EB regs - no opt out and direct to client

**The Lone Gunman** · 27 February 2007, 15:01

Originally posted by oraclesmith

I've just found something interesting in the EB regs on the DTI site.

http://www.dti.gov.uk/files/file24248.pdf

"Regulation 6(1) prevents employment agencies and employment
businesses from taking any detrimental action or including restrictive
terms in work-seekers’ contracts, which prevent them from either:
(a) i) terminating their contract with the employment agency or
business;
ii) working for others such as the client directly or through a
competing employment business;"

Does this mean that if you opt-in (or not opt out) then the familiar restriction on not working direct for the same client for X months after contract end (or having to pay the EB their unearned cut) can't be enforced ?

Anyone ?

You may be right. What does it say about the terms between the EB and the client?

**Bluebird** · 27 February 2007, 15:13

The item goes onto say though that you have to opt-out for this to be applicable- doesn't it ?

**oraclesmith** · 27 February 2007, 15:36

Originally posted by Bluebird

The item goes onto say though that you have to opt-out for this to be applicable- doesn't it ?

No, quite the opposite in fact :-

"It is important to remember, when applying regulation 6(1)(a)(ii), that the
term “work-seeker” includes limited company contractors and persons
supplied through limited company contractors that have not given notice
to opt out of the Regulations. This is as a result of the provisions of
regulation 32(3), which specifically extends the definition of work-seeker
to limited company contractors (which have not opted out of the
Regulations) in these circumstances. Therefore the agency or
employment business may not restrict either the person supplied by a
limited company, or the limited company itself from terminating the
contract with it and taking up work with a person other than it or the
limited company itself."

**Bluebird** · 27 February 2007, 15:47

so if you haven't opted in, then you've opted out by default ?

**The Lone Gunman** · 27 February 2007, 15:54

Originally posted by Bluebird

so if you haven't opted in, then you've opted out by default ?

Other way round. Opted in is default.

Try reading it. There is a link to it up there! It is not that long or complicated.

**oraclesmith** · 27 February 2007, 15:56

Originally posted by Bluebird

so if you haven't opted in, then you've opted out by default ?

No. If you do nothing, you're in. If you send the EB an opt-out before they introduce you to a client, then you're out. If you're out, you look better from an IR35 point of view, but lets not get into that.

Regulation 10 covers the agreement between EB and client and it's a bit tricky to work out. It seems to indicate that the EB can only charge the client a penalty if they engage contractor within 2 months of the end of the assignment. So this seems to indicate that the old 6 or 12 month tie-in's are illegal - at least they should be if there's been a couple of months gap between assignments. Although, I guess if you opt out, then anything goes.

**Bluebird** · 27 February 2007, 15:59

Originally posted by The Lone Gunman

Other way round. Opted in is default.

Try reading it. There is a link to it up there! It is not that long or complicated.

I did read it !

What it reads to me is that if you haven't opted out, then you are considered a workseeker, and you can't restrict a workseeker who has opted out.

Perhaps I'm being senile...

**oraclesmith** · 27 February 2007, 16:08

if you haven't opted out, then you are considered a workseeker, and you can't restrict a workseeker.

**Bluebird** · 27 February 2007, 16:09

Originally posted by oraclesmith

if you haven't opted out, then you are considered a workseeker, and you can't restrict a workseeker.

so the opting out refers to opting out of the legislation not the agency terms.

Now I understand !

EB regs - no opt out and direct to client