ourEconomy: Investigation

Revealed: How rogue employment agencies are exploiting the COVID crisis

Scams and exploitation from UK employment agencies have increased by two thirds during lockdown, yet the government is failing to take action.

Victoria Noble
9 September 2020, 8.04am
Steve Parsons/PA Archive/PA Images

Employment agencies operate at the heart of almost every key worker profession, employing around one million workers in the UK. It has long been an industry rife with exploitation, including recruitment scams, non-payment and even modern slavery.

But according to SAFERjobs, a charity that assists flexible economy workers, the spike in unemployment caused by the COVID-19 pandemic is being capitalised on by criminals. The charity has seen a 66% increase in complaints about scams and exploitation from employment agencies since the UK entered lockdown.

Rachel Keane, 25, became unemployed at the beginning of lockdown after a job offer was withdrawn. She immediately uploaded her CV online and applied to over 50 roles, from kitchen porter to cleaner and store assistant.

“I was just so stressed at the prospect of not knowing where my money was going to be coming in from,” she told openDemocracy. “I was panicking about how I was going to survive and pay my rent.”

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In response to an application, she was contacted by Steve from a company called ‘Happy Nurses’, who offered her a job as a key worker, giving non-medical bedside care during the pandemic. It seemed like the perfect opportunity.

“I was really keen to help in the crisis,” she said. “I consider myself to be someone who is good-willed and it really appealed to me to do something to help and ease the pressure.”

Steve told Keane that she could start immediately but she would have to pay for a police check, known as a DBS, which would be reimbursed on the first day of training. After Keane paid him £50 over Paypal, he stopped returning her calls. She then contacted CV-Library, who said Steve’s account had been removed for suspicious activity. Her bank was unable to refund the money.

“I was thinking things were going to pick up and it would be ok and this happened,” she said. “It’s disgusting that people would use this time when you’re stressed and not looking out for the signals that you would usually.”

A £50 loss was significant for Keane when she was struggling financially but she said that CV-Library were “rude” and made her feel “very small” when she tried to complain.

“When it’s from a recognised job board, you trust that they’ve done enough on their side,” she added. “CV-Library call themselves the UK’s leading job board – how can you say that when they clearly can’t put the correct measures in place to prevent this?”

Neil Grogan, Head of Customer Service at CV-Library, told openDemocracy that they operate “a strict vetting process” for companies who advertise jobs on their website. They also partner with SAFERjobs.

The company said: “In this particular case, we accept that ‘Happy Nurses’ did advertise a job on our site for a limited amount of time. As soon as it became apparent that this was a suspicious account it was swiftly removed from the site and the company was blocked from using our services. We then contacted all candidates who had applied for the role to remind them not to make any payments or provide personal information.”

SAFERjobs revealed that they had received three separate reports about ‘Happy Nurses’ and believed it was connected to another scam which had four other cases. They suspect this is the tip of the iceberg, estimating they are only aware of 5% of the criminal activity that occurs. Once they receive a report, they provide free advice and then pass on cases to the relevant authorities, such as the government or Metropolitan Police.

The vulnerability of this sector has always been overwhelming. SAFERjobs’ Chair, Keith Rosser, said that part of the problem is the complexity of different employment models being used: “There’s well-known ones – zero hours, agency workers – then there’s things like umbrella, limited company, contractor, direct engagement.”

The sectors most targeted are low-paid professions where workers might be desperate for employment or have less awareness of their rights. Rosser said that fraudsters “don’t want any barriers for people to apply” so most of the scams take place at “entry level” in sectors like warehousing, construction and healthcare.

An incredibly complex system coupled with vulnerable, low-paid workers creates a labour market rife with criminal activity.

“I’ve got some of the best minds in labour market policy working on this and we’re struggling to tie it down,” Rosser explained. “How can the average worker have any chance of working this out?”

Unpaid hours

There is a huge range in the types of exploitation. Some of the most common scams involve fake recruiters seeking money from job seekers upfront – like ‘Happy Nurses’. SAFERjobs also deal with exploitation in work – “everything from modern slavery to underpayment”. Agencies who fail to pay workers when on the job are very common.

Denis Sciupakov, a 43-year-old father of two from Lithuania, came to the UK in 2009 to provide a better life for his children. He was approached by an employment agency, Rex Recruitment Driving Limited, in 2016 for driving jobs in East Anglia. Its director, Kurtis Greatorex, promised lucrative container driver jobs and Sciupakov worked for him for a month and a half.

“Usually the payments came every Friday,” said Sciupakov. “After I didn’t receive two or three Fridays of payments, I called Kurtis and told him that he owed me money. He said: ‘I will pay you, I will pay you, tomorrow, later.’ I called him the next day and he said, ‘There’s a problem with the banks.’”

“After about three weeks, I went to a different agency and someone there said, ‘Kurtis, I know him, you are not the first person who has come to my agency after not being paid by him.’”

Sciupakov’s ordeal was compounded when he was diagnosed with a brain tumour and needed immediate surgery.

“I called him [Greatorex] two weeks after the operation. I sent him pictures and said: ‘Why are you not paying my money, just give me my money back,’” said Sciupakov. “He wrote me a message saying: ‘Don’t worry, I will pay you.’ He hasn’t.”

Sciupakov calculated that he was unpaid for around 130 hours of work and took the case to employment tribunal. Rex Recruitment Driving Limited did not respond throughout the process and the case went undefended. The company was ordered to pay Sciupakov for the unpaid wages. It was also fined for failing to provide a contract and payslips, bringing to the total amount awarded to over £5,100. Even after tribunal, the company did not pay Sciupakov.

Companies House records show that Kurtis Greatorex remains the sole director of Rex Recruitment Driving Limited.

“I spent so much time and a good amount of money because I paid for a consultation with the lawyers and I still didn’t get paid,” said Sciupakov.

“I’m lucky because I’m still healthy and I’m still alive,” he continued. “But that £5,000 would have helped.

“I would have spent it on a brilliant holiday for my family. All our life is for our kids.”

openDemocracy contacted Kurtis Greatorex, who advertises himself as the Business Owner of Rex Recruitment on his LinkedIn page. He said: “I have no knowledge of a tribunal nor a D Skuipakov [sic]”.

Keith Rosser says the employment business sector is particularly vulnerable because “there’s no barriers to entry”.

“It’s quite shadowy, you can set yourself up on Companies House tomorrow and you can be a recruitment company next week,” he said. “You can set up a recruitment agency, keep your head down and the likelihood is that no one will come knocking on your door ever. If you’re a fraudster you can make good money.”

He is also worried that criminals exploit gaps in UK legislation that are supposed to regulate this industry.

“You’ve got all these efforts by people to try and avoid being included in UK legislation,” he said. “Management can just about get around it by stationing themselves in Europe or avoiding the legislation by claiming to be a ‘market place’ or a ‘gig platform’ or whatever the latest trend is.”

Job boards like Indeed or LinkedIn, whose offices are in Ireland and the US, dominate the job-seeking market but sit outside UK laws.

“There’s real challenges for government. How do you keep up to date with legislation that was written in 1973 and updated about 15 years ago?” said Rosser.

The UK government has regulated employment businesses since 1976 through the Employment Agencies Standards Inspectorate (EAS) due to the potential for criminal exploitation. In the mid-90s, there were only 8,000 agencies operating but that has now increased to over 31,000. Their turnover is £58 billion.

Yet with only 11 full time-inspectors and a budget of under £1 million, it is “dwarfed by the size of the sector it is meant to regulate,” said Matthew Taylor, the Director of Labour Market Enforcement, in his latest report.

“At March 2019 levels of resourcing there was one inspector per 2,850 agencies,” he said in the report. “They [EAS] still remain almost completely unknown by the public.”

Failure to prosecute

Even when employment agencies have been found guilty of wrongdoing, EAS has failed to take action. Employment tribunal decisions have been published online since February 2017 and a search of the online database seems to suggest that Rex Recruitment Driving Limited has only been taken to tribunal once.

But openDemocracy has searched the paper records of tribunal cases before February 2017, which are kept on file in Bury St Edmunds County Court. This revealed that Rex Recruitment Limited, whose director is Kurtis Greatorex, was taken to employment tribunal in May 2016 – prior to Sciupakov’s tribunal. This was also for unpaid wages and Rex Recruitment Limited was ordered to pay another employee almost £1,500.

EAS can take punitive action, prosecuting employers or banning them from running employment agencies. Yet last year there were only two prosecutions. In this instance, tribunal records reveal that Kurtis Greatorex had an official track record that wasn’t fully investigated, leaving Sciupakov vulnerable to the same scam.

A government spokesperson said: “The government will not tolerate the exploitation of workers for commercial gain. The Employment Agency Standards Inspectorate uses a range of tools to enforce the law, including issuing Labour Market Enforcement undertakings, and in the most serious cases, criminal prosecution.”

With 730,000 people losing their jobs in lockdown, criminality in the sector will only get worse. Yet with EAS inadequately funded, it’s up to marginalised workers to self-report through charities like SAFERjobs or fight cases through tribunal.

“I think there is more government should and could do,” said Rosser. “On EAS’ current resource, if they were to inspect every recruitment agency in the UK, it would take 200 years.”

SAFERjobs can be contacted with any concerns about employment agencies here.

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