation, even if it provides a UK postal address on its website and positions itself as a casting company for British performers.

Ben Seale, managing partner of directory Spotlight - which will fall under the scope of the new legislation - criticised the loophole and said BIS had admitted there is nothing it can do other than “work with the industry to create greater awareness of potential rogue operators”.

Meanwhile, Equity walk-on councillor and up-front fees campaigner Clive Hurst said: “Again, we see this Labour government putting in sham agency regulations, which quite clearly will have little or no effect, because they are, yet again, riddled with loopholes.”

The loophole came to light after Hurst lodged a complaint with the Employment Agency Standards about an agency charging up-front fees to include people on its database which gives a London address on its site and has UK website.

The EAS, the department within BIS responsible for enforcing legislation, wrote to Hurst, informing him that the company was “outside of the scope of the regulations”, because it trades abroad. It added that the London address listed on the website is only a postal address.

Hurst has now raised concerns that it will be easy for companies to set up registered businesses abroad and list UK postal addresses, which will allow them to continue charging up-front fees.

He claimed the only way to tackle the issue would be to make sure all agencies are licensed.

However, a spokesman for BIS said: “The Employment Agencies Act 1973 is UK legislation and, therefore, applies to businesses that trade from premises within Great Britain and have a presence in this country.

“The EAS has no jurisdiction over any employment agency that operates outside the UK. However, if a foreign business has a subsidiary here, other legal avenues could be explored.”