Opt out of Conduct of employment agencies 2003 act?

[psychocandy]

Having read the leaflet I'm assuming this is a good idea because it seems not to do would harm you;re case with regards to IR35?

[TykeMerc]

Having read the leaflet I'm assuming this is a good idea because it seems not to do would harm your case with regards to IR35?

As to IR35, Opting Out has no bearing on IR35. Agents always tout the line that it does, but it's utter tripe.

There are 3 prime indicators for IR35 (not that HMRC have won many IR35 cases)

Mutuality of Obligation
Direction and Control
Right of Substitution

[psychocandy]

As to IR35, Opting Out has no bearing on IR35. Agents always tout the line that it does, but it's utter tripe.

There are 3 prime indicators for IR35 (not that HMRC have won many IR35 cases)

Mutuality of Obligation
Direction and Control
Right of Substitution

Yeh. I heard that. Got a leaflet from REC (Recruitment and Employment Confederation) that says it does harm IR35.

So what are the advantages to not opting out? What do most people do?

[TykeMerc]

Yeh. I heard that. Got a leaflet from REC (Recruitment and Employment Confederation) that says it does harm IR35.

So what are the advantages to not opting out? What do most people do?

You're aware that REC is an agents trade body aren't you? Do you honestly believe what agents say?
Agents desperately want you to Opt Out and will resort to all sorts of devious and underhanded nonsense including outright lies to achieve it, however 95% of the time they don't do it correctly so it's rarely valid anyway.
Do a search on Opt Out and you will find loads of info. Highlights (if memory serves) being:-

1. If you've got a signed timesheet the agent can't refuse to pay you, same is true if the client goes bust.
2. Contract clauses that prevent you returning to a client of theirs direct or via another agent for a period greater than 8 weeks aren't allowed.

Opting Out is unwise.

[Wanderer]

Opting Out is unwise.

Agree 100% with TykeMerc. We are talking about "The Conduct of Employment Agencies and Employment Businesses Regulations 2003". Not opting out:

1. Is not an IR35 pointer
2. Means the agency have to pay you even if the client won't sign timesheets for some reason or if the client won't pay the agency.
3. Limits the restrictive covenants in your contract to 14 weeks from the start or 8 weeks from the end.
4. Section 32(13) of the regulations states that agencies cannot refuse to work with you because you won't opt out. The PCG say this.

PCG would like to emphasise that it is a contravention of the Act for any agency to require you to opt out of the Agency Regulations.

It may also be illegal for them to pressure you to do so by threatening not to put forward your CV. Should any members find themselves being required to opt out of the Agency Regulations, they should inform PCG via the link on this page.

The REC also agrees saying that agencies must not make their services conditional upon you opting out.

There is a piece about it here Opt-in, opt-out?Legal specialist Egos comments :: Contractor UK.

There is a 50 page PDF from the DTI offering detailed analysis of the regulations.
The PCG have some advice regarding opting out (members only). I disagree with their advice, but if you are looking for an opinion biased towards opting out then you may find it helpful.

These pieces are are an interpretation of the law, if you want you can also read the relevant part of the original legislation and amendments to the legislation. Be warned that it may be an insomnia cure.

It's been discussed a number of times on the forum but it's not an easy one to search for because the forum software thinks the search terms are too short. but try to Google for:

site:contractoruk.com opt out

There is some debate about when the opt out needs to be done. What the legislation says is that the opt out must be done "before the introduction or supply" of the worker. Lots of people say that they take this to mean that opt out is not valid unless it's done before the introduction but it could also be argued that the opt out is valid if it's done after the introduction but before the supply (eg, before you start working). It's a grey area and as far as I know it's never been tested in court. Certainly, signing the opt out may be construed as evidence that you wanted to opt out and it could be used against you if you tried to argue that it was done in an invalid manner.

There are lots of sad stories from contractors who could have avoided a lot of grief if they didn't opt out. My advice is don't opt out unless you really know what you are doing. Agencies will try to tell you that everyone opts out but a very scientific poll on this forum shows that this is not true.

If an agency insists that you must opt out or tells you that they only take "opted out" contractors then they are acting illegally. Do your fellow contractors a favour and report the agency to the following organisations:

1. Employment Agency Standards Inspectorate [email protected]
2. REC (if the agency is a member)
3. PCG [email protected] (if you aren't a PCG member, consider joining too)

If you are wondering what fellow contractors do, then there is a opt in / opt out poll where you can vote for your favoured option.

[realityhack]

Brilliant summary - well worth a sticky until incorporated into FAQs.

[mudskipper]

Opting out:

1. Is not an IR35 pointer
2. Means the agency have to pay you even if the client won't sign timesheets for some reason
3. Limits the restrictive covenants in your contract to 14 weeks from the start or 8 weeks from the end.
4. Agencies cannot refuse to work with you because you won't opt out

Not opting out shirley?

[psychocandy]

Thanks for all the advice everyone.

Yeh. Agency is certainly trying to take advantage of my lack of knowledge on this one. OK, so no opt out for me.

I thought the REC might be an agency body. Their leaflet blatantly says that IR35 will be affected if you dont opt out.

[TykeMerc]

Thanks for all the advice everyone.

1. Yeh. Agency is certainly trying to take advantage of my lack of knowledge on this one. OK, so no opt out for me.

2. I thought the REC might be an agency body. Their leaflet blatantly says that IR35 will be affected if you dont opt out.

1. Business as usual for the vast majority of agencies, they love inexperienced contractors who believe what they say. It's not hard to draw parallels between a lot of agency staff and failed double glazing salesmen.

2. That's what's commonly known to contractors as bullsh1t and could even be described as deception.

[psychocandy]

1. Business as usual for the vast majority of agencies, they love inexperienced contractors who believe what they say. It's not hard to draw parallels between a lot of agency staff and failed double glazing salesmen.

2. That's what's commonly known to contractors as bullsh1t and could even be described as deception.

Yeh. Thanks.

As I think I said in another post, I'm returning to contracting after being permie for 10 years and I've forgotten some of the tricks the agencies pull....