Reply to: Substitution clause restricted when remaining opted-in

[Larsen Howie]

I just realised I was quoting the AWR above, when in fact what I'm talking about is the "Conduct of Employment Agencies and Employment Business Regulations 2003", apologies!

Not even sure if the AWR has an opt-out, and most certainly does not affect contractors (and our contract usually state that the AWR does not apply in any form) - nor do agencies ask you to opt-out of them in my experience. I just started going through them and after reading the definitions I realised I was going through the wrong legislation

No harm done!

[northernladuk]

[Spikeh]

I just realised I was quoting the AWR above, when in fact what I'm talking about is the "Conduct of Employment Agencies and Employment Business Regulations 2003", apologies!

Not even sure if the AWR has an opt-out, and most certainly does not affect contractors (and our contract usually state that the AWR does not apply in any form) - nor do agencies ask you to opt-out of them in my experience. I just started going through them and after reading the definitions I realised I was going through the wrong legislation

[Spikeh]

Possibly but in all the time I've been on here and the number of posts about it I've yet to see a single instance where the opt in/out status made one iota of difference so I'm much more relaxed on it nowadays.

Nothing wrong with sticking to your guns though.

I used to opt-out all the time, as I thought it didn't matter and I didn't need the protection, being self-employed and willing to take on the risk. I have, however, been ripped off by agencies on two separate occasions due to being opted-out; both agencies failed to pay me "because the client didn't pay" them (in one instance, the client DID pay them and I still didn't get my money even after chasing in court).

On both occasions, I worked remotely, delivered the work, then the client has changed management / ownership and timesheets weren't signed off. I had plenty of proof that the work was done (commits, emails, phone logs etc), but the agency still failed to pay.

Being opted-in covers you for this scenario, among many others. If there are regulations in place that I have an option of being caught under that protects me from this bureaucratic nonsense, why would I opt-out of them?

[Spikeh]

strictly speaking, it would be better if the limitation was removed entirely from the contract as that will ensure no ambiguity, but ultimately so long as you do actually opt out of the conduct regulations then I don’t believe this would fetter the right to substitute unduly (assuming the rest of the substitution clause is worded correctly!)

On the flip-side, if you were to opt in to the conduct regulations then you would run into the problem that your personal service would then become a requirement of the contract and you would likely struggle from an IR35 perspective as a result.

- Andy

There seems to be a general assumption that all contractors opt-out of the regulations. This may very well be the case for most, but my research and professional advice shows that remaining opted-in is a better option for most contracts. I don't have to opt-in or opt-out when I agree a contract directly with a client, and I don't work any differently when I contract or don't contract (I turn down contracts that smack of "temp employee" working conditions). Agencies prefer you to opt-out as it gives them a much heavier administrative burden, but they have very little to do with IR35, if anything at all. They're about fairness when working through an agency.

I'm not sure any of your statements are true. "The Conduct of Employment Agencies and Employment Business Regulations" is there to ensure fair treatment of people / companies that work through an agency - regardless of how they provide their services. If there's a clause in the Regulations that limits you to providing only a personal service, then I would very much like to see / read it - I've looked and found nothing. There are PLENTY of clauses in the Regulations that provide protection from unscrupulous agency practices, however. These protect the worker and ensure the agency doesn't rip you off based on small print.

It also makes no sense - why would my working arrangements change if I remained opted-in to the AGENCY regulations? It changes nothing about my relationship with the client. I am providing consultancy services to an end-client, I run a PSC regardless of opt-in / opt-out, and my services are highly specialised / the client has chosen me to provide those services based on a face to face meeting where I have discussed terms and convinced them I am more than capable of delivering. It is highly unlikely that I would need a substitute, and if I did, it would be very difficult for me to replace myself for this project (though not impossible, of course).

Substitution is not the be-all-and-end-all of a contract, though its very important - working practices, scope, risk and how the work is carried out on a day-to-day basis play a huge part in SDC. My clients are clients, and they're acutely aware of that - they are not my boss or manager, but they get a professional service delivered under the terms we agree.

If it was this black-and-white, all PSCs would be caught.

[northernladuk]

I have not opted out, nor do I intend to. Absolute madness to opt-out if you ask me.

Possibly but in all the time I've been on here and the number of posts about it I've yet to see a single instance where the opt in/out status made one iota of difference so I'm much more relaxed on it nowadays.

Nothing wrong with sticking to your guns though.

[Spikeh]

Opt out late so it is invalid. Then get the clause removed.

I have not opted out, nor do I intend to. Absolute madness to opt-out if you ask me.

[Spikeh]

You must have copped for a newbie or some career monkey. Normally when an agent realises you know what you are talking about the bulltulip stops and it's get pushed through with minimal input.

Absolutely not, believe me - I am as professional / pro-contracting as they come, but they almost always try *something* - maybe I'm just hyper-sensitive to it. I'm pretty anal about scope and SDC / MOO terms, maybe more so than most.

This time it has mostly been "it has to mirror the client contract", though the terms I'm asking to be modified are mostly service provider -> agency terms that wouldn't exist in the agency -> client contract. Tbh, they've not been as bad as some agency consultants can be as I've worked with them before (albeit years ago at a different agency) and today the calls have died completely - just an email saying they're sorting the paperwork and will go back to the client with any mods I request afterwards, which is good enough for me at this stage

[Larsen Howie]

Not come across this one before - an agency trying to restrict substitution IF you decide to remain opted-in?

"If the Regulations do not apply, the Service Provider may substitute the Consultant named in Schedule 1 provided that:

... standard sub clauses"

Obviously I'm pushing back on it, but has anyone seen this before, and is it a normal thing? Another tactic to get you to opt-out?

strictly speaking, it would be better if the limitation was removed entirely from the contract as that will ensure no ambiguity, but ultimately so long as you do actually opt out of the conduct regulations then I don’t believe this would fetter the right to substitute unduly (assuming the rest of the substitution clause is worded correctly!)

On the flip-side, if you were to opt in to the conduct regulations then you would run into the problem that your personal service would then become a requirement of the contract and you would likely struggle from an IR35 perspective as a result.

[Old Greg]

Not come across this one before - an agency trying to restrict substitution IF you decide to remain opted-in?

"If the Regulations do not apply, the Service Provider may substitute the Consultant named in Schedule 1 provided that:

... standard sub clauses"

Obviously I'm pushing back on it, but has anyone seen this before, and is it a normal thing? Another tactic to get you to opt-out?

Opt out late so it is invalid. Then get the clause removed.

[northernladuk]

I won't risk losing it, but I wouldn't be doing my due diligence if I let the agency get away with nonsense like this. The contract wording HAS to reflect the reality - they're currently calling me every 5 mins to spin me another yarn that I've heard 100 times before :|

You must have copped for a newbie or some career monkey. Normally when an agent realises you know what you are talking about the bulltulip stops and it's get pushed through with minimal input.

[Spikeh]

Yes, cart before the horse but so many people don't get their sub clauses checked and they end being fettered so useless from an IR35 perspective. Most are arguabley a sham whatever the wording so if push came to shove I wouldn't be risking losing a perfectly good gig over something that's likely not to happen/work.

I've never seen the sub clause affected by your opt in/out status before so no idea why they are trying this on.

Never seen it before myself either - I feel like they might be doing it to encourage newbies to opt-out. Less admin for the agency, init.

This is a perfect gig in terms of IR35 regardless of contract wording - some consultancy on site, moving to remote work after a few weeks, R&D work in a silo, presenting solution options to stakeholders as necessary, and we even discussed ending the contract early when the work runs out / me working for my other clients during the process (waiting for a few budgets to be signed off). Presented myself as a business / consultant during the interview / initial meeting (as I always do) and they still loved me, so I see no reason why I'd be caught.

FGS, I've never, ever called in a substitute in the 11+ years I've been contracting, as I've never needed to, but I need to know I can should I fall gravely ill, or my hands drop off etc. The same does not apply to sub-contracting though - I've done plenty of that, but many contracts state I cannot sub-contract under any circumstances - not a problem here, though, as I don't think I'll need any skills I don't currently have.

B2B is the way forward, at least you can speak straight to the client about it instead of going through Agency Consultant -> Their Legal Team -> Client's Legal Team -> Client's HR Team -> Client's Hiring Manager -> Line Manager / dude that interviewed you (if you're lucky). So much red tape, misunderstandings and bureaucratic nonsense.

I won't risk losing it, but I wouldn't be doing my due diligence if I let the agency get away with nonsense like this. The contract wording HAS to reflect the reality - they're currently calling me every 5 mins to spin me another yarn that I've heard 100 times before :|

[northernladuk]

Can't copy & paste from the PDF and didn't want to write them all out here, but yes, the sub-clauses are fine.

They don't apply with the current wording though, as I am opted-in (and intend to remain so), so whether they apply or not is irrelevant right now.

Yes, cart before the horse but so many people don't get their sub clauses checked and they end being fettered so useless from an IR35 perspective. Most are arguabley a sham whatever the wording so if push came to shove I wouldn't be risking losing a perfectly good gig over something that's likely not to happen/work.

I've never seen the sub clause affected by your opt in/out status before so no idea why they are trying this on.

[Spikeh]

I'm assuming you've had your sub clause reviewed and it's been done properly.

Can't copy & paste from the PDF and didn't want to write them all out here, but yes, the sub-clauses are fine.

The parent term doesn't apply with the current wording though, as I am opted-in (and intend to remain so), so whether the subs apply or not is irrelevant right now.

[northernladuk]

I'm assuming you've had your sub clause reviewed and it's been done properly.