Tutor platforms are currently being targeted for inspections by the Employment Agency Standards Inspectorate (EASI), the regulator responsible for ensuring compliance with the private recruitment industry regulatory regime. Tutor platforms not yet in the EASI's sights should take heed.
What has led to this?
The purpose of the Employment Agencies Act 1973 (EAA) and the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (Conduct Regulations) is to protect hirers, work-seekers and the people they work with, in particular vulnerable people like children, by regulating the conduct of the private recruitment industry.
There are several years of history leading up to the current round of inspections of tutor platforms. The EASI has inspected and investigated tutor platforms for well over a decade. In 2016, the EASI launched Operation Pedagogue with the objective of ensuring tutor introducers' compliance with the recruitment industry regulatory regime. Of significance, in 2020, a group of "tutor introducing companies" challenged whether businesses like theirs were governed by the recruitment industry regulatory regime and lost. They applied to the High Court for a judicial review of the Department for Business, Energy & Industrial Strategy's decision that businesses like theirs must comply with the recruitment industry regulatory regime. The High Court refused their application and made a declaration to the effect that the "tutor introducing companies" must operate within the rules as "employment agencies" and comply with the EAA and the Conduct Regulations.
The companies which brought the challenge introduced private tutors to parents who paid an introduction fee to the relevant company if they hired a tutor for their child. The hired tutor provided their tuition services under a self-employed contract for services directly with the parents. The parents paid the tutor's fees into a client account held by the "tutor introducing company" and the fees were transferred to the tutor from that client account. The "tutor introducing companies" did not consider their businesses to be employment agencies within the scope of the recruitment industry regulatory regime because it was their view that the parents' engagement of the tutors as self-employed individuals meant that they did not fall within the definition of an employment agency under the EAA. The EAA defines "employment agency" as "the business (…) of providing services (whether by the provision of information or otherwise) for the purpose of finding persons employment with employers or of supplying employers with persons for employment by them". The definition of "employment" in the EAA is very broad. It includes "employment by way of a professional engagement or otherwise under a contract for services" and provides that "'worker' and 'employer' shall be construed accordingly". "Contract for services" is a term used in employment law to describe a self-employed contract. The High Court made a declaration that the definition of "employment" in the EAA includes natural or legal persons (which means individuals or entities like companies) who provide their services on a self-employed basis as an independent contractor. The tutors' self-employed status therefore did not take the "tutor introducing companies" outside the scope of the recruitment industry regulatory regime and they had to comply with that regime as "employment agencies".
Tutor platform businesses have reacted with incredulity on discovering that they are considered to be operating in the same way as a recruitment agency and regulated under the recruitment industry regulatory regime. Traditional recruiters actively work with their clients to understand the role for which they have a vacancy and introduce potentially suitable candidates to them. Tutor platforms allow tutors to post their profiles on their platform, where students or parents can look for and hire a tutor. It is the students or parents who look through the profiles for a tutor until they find a 'match'. Although the role of tutor platforms is passive in comparison to traditional bricks and mortar recruitment agencies, it is this 'matching' or selection service and the tutors' ability to post their profiles and market themselves on the platform which brings tutor platforms within the remit of the recruitment industry regulatory regime. Re-visiting the EAA definition of "employment agency", it is the "provision of information" about tutors on the platform which brings tutor platform businesses within scope.
Publications can be exempt from compliance. A business will not be an "employment agency" if the services it provides are those of publishing a newspaper or other publication (which includes websites and online platforms) which is not published wholly or mainly for the purpose of finding persons employment (as very broadly defined) with employers or of supplying employers with persons for employment by them. The publications exemption would apply, for example, to a newspaper, the primary purpose of which is to deliver the news, but which contains some job ads. However, although many tutor platforms have other service offerings, their main service offering (and usually sole or prime source of revenue) is the 'matching' service the platform provides as a 'middleman' publishing tutors' profiles, and so the EASI does not agree that the publications exemption applies to tutor platforms.
Key focus areas
Key areas on which the regulator focuses, and on which some tutor platforms fall down, include:
- Whether tutors are being charged a fee to use the platform: this is effectively charging the tutors for helping them find work, which is unlawful.
- Whether sufficient vetting is carried out, particularly when tutors are working with children under the age of 18.
- How tutors receive payment of their tuition fees.
To expand on this third point, some tutor platforms take a combined payment from the student or parent of the tuition fees and the platform fee. They keep their platform fee and pay the balance, the tuition fees, on to the tutor. Unlike those operating as "employment businesses", it is unlawful for tutor platform businesses operating as "employment agencies" (as defined under the EAA, i.e. agencies which introduce workers for direct engagement by hirers) to pay tutors their tuition fees or make arrangements for such payments to be made. The student or parent which engages the tutor must pay them their tuition fees. However, as a result of some hard work on The Tutor's Association's part, the EASI has agreed that, as long as it is not presented as the only payment option and the payment mechanism is not controlled by the tutor platform, the collection of both fees from the student or parent by a third party payment provider, which then transfers payment of the tuition fee element to the tutor and the platform fee element to the platform, is permitted. This is much more practical for all involved and the student or parent does not need to make separate payments of the tuition fees to the tutor and the platform fee to the platform.
What to do
Tutor platform businesses which have not yet fallen under the EASI's spotlight should review their compliance with the recruitment industry regulatory regime. EASI inspectors will review website and platform content and read terms and conditions of business. These should be checked for compliance. Business terms and website FAQs sometimes provide inspectors with evidence of non-compliant practices, as can interviews with tutors and students and record checks.
The EASI aims to help businesses comply with the recruitment industry regulatory regime. Where it believes there have been infringements, the EASI is likely first to issue a warning letter asking what remedial action the business intends to take, or has taken, to achieve compliance rather than pursue more serious enforcement action. However, tutor platform businesses should be aware of the potential consequences of non-compliance. These include individuals and/or the company being barred from running, or being involved in running, an employment agency or employment business for up to 10 years and prosecution for the criminal offence of failure to comply with the recruitment industry regulatory regime with the potential for unlimited fines. Compliance is therefore crucial.