Opt out of Conduct of employment agencies 2003 act?

[Wanderer]

Didn't see this mentioned but REC isn't helping the situation with their guide to contractors which can be found here REC Leaflet Guide for Limited company Contractors pdf free ebook download from www.itsecurityteam.co.uk

To be fair though, they are saying pretty much the same thing as the PCG's guidance. For example the PCG say that "those working outside IR35 are likely to want to opt out of the Agency Regulations" and "the majority of PCG members will wish to opt out" even though they go on to say that the opt out isn't actually going to be anything more than a minor IR35 pointer at most.

Of course, both the PCG and the REC make no recommendation either way because everyone's circumstances are different.

Things are a lot clearer now than they were when the regulations were first passed into law. I remember that there was a lot of talk about opted in workers being "treated by the recruiter akin to a PAYE worker" and opted out workers being "genuinely self-employed with greater flexibility" but this is sounding pretty dated now. The initial fears that the regulations would damage the contracting market have proven unfounded. I've had agency contracts which are exactly the same for both opt-in and out except that the handcuff clause and payment clauses have a * saying they only apply if the worker opted out.

So there are no IR35 implications, the background checks would be carried out by any prudent agency and that only leaves the commercial considerations (payment guarantees and restraint of trade). I can't see that an astute business person would want to opt out of this legal protection for their business though I can understand that an agency would want their workers to waive these protections as it's good for the agency business.

[SueEllen]

Didn't see this mentioned but REC isn't helping the situation with their guide to contractors which can be found here REC Leaflet Guide for Limited company Contractors pdf free ebook download from www.itsecurityteam.co.uk

it does have a bit of a scare paragraph on page 2 saying...

<snip>
If you are
genuinely self-employed then you may wish
to consider opting out so as to maintain your
tax advantages.</snip>

Seems very strongly worded so it is no wonder the agents are convinced...

But we aren't self-employed.

Every contractor who works through an agency is either a temp of the agency or has to use a legal entity that is separate from themselves.

The agents know this themselves as they always ask you whether you work through an umbrella or a limited.

[Wanderer]

But we aren't self-employed.

Hmmm, it's a poor choice of phrase. It should probably read "in business on your own account" when they say "self-employed".

[NDawg]

Got an interesting e-mail from an agency this morning regarding a contract position. Pimps sure are getting creative with their words nowadays huh?

NOTE: I've already been introduced to and had an interview with the client, so even if I sign this, from what I understand, it's invalid and completely unenforceable.

As a part of our Recruitment process we do require for you to complete the attached Opt Out Form.

The vacancy which you have applied for is that of a Contractor and therefore requires any applicant to opt out on the Conduct Regulations 2003 should they wish to be considered.

There is provision in the Conduct Regulations 2003 for companies and the workers whose services they supply to opt out of the Regulations.

For more information regarding the Conduct Regulations 2003 please use the link provided below:

What are the conduct of employment agencies and employment businesses regulations 2003?

In order for you the Contractor to opt out then please read, sign and return the attached form. If there is anything you are unsure of, you are recommended to seek independent legal advice.

[malvolio]

Got an interesting e-mail from an agency this morning regarding a contract position. Pimps sure are getting creative with their words nowadays huh?

NOTE: I've already been introduced to and had an interview with the client, so even if I sign this, from what I understand, it's invalid and completely unenforceable.

As a part of our Recruitment process we do require for you to complete the attached Opt Out Form.

The vacancy which you have applied for is that of a Contractor and therefore requires any applicant to opt out on the Conduct Regulations 2003 should they wish to be considered.

There is provision in the Conduct Regulations 2003 for companies and the workers whose services they supply to opt out of the Regulations.

For more information regarding the Conduct Regulations 2003 please use the link provided below:

What are the conduct of employment agencies and employment businesses regulations 2003?

In order for you the Contractor to opt out then please read, sign and return the attached form. If there is anything you are unsure of, you are recommended to seek independent legal advice.

I would send that to the EASI team at BIS. While they can make opting out a condition of trade, you cannot demand that the worker opts out before being submitted; that is restraint of trade. And while you should opt out before meeting the client, this removes your choice to opt back in should circumstances warrant it. It would be interesting to see their comments...

[northernladuk]

I would send that to the EASI team at BIS. While they can make opting out a condition of trade, you cannot demand that the worker opts out before being submitted; that is restraint of trade. And while you should opt out before meeting the client, this removes your choice to opt back in should circumstances warrant it. It would be interesting to see their comments...

Didn't Cojak confirm it is not illegal to enforce this. It is a business decision if an agency wants to deal with Opt Out contractors only. They are just saying if you want to go with them Opt Out, which according to Cojaks mail they can do.

EDIT : Here it is...

http://forums.contractoruk.com/accou...ntractors.html

I can advise you that it is not illegal under the Employment Agencies Act 1973 or Conduct of Employment Agencies and Employment Businesses Regulations 2003 for an employment agency or employment business to insist that they will only seek work for work-seekers who will agree to opt out of the Conduct Regulations. This is a business decision that employment agencies or employment business might make without contravening the employment agency legislation.
I hope this has clarified the position.
Regards
XX XX
Head of Employment Agency Standards
Department for Business, Innovation and Skills

[Wanderer]

NOTE: I've already been introduced to and had an interview with the client, so even if I sign this, from what I understand, it's invalid and completely unenforceable.

From my reading of the law this is quite likely to be true.

However, the agency will choose to interpret the legislation their own way and it won't stop their bluff and bluster. Personally I think you could opt out and they would back down if it came to a legal dispute but it's not been tested in court and the agency could argue that by opting out, it shows that the intention of both parties was that the regulations should not apply.

Don't opt out if you can possibly avoid it.

The vacancy which you have applied for is that of a Contractor and therefore requires any applicant to opt out on the Conduct Regulations 2003 should they wish to be considered.

Bulltulip.

If the client wants you then they will take you on. In fact, it's better for both you and the client if you don't opt out.

Of course the agency will sell the client a line of bulltulip trying to confuse the Agency Conduct Regulations with the Agency Worker Regulations and bulltulip the client into thinking that the opt out is somehow related to the AWR and therefore a good thing for the client.

I say take the do nothing option. Sit tight and see if you get offered the position. If you do then get them to send the contract and opt out form to you but don't sign or return the opt out form. When they start chasing you about it, just stall. When it comes to the crunch tell them that after taking legal advice your LTD has decided not to opt out.

If they threaten to withdraw the contract offer then it's time to go nuclear on them.

Point out that this is illegal under the Agency Conduct Regulations section 32(13) and your solicitor says that you could bring a civil action against the agency to recover the actual losses suffered by your company which could be up to the full value of the lost contract.

Also tell them that you will contact the client and explain in detail why you are not willing to opt out and how the agency conduct regulations protect both the client and the contractor.

It's hard ball but remember that the agencies do this sort of tulip day in day out. They KNOW they are bang to rights on this and they are pretty thick skinned about it. It's just business to them, nothing personal.

[northernladuk]

I read this whole thread when I went for a gig recently and got in to a right fight with the agency as they wouldn't let me opt in and had many chats with their legal team, got advice from QDOS who said Opt out same with REC etc so I have to say I have changed my mind on all this. Where Opting in would make sense there is no official support to this stance and fighting it with the an agent that just won't accept it is pointless and could have resulted in me not getting the gig so I rolled over and signed. I thought all the comments were great when but when it came to the reality it was just useless.

My advice would be try to stay opt in, if the agency steadfastly refuse to do it then opt out and don't lose any sleep over it.

You can bold what you want but that isn't how the agencies see it and if you want to try convince and agency with 1100 contractors opted out then fill your boots.

Point out that this is illegal under the Agency Conduct Regulations section 32(13) and your solicitor says that you could bring a civil action against the agency to recover the actual losses suffered by your company which could be up to the full value of the lost contract.

Again, I believe cojaks investigations that I just posted prove this is not true.

[psychocandy]

Agree with NLUK. There seems to be a lot of confusion over this and the BIS aint been a great deal of help either. I think no-one knows whats legal and whats not because its never been tested.

I'd agree what someone else said, try it on and see what happens but like NLUK said it aint worth losing a decent gig over.

Although, didn't someone mention once that you could sign the opt out but then you can withdraw this at any time before contract start? So you could get a letter to arrive on agents mat on the day you start the contract?

That would be go down like a lead balloon of course but it would be good fun. After all, they're hardly likely to can the deal with the client at that point....

[Wanderer]

I would send that to the EASI team at BIS. While they can make opting out a condition of trade. you cannot demand that the worker opts out before being submitted; that is restraint of trade.

I think the Agency Conduct Regulations section 32(13) is pretty clear, To make it even more concise, just read the bits in bold:

Neither an agency nor an employment business may make the provision of work-finding services to a work-seeker which is a company conditional upon the work-seeker, and the person who is or would be supplied by the work-seeker to carry out the work, entering into and giving notice of an agreement as referred to in paragraph (9) {opting out}, to the agency or employment business.

I really don't see how the agency can demand an opt out at any stage of the relationship, including making it a condition of trade. However, the agencies and their professional bodies like the REC seem quite happy to misinterpret that and not have clear guidelines.

And while you should opt out before meeting the client, this removes your choice to opt back in should circumstances warrant it.

Agency Conduct Regulations section 32 again:

(10) The person who is or would be supplied to carry out the work by a work-seeker which is a company, may withdraw a notice which was given in accordance with paragraph (9) by giving notice to the employment business or agency in question of the withdrawal of the earlier notice of agreement, and, subject to paragraph (11), paragraphs (1)-(8) shall thereupon apply.

(11) Where a notice as referred to in paragraphs (9) or (10) is given to an employment business or agency whilst the person who is or would be supplied to carry out the work by a work-seeker which is a company is in fact carrying out the work in a position with a hirer, then the notice shall not take effect until that person stops working in that position.

My reading of that section is that you may withdraw your opt out at any time, however if you have started work then the opt out is only withdrawn once you "stop working in that position". If you have NOT started work then the opt out is withdrawn with immediate effect.

So if a contractor wants to play it rough with the agency, they can opt out, accept the contract and they are perfectly within their rights to withdraw the opt out the day before they start work.


The legislation is there in black and white for people to interpret. We can all agree and disagree as much as we like, our arguments are of course moot until it's tested in court. Did you mention that you may know a contractor who was bringing this to court? Any update?