A true summary of Opt-In / Opt-Out

[ExpCont]

Dear All,

I have been reading through different threads regarding opting-in / opting out, I would like to make some comments. Some of these comments have already been made by others, and some do not agree with those of others.

Since Conduct Regulations 2003 was introduced, there is an Opt-Out form which agencies would prefer you signed. The main points of the regulations are:
1) You are opted-in unless you sign the form to opt-out. Your status remains for the entirety of the contract - this includes extensions i.e. if the contract finishes on Friday, and the extension starts the following Monday, your status cannot be changed.
2) It has nothing to do with IR35 (of course, if you live abroad then this is not a problem anyway).
3) The regulations prevent restrictive clauses being placed upon the contractor. Restrictive clauses include preventing the contractor from going direct or preventing the contractor from switching agency at the end of the contract (whilst still working for the same end client). If such clauses exist in the agency contract and the contractor is opted in, you can report the case to the DTI who will investigate the case and ask the agency to remove the clause. If the agency is to protect its business, it must have provisions in the contract with the end-client to cover this event. Of course, it is not just about the law here - it is important to consider what is fair. For example, if the client genuinely does not want to extend the contract with the agency due to reasons of cost, for example, and then approaches the contractor directly, the contractor could work directly with the end-client. Another example may be that the agency is continually paying late and you wish to move to another agency in order to receive a better service. The fact that an agency is taking a 40% margin is probably not reason enough - this may be something to talk to the agency directly about at the next extension.
4) The regulations restrict the agency's ability to withhold monies from the contractor. For example, if the agency is finding that they are having problems receiving monies from the end-client, that is no reason not to continue paying the contractor in accordance with the terms of the contract.
5) The Conduct Regulations are applicable if the agency is in the UK. It has nothing to do with the nationailty of the contractor.
6) Naturally, an agency cannot give preferential treatment to someone who opts-out. However, it is difficult to prove this and it is therefore something which we need to live with.
7) If the contractor is opted-in, the agency is obliged to collect references, etc - generally, they need to work a bit harder in establishing that you are capable of doing the job in question.

There are other points which I could make but these seem to be the ones which all of you have been discussing in other threads.

Best regards.

(Please note: all of the above is only my opinion, based on my reading of the regulations).

[VectraMan]

3) The regulations prevent restrictive clauses being placed upon the contractor

Yes, but if the same restrictive clause can be placed upon the client (i.e. not going direct or hiring a contractor through a different agency), there's absolutely no point to that regulation. Unless you can say that putting restrictions on the client is the same as putting restrictions on the contractor, and so illegal.

My agent didn't ask me about opting anything, didn't check any references, and I have the restrictive clause in my contract.

[ExpCont]

Apologies if my original post was not clear - the restrictive clause which can be placed upon the client, however, is not restrictive in that the client may not employ the services of the contractor directly. The restriction upon the client is one of the following:

1) When a direct relationship is to be created between the client and the contractor, the agent is entitled to one final extension to the contract (a so-called extended period of hire) e.g. 3 months. After this final extension the contractor may work directly for the client.
2) The client pays a one-off fee (a so-called transfer fee).

The regulation you need to look at is regulation 10 of the conduct regulations 2003. It mentions both of the above possibilities.

The problem for the agent here is that there is often no specific contract between the agent and the client, and if there is, then the client usually refuses to sign such a contract containing restrictive clauses as the 2 I have mentioned above. This is why it is important to be fair when considering going direct or switching agency.

If, in your case, you have a restrictive clause in your contract but have not signed an opt-out form, then you are opted-in and the restrictive clause in the contract is not valid.

Best regards.

(Please note: all of the above is only my opinion, based on my reading of the regulations).

[magister]

What if you opted out but there is no restrictive clause in the contract?

Apologies if my original post was not clear - the restrictive clause which can be placed upon the client, however, is not restrictive in that the client may not employ the services of the contractor directly. The restriction upon the client is one of the following:

1) When a direct relationship is to be created between the client and the contractor, the agent is entitled to one final extension to the contract (a so-called extended period of hire) e.g. 3 months. After this final extension the contractor may work directly for the client.
2) The client pays a one-off fee (a so-called transfer fee).

The regulation you need to look at is regulation 10 of the conduct regulations 2003. It mentions both of the above possibilities.

The problem for the agent here is that there is often no specific contract between the agent and the client, and if there is, then the client usually refuses to sign such a contract containing restrictive clauses as the 2 I have mentioned above. This is why it is important to be fair when considering going direct or switching agency.

If, in your case, you have a restrictive clause in your contract but have not signed an opt-out form, then you are opted-in and the restrictive clause in the contract is not valid.

Best regards.

(Please note: all of the above is only my opinion, based on my reading of the regulations).

[IT contract agent]

Dear All,

I have been reading through different threads regarding opting-in / opting out, I would like to make some comments. Some of these comments have already been made by others, and some do not agree with those of others.

Since Conduct Regulations 2003 was introduced, there is an Opt-Out form which agencies would prefer you signed. The main points of the regulations are:
1) You are opted-in unless you sign the form to opt-out. Your status remains for the entirety of the contract - this includes extensions i.e. if the contract finishes on Friday, and the extension starts the following Monday, your status cannot be changed.

Our admin team sort out opt outs but I think we have to get opt outs for extensions and not just one to cover any work do with that client

[Mordac]

Our admin team sort out opt outs but I think we have to get opt outs for extensions and not just one to cover any work do with that client

If you'd read the regulations (sorry, couldn't resist) you could have saved yourself the trouble. Once signed it covers all future engagements, as long as the introduction took place after the opt-out was signed. You don't need to keep getting new opt-outs for each extension. The opt-out (or opt in) reflects the relationship between the agency and the contractor, not the relationship between the contractor and the client. Once you have opted out, you stay opted out.