Contract Restriction!

[malvolio]

That's like telling someone who is complaining about the government to run for prime minister.

I have no political influence within the PCG other than being a member so it would take a considerable amount of effort to change anything there. I have seen other people more powerful than me try to get them to do something with regards to the abuse of the opt out and nothing appears to have happened.

My chosen strategy at this stage is to fight back against agencies where I can and help raise awareness of the problem and advise people in places like this forum which is far more productive than trying to influence the PCG who are very set in their ways. If we can get enough people to protest to the BIS/REC/PCG then perhaps something will happen. I don't hold my breath but neither will I just sit by and watch as agencies bully contractors who do not choose to opt out.

Well that's three of my standard excuses covered then...

It's funny that the only posts I've seen on the PCG fora bitching about abuse of the Opt Out on the PCG for a have been mine. You'll forgive me if I point out that you don't have to join the CC to get stuff done (although it helps), it starts with actually saying something to them and getting the ball rolling: I kicked off the whole security clearance catch-22 problem when I was a humble member, for example, as did the guy who got us up to speed on Visa abuses - he is directly responsible for HMG changing the law.

There is sod all point in moaning on here and hoping someone picks it up and runs with it on your behalf. Stand up and participate.

OK, diatribe over, lets' get back to the OP's problems...

[Bones]

As Wanderer has pointed out, the opt out is no longer an option since I have started the contract. I will be signing the contract on Monday. The agent is Resource Direct Recruitment (RDR) for those who want to know. Although they will be treating me as though I am opted out!

However it does throw up a few general issues regarding reviews of contract. If you get a professional IR35 review which is 'negative' but the agent refuses to change anything where does that leave you?
Assuming you cant keep walking away from work you have to start with a contract you know is not IR35 friendly. In terms of due diligence arent you in a worse position than not having the review if HMRC were to investigate you?
I accept its the lesser of two evils at best!

I have been researching the opt out issue online and found the general consensus of advice is that not opting out suggests you are under control of the client which is contrary to working outside IR35. I know the opinion on this site is that it makes no difference but I dont know why?

I also came across the following paragraph in the PCG guidelines on the issue,

If I don’t opt-out of the Agency Regulations, will I be classed as an employee of the client or otherwise harm my IR35 status?

No, although remaining within the Agency Regulations will make it illegal for the agent to allow certain contract clauses that are helpful with your IR35 claim. In particular, they prevent you from being held responsible for your own mistakes (and fixing them at no cost) and therefore exclude you from benefiting from this particularly helpful clause in relation to IR35.

This suggests that if you dont opt out the agent cannot legally give you a 'completely' IR35 friendly contract!

The deeper I go the more messy this is getting!!

[malvolio]

...snip...

This suggests that if you dont opt out the agent cannot legally give you a 'completely' IR35 friendly contract!

No, it doesn't. It means one of the ancillary indicators to you not being treated as an employee may be removed. It does nothing to affect D&C, RoS and MOO which are the bits that actually metter.

The deeper I go the more messy this is getting!!

It's been messy for nearly 15 years. Live with it.

And on your first point, if the choice is having losing taxation on your earnings and not having any earnings to lose taxation on, I know which way I'd go...

[Wanderer]

This suggests that if you dont opt out the agent cannot legally give you a 'completely' IR35 friendly contract!

Having read the Agency Conduct Regulations (sad, I know) I don't recall any such restriction on but I'm happy for anyone to point it out it if is there.

And let's get something else straight - agencies don't give a flying tulip about what they can "legally" put in contracts. I've seen all sorts of unenforceable and down right illegal stuff thrown into contracts. I don't see why they would bother about a minor clause about fixing your mistakes on your own time because it's (allegedly) not permitted by the Agency Conduct Regulations.

It's also the working practices that matter. Tell me, have you ever worked late to fix a mistake you have made at work and not charged for it? If you have then you've ticked that box in the IR35 status investigation. It's a minor pointer in any case.

And on your first point, if the choice is having losing taxation on your earnings and not having any earnings to lose taxation on, I know which way I'd go...

Fair point, but working on a genuinely IR35 caught contract is near enough to going permie (without the benefits) and for that reason, yes I would seriously consider walking away. Working under D&C of the client is simply not my style of contracting.

That's not the situation here though - what we have is an agency deliberately sabotaging the IR35 status of a contract for no other reason than to bully the contractor into signing away their statutory rights and that's a pretty nasty trick.

Good luck with the fight, Bones. You are a tough cookie.

[Bones]

The quote is from the second paragraph on page 10 of 14 of the 2013 agency conduct regulations, version 2 I think, from the PCG.

The agent has asked to meet me early next week, which I am happy to do. I would have liked to get some feed back from REC before then as to whether they offer any IR35 complaint contracts that dont require opt out . There is a general inquiry email address on their web page I could try, I can only see if I can get a coherent reply or just slaver!

[malvolio]

The quote is from the second paragraph on page 10 of 14 of the 2013 agency conduct regulations, version 2 I think, from the PCG.

But taken out of context. That whole section is saying that reducing the agency's liabilities by opting out gives you a negotiating lever for getting a better, more IR35-friendsly contract since some restrictions on what the agency can offer are not applicable. It says nothing about any interdependency between opting out (or not) and being liable for IR35; that remains down to the real conditions under which you are working.

The agent has asked to meet me early next week, which I am happy to do. I would have liked to get some feed back from REC before then as to whether they offer any IR35 complaint contracts that dont require opt out . There is a general inquiry email address on their web page I could try, I can only see if I can get a coherent reply or just slaver!

Know your enemy, said Sun Tzu...

REC don't offer contracts, they are an agency support group (in the same way that PCG are a freelancer's one). You should remember that they therefore support agencies, and agencies have a commercial interest in you being opted out. It's nothing to do with working practices or D&C or anything else; all the agent worries about is his margin and therefore his commission. You opt in and his margin is reduced and his take-home goes down; agents are paid on meeting targets, a key one being his overall margin on his stable of engaged contractors.

And since you're clearly a PCG member, why aren't you asking them for advice via the legal helpline; that's what it's there for...

[Bones]

But taken out of context. That whole section is saying that reducing the agency's liabilities by opting out gives you a negotiating lever for getting a better, more IR35-friendsly contract since some restrictions on what the agency can offer are not applicable. It says nothing about any interdependency between opting out (or not) and being liable for IR35; that remains down to the real conditions under which you are working.

Not sure why you say its out of context, this section is in the form of separate questions followed by answers under the heading of Further Consideration. I disagree its a positive lever, the agents expect you to opt out as minimum because all contractors opt out its the right thing to do...according to them!

Know your enemy, said Sun Tzu...

REC don't offer contracts, they are an agency support group (in the same way that PCG are a freelancer's one). You should remember that they therefore support agencies, and agencies have a commercial interest in you being opted out. It's nothing to do with working practices or D&C or anything else; all the agent worries about is his margin and therefore his commission. You opt in and his margin is reduced and his take-home goes down; agents are paid on meeting targets, a key one being his overall margin on his stable of engaged contractors.

And since you're clearly a PCG member, why aren't you asking them for advice via the legal helpline; that's what it's there for...

REC offer 'std' contracts to its agency members to force on contractors. I am well aware that REC totally supports agents and has no concern for contractors best interests. However I dont agree that opting in or out has any real effect on margin. It is about stripping contractors of their rights and allowing them to impose unreasonable working restrictions.
The purpose of contacting REC was simply to get their point of view, however I will probably be lucky if I get a reply! As a contractor I am just a cash cow to their members.

Actually I am not a member of PCG, I am not sure what legal opinion they could give me that an agent would give two hoots about. The attitude I have had so far is that, 'this is our std contract we are not changing anything in it. Our contracts are supplied by REC therefore they must be right'.

I will report back if I get any reply to my question.

[SueEllen]

I've contracted through a few agencies who are members of REC and all their contracts are completely different.

Even ignoring the client specific terms* the contract wording is not the same. Some of them but clauses in which are nonsense and legally unenforceble to cover a generic area for example to describe you as a contractor while others have a very well defined clause.

Opting in or out only effects margin when the client doesn't pay and the agent pays you after they get paid.

Certain sectors are more likely to pay up even if it's months later than others for example the government tends to pay up but estate agents can be poor payers if they can be forced to pay at all. This is one reason that if you are doing work for certain sectors and are paid within week of invoicing not to stress about the opt-out.

*There are ways and means of finding out client specific terms but lots of clients don't or can't show these terms until you are on site.

[Wanderer]

The purpose of contacting REC was simply to get their point of view, however I will probably be lucky if I get a reply! As a contractor I am just a cash cow to their members.

Be sure to raise a formal complaint otherwise they can just fob you off. A formal complaint has to follow their procedures.....

Also complain to the BERR - info is in this opt out post.

[malvolio]

Actually I am not a member of PCG,

So why are you posting a copyrighted members' only resource on a public forum then?

I am not sure what legal opinion they could give me that an agent would give two hoots about. The attitude I have had so far is that, 'this is our std contract we are not changing anything in it. Our contracts are supplied by REC therefore they must be right'.

They would ask REC on your behalf and would get you an answer; it was PCG that got Hays's HIT20 changed remember. Actually they already have anyway; REC contracts are not compulsory, they are neutral wrt the opt out and most of the bits we don't like are added by the agency to reflect the nonsense they've agreed to with their client. You can always offer the standard PCG contract as an alternative of course...

I will report back if I get any reply to my question.

That would be good.