The REC urged shadow business secretary Chuka Umunna to hand over details of the allegations, following comments he made in the House of Commons last week.
Umunna accused six agencies of “profiteering” from selling “personal accident insurance to workers which they arguably do not need”. He named the agencies as Blue Arrow, Staffline, Acorn, Taskmaster, Randstad and Meridian.
He further accused a company, Gee 7 Groups, of specialising in “putting together these dubious arrangements for agencies”.
REC director of policy and professional services Tom Hadley said Umunna’s allegations of profiteering were “very serious” and urged the minister to “share any specific evidence he has to support these accusations against our members”.
“Let’s be clear, employment agencies are not doing anything wrong by offering workers the opportunity to purchase accident insurance,” Hadley said. “It’s a product that many other organisations offer to their members, including trade unions.
“Personal accident cover can be appropriate for workers in high-risk sectors such as rail and construction and can also cover them for accidents off-site that would prevent them from working, and provides them with an income whilst off work.
“By offering these benefits employment agencies are giving temp workers the same kind of support as that enjoyed by permanent contracted employees.
“As the professional body for the recruitment industry in the UK, we require all our members to abide by our code of conduct which requires them to be open and transparent with their workers.”
Hadley added that employers or employees concerned about the allegations could contact REC for advice.
Gee 7 Group’s director of IT denied the accusations made against his company. “Mr Umunna's claims are completely unfounded,” he said.
“We have established from his office that they are based entirely on false information supplied by a private source which was not verified before use.
“We are currently in discussions with Mr Umunna's office regarding this incident and are seeking a full and public apology.”
Business secretary Vince Cable responded to Umunna’s comments saying the Government would investigate the issue.
