In his speech at the Labour party conference in Brighton this week, Miliband described the alleged practice as part of the UK's "race to the bottom", grouping it alongside employers not paying the minimum wage and "shady gangsters exploiting people".
Miliband said that none of these practices would be allowed should Labour win the next election.
Name calling politics
REC chief executive Kevin Green said it's the third time Miliband has said this and "it's simply not true".
"We have asked for the evidence and nothing has been produced," said Green. "Rather than engaging in name calling politics, Labour should be building relationships with key business sectors, especially one that focuses on getting people into work.
"Ed Miliband should focus less on demonising the recruitment industry and more on how we should train and invest in our young people so that they are better placed to get the jobs available."
The labour leader made similar comments in a speech at the Institute for Public Policy Research in July 2012 when he said: "When they work well, these agencies can play a crucial role in our economy. And the majority do. But some recruitment agencies operating in Britain are now effectively open solely to foreign workers. They exclude local workers from their books."
Green said employers and the recruiters that help them must look to the EU and beyond to source the skills they so desperately need.
"Politicians should do more to support UK businesses who are keen to hire staff rather than adding further red tape," Green said.