Rescind Opt out of Conduct of Employment Agencies and Employment Business Regulations

[lifexplorer]

Hi everyone,

I opted out of the Conduct of Employment Agencies and Employment Business Regulations 2003, which having read this forum after, I realise to have been a silly thing to do not having known any better. However I am wondering how feasible is it for me to "opt out" now?

Basically my agency contract says I can't contract to my end client for a year after termination of my contract (due to expire next week). However another agency has contacted me about a role at said end client which my current agency wouldn't have access to - as such I'd like to take on the role, but think I may be legally hamstrung here.

Is it feasible for me to just opt out now, this late into my contract (started in September 2012, ending in December 2012) and avoid the handcuff clause?

Cheers!

[cojak]

Not really, you're half-way through the contract! I think that 12 months is too long though, it's generally 6 months.

[eek]

Not really, you're half-way through the contract! I think that 12 months is too long though, it's generally 6 months.

There is a secondary possible get out. When did you opt out, before or after you first met the client?

[lifexplorer]

There is a secondary possible get out. When did you opt out, before or after you first met the client?

I had a phone interview with the end client if that counts? For what it's worth I worked previously for the end client as a permanent employee (till January 2012).

The handcuffs are pretty strict and broad, the relationship as currently stands is:

End client -> Client's Agency -> My Agency -> Me

Where I am looking to move to:

End Client -> Different End Client Agency -> Different Agency -> Me

But the handcuffs are for working for the client's agency, any subsidiaries of the client's agency, or any *clients* of the client's agency.

Actually thinking about it, seeing as how the client's agency is very big and does direct recruitment for most companies in the UK as well, whether that would mean I technically couldn't work for any client whatsoever dealt with by that agency (which would be... pretty much anyone in the UK I could think of working for).

[northernladuk]

You don't think it would be worth dropping the client and go find another? You aren't on the best ground re IR35 having been a permie before and being stuck in a chain with 2 agencies is far from ideal. Maybe time to make a clean break and start again with new clients and be a real contractor?

Question also is will the client go with a different agency? If not then your plan falls apart and that is an aspect you cannot influence.

[Wanderer]

As pointed out by eek, the opt out but it has to be done before you are "introduced or supplied" - agency conduct regulations section 32(9). Exactly what "introduced or supplied" means is open to interpretation unfortunately.

In addition to the opt out potentially not being valid , there are other possibilities:

The client could be willing to pay off the agency to release you from the restraint of trade
The restraint of trade could be held to be excessive and unlawful in court, therefore unenforceable
Your current agency may never know that you have gone back to work for the client

Pretty much all of these would require that the client takes your side against the agency. I've had clients who have done this, I don't know what they did but the agency wrote to me and told me they wouldn't seek to enforce a restraint of trade.

So, it's worth bringing it up with the client and see what they think, they may be able to help. Or they may tell you to bugger off and fight your own battles. But you won't know unless you ask.

You can withdraw the opt out after you start work (Agency Conduct regs section 32(10) allows this) but this will only take effect once the worker "stops working in that position".

Here's a question: If a worker was working in a particular position and opted out of the Agency Conduct regs, could they withdraw the opt out under s32(10) and once they finish working in that position, they are free to take a different position at the client on the basis that they are no longer opted out therefore the restraint of trade is no longer applicable.

I think you would need to get legal advice on that one - the agencies interpret the law pretty loosely and they wouldn't like it if you pulled that stunt on them. I'd be interested to see if it works, my reading of the legislations is that it might be a get out provided you are taking up a different position with the client....

[Ticktock]

As pointed out by eek, the opt out but it has to be done before you are "introduced or supplied" - agency conduct regulations section 32(9). Exactly what "introduced or supplied" means is open to interpretation unfortunately.

The restraint of trade could be held to be excessive and unlawful in court, therefore unenforceable

Having taken advice when I signed a contract which had a 12 month restrictive covenant (on a 12 month contract) I was told "Whether these terms are enforceable depends upon whether they are reasonably necessary to protect the other party from unfair competition with you. It seems to me that the xxxAgencyxxx 12 month term is probably unreasonably long." This was from a QC who specialises in contract and employment law.

Here's a question: If a worker was working in a particular position and opted out of the Agency Conduct regs, could they withdraw the opt out under s32(10) and once they finish working in that position, they are free to take a different position at the client on the basis that they are no longer opted out therefore the restraint of trade is no longer applicable.

Quite simply, no. You are signing a contract for the work you are taking - they are futuristic terms. The withdrawal must come before taking a role, so this can be before taking another role with the same agency, or you can refuse to opt out when taking a new role with another agency. The whole point of not being able to opt out whilst in the role is to stop you signing a contract and then saying "nah nah, doesn't apply to me because I changed my mind".

[northernladuk]

12 months is against your Human Rights to work or something I believe so cannot be enforced. 6 months could though.

[lifexplorer]

You don't think it would be worth dropping the client and go find another? You aren't on the best ground re IR35 having been a permie before and being stuck in a chain with 2 agencies is far from ideal. Maybe time to make a clean break and start again with new clients and be a real contractor?

Question also is will the client go with a different agency? If not then your plan falls apart and that is an aspect you cannot influence.

I feel comfortable as far as IR35 goes - I went to a totally different company in a totally different industry for 9 months, went to this client for a discrete piece of work that has been done (ahead of schedule) in another part of the country for 3 months. My locations have been spread all over the country and have been pretty well completely autonomous in my contract work - in a way that wasn't at all the case as a perm employee.

In any event, I'd put my odds at continuing with this client vs. another at about 50-50 at this point..maybe less.

[SueEllen]

12 months is against your Human Rights to work or something I believe so cannot be enforced. 6 months could though.

As lifexplorer signed the clause as a company rather than an individual there will be no Human Rights issues that come into it.

However depending on the clause's exact wording if lifexplorer takes legal advice they may be told they can ignore the clause completely because it's not protecting a legitimate interest due to it's length of time it's enforced for and the wording. (I have been told similar to Ticktock in the past again by a QC and also later by a solicitor.)

Though I agree with you lifexplorer should try and find different clients for a few years. If HMRC come knocking and start an IR35 investigation the fact s/he was a former employee of the client looks suspect and clients can't be trusted to say the right thing.