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OT - Regulation 32 (9) of the Conduct of Employment Agencies and Employment Businesses



Westdene Seagull

aka Cap'n Carl Firecrotch
NSC Patreon
Oct 27, 2003
20,938
The arse end of Hangleton
Something boring for any of the NSC contractors trading as a Ltd company. Mrs W has just started a rolling contract that needed to be charged for via a Ltd company. She now has a Ltd company but the agency that introduced her to the end client are asking her ( or more precisely her company ) to opt out of the "Conduct of Employment Agencies and Employment Businesses Regulations 2003 ".

I've done a little bit of reading but it's as clear as mud to me !!!! Any advice as to whether it's a good idea to opt out or not ?
 


Tom Hark Preston Park

Will Post For Cash
Jul 6, 2003
69,880
Something boring for any of the NSC contractors trading as a Ltd company. Mrs W has just started a rolling contract that needed to be charged for via a Ltd company. She now has a Ltd company but the agency that introduced her to the end client are asking her ( or more precisely her company ) to opt out of the "Conduct of Employment Agencies and Employment Businesses Regulations 2003 ".

I've done a little bit of reading but it's as clear as mud to me !!!! Any advice as to whether it's a good idea to opt out or not ?

I was an IT contractor for yonks. Always ticked that 'opt out' box. As I understood it, it just made the recruitment agency a lot less responsible for the recruited pseudo-employee. IMHO, nothing to worry about, you expect as a contractor to have much less job security than a permanent employee. The trade-off is you have the added security of a bit more money in the bank, which, to be honest, is pretty much the only security worth having nowadays. Safe to tick the box if contracting is your other half's preferred way forward, as she'll get asked to tick that opt-out box every single time she gets offered a contract. Nothing bad will happen by ticking it.
 
Last edited:


Postman Pat

Well-known member
Jul 24, 2007
6,971
Coldean
This seems to cover it....

http://www.contractoruk.com/agencies/5158.html

Q: How does it come about that (limited company IT) contractors working through employment agencies are asked to opt in or opt out of the Regulations?

A: The opt out was designed originally to give a choice to highly skilled, professional personnel in the IT and finance sectors who wanted to operate as limited companies due to tax advantages but may not have wanted to be governed by the Regulations.

Q: Why might agencies request that the contractor opts out? Are agencies legally entitled to try to influence a contractor’s decision to opt out, or in?

A: There are many reasons for requesting an opt-out. The Regulations limit attempts to restrict workers after the end of the contract which means that the agency is at risk of these individuals, their customers, working direct and cutting them out. In addition under an opt-in, the contractor must be paid, even if the client does not pay or sign a time sheet.

Also the agency, where a worker has opted-in, is required to agree terms in writing before the contract. Plus, there is the potential administrative burden on the agencies placed on them by the Regulations to check suitability and to ensure this suitability is maintained after placement. However, agencies should not try to influence whether or not the contractor opts out and cannot make this a requirement (see Regulation 32(13)) , no matter how strongly they claim to the contrary!

Q: What are the tangible advantages of opting in to the regulations? And what protections or assurances could a contractor benefit from if they opt in?

A: As mentioned, the Regulations require terms of any placement to be confirmed in writing, prevent any contractual term stating that the contractor cannot work direct, and require payment to be made even if the client does not. These are just a few of the advantages of opting in that contractors report.

Q: What are disadvantages of opting in to the regulations? Or what are the perceived benefits of opting out?

A: Opting out gives greater flexibility. You do not need to ensure that the agency has sufficient information under the Regulations about your skills to place you in the first place which can be a cumbersome and time consuming process.

There is also an argument that if you do not opt out this may cause issues with regard to IR35 because the Regulations only apply to a worker who is under the “control” of the end user and by not opting out the contractor is essentially saying that they are under control. Control is an indication of employment, a test for which underpins an IR35 assessment. Despite this, in my experience, opting out of the Regulations is agency driven, and in some cases a requirement so that the agencies can avoid the more problematic issues the Regulations cause. Make sure you read Part 2 of these FAQs for more detail on opting-in/out and IR35. .

Q: Are there any problems that might confront the contractor subsequent to opting in or opting out?

A: If the opt out is provided after “introduction or supply” [of the work-seeker] it is not valid. It will only apply in respect of subsequent (new) contracts. In my experience, few agencies arrange for an opt-out to be signed before an introduction to the client - so many opt outs are worthless and the Regulations apply. Often however this is a problem for the agency and of benefit to the contractor.
 


SUA Seagull

Well-known member
Jul 23, 2016
408
Stratford-upon-Avon


Westdene Seagull

aka Cap'n Carl Firecrotch
NSC Patreon
Oct 27, 2003
20,938
The arse end of Hangleton
Thanks guys ..... I think Mrs W will be opting out.
 



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