Reply to: Didn't sign "Opt Out" and now agency is refusing to pay me.

[Wanderer]

But if you think about it, those contractors are probably totally wrong.

It's quite possible that they all are, but let's look at this in detail:

The handcuff limitation won't work if there is a higher contract betrween agency and client with the same conditions, which there almost certianly will be.

So this is the clause that only allows restrictive covenants of 14 weeks from the start or 8 weeks from the end of the contract (whichever is longer). My reading of the regulations is that they bind the agency in their dealings with both the worker and the client so if the contractor declines to opt out then the agency cannot enforce this restriction against the client. If it were otherwise then the law would be worthless. We all agree that the regulations are poorly drafted in places, but my feeling is that if a client ever tested this in court then they would win their case as this was the intention of the regulation.

The law also restricts the temp to perm fees (I know - we would never go over to the dark side like this, but some people do) payable by the client. To me that is further evidence that the regulations are in place to regulate the agency's dealings with the client and the worker.

If I were hiring a worker though an agency then I would make damned sure that they didn't sign the opt out as there is a very good business case for a client to have their workers NOT opt out.

If the agency can't pay you then they can't pay you, whether or not they've been paid and you have recourse to the late payment provisions.

The regulations prevent the agency from tying the payment by the client to the payment of the worker. Agencies will typically have a line of credit that they can draw on or they will find a way to factor payments to pay their creditors. If the agency is insolvent then I agree that the regulations won't change this but it does stop the agencies putting this abusive term in their contracts. Quite fundamentally, agencies are there to factor the payments. The regulations prohibit the scenario where an otherwise solvent agency hasn't been paid and they refuse to draw on their line of credit to pay the worker.

One you missed is that the agency cannot refuse to pay you just because you can't provide signed timesheets. Of course that doesn't prevent the agency from delaying payment while they make reasonable enquiries to determine that the work has been done but it's something that a contractor can use to press them for payment in difficult circumstances. Without this provision it's simply "no timesheet, no pay" and as we all know there a myriad of reasons why a contractor may not be able to produce a timesheet in the contractually required format.

Then again if you're daft enough to sign a contract that says your payment for work done is totally dependent on a third party who is not part of that contract - which is what you are actually saying - then you're in the wrong job anyway.

Yes, indeed. Why would someone accept a contract with patently unfair terms? But let's stop for a minute and ponder why the government felt the need to pass legislation to regulate the agencies.

Maybe it's because not everyone is in such a strong negotiating position against the agencies as we are? Perhaps agencies abuse their position by lying to clients that their first choice of worker was "unavailable" and they would have to accept their second choice when the fact is that the first choice candidate wouldn't accept the agency's draconian contract terms? I'm sure there are plenty of other stupid agency tricks that they try on.

In any case, I find it easier to just tell the agency "I'm not opting out" as my negotiating trump card rather than to go through a load of wailing and gnashing of teeth about individual contract terms weighted so heavily in the agency's favour.

Since those are about the only two "benefits" accruing from being opted in, there's really not a lot to them, is there?

Maybe you are right, but as Contreras asks - "why are the agencies so desperate for us to sign the opt out?" That's what woke me up to the detail of the regulations - they were just way too eager for me to sign my rights away.

The fact is that the only party to benefit from the opt out provision is the employment agency or employment business.

[Boo]

But if you think about it, those contractors are probably totally wrong.

The handcuff limitation won't work if there is a higher contract betrween agency and client with the same conditions, which there almost certianly will be. If the agency can't pay you then they can't pay you, whether or not they've been paid and you have recourse to the late payment provisions. Then again if you're daft enough to sign a contract that says your payment for work done is totally dependent on a third party who is not part of that contract - which is what you are actually saying - then you're in the wrong job anyway.

Since those are about the only two "benefits" accruing from being opted in, there's really not a lot to them, is there?

That really is a pile of self-serving old carp. But we have come to expect that from the PCG and its apologists, eh ?

The advantages of being opted in are that a contractor can go direct with the client after a certain time and that the agency must pay the contractor regardless of whether they get paid or not.

The first of these rights overrides both the upper and lower contracts so Mal-vulva-oh!'s point is invalid. The second right means that the multi-million turnover agency will have to stump up if the client goes t.u. or otherwise fails to pay. This will be rather more useful to the average contractor than the Pathetic Contractor's Group paltry agency insurance.

So wrong on both counts (again).

Boo

[Contreras]

But what the PCG don't seem able to accept is that a large percentage of these 'freelance contractors' think there are sound commercial reasons for NOT opting out of the protections provided by the regulations.

But if you think about it, those contractors are probably totally wrong

Well either that, or you could be wrong. Or maybe neither is wrong but your personal reasoning differs from the majority.

Fwiw, I have thought about it, and concluded:

a) it's already the default "do nothing" position.
b) whilst it may have no impact on the legal position, that is irrelevant because:
c) the agency wouldn't be so keen on having an opt out unless there was some perceived benefit to them.

I also have a lot of respect for Roger Sinclair, and he says:

Overall, I find it difficult to see that there is any sound commercial reason why a contractor providing services through an agency would wish to opt out of the new regulations.

Opt-in, opt-out?Legal specialist Egos comments

[malvolio]

But what the PCG don't seem able to accept is that a large percentage of these 'freelance contractors' think there are sound commercial reasons for NOT opting out of the protections provided by the regulations.

But if you think about it, those contractors are probably totally wrong.

The handcuff limitation won't work if there is a higher contract betrween agency and client with the same conditions, which there almost certianly will be. If the agency can't pay you then they can't pay you, whether or not they've been paid and you have recourse to the late payment provisions. Then again if you're daft enough to sign a contract that says your payment for work done is totally dependent on a third party who is not part of that contract - which is what you are actually saying - then you're in the wrong job anyway.

Since those are about the only two "benefits" accruing from being opted in, there's really not a lot to them, is there?

[Wanderer]

The real problem is the drafting, which failed totally to differentiate between agency temp and freelance contractor, a point that was repeatedly made, by PCG and others, in the consultation phase.

But what the PCG don't seem able to accept is that a large percentage of these 'freelance contractors' think there are sound commercial reasons for NOT opting out of the protections provided by the regulations.

[SueEllen]

Incompetence or deliberate?

Deliberate.

[tractor]

..

Here's another potentially slimy one to be aware of. Today, I had a call back from Randstad regarding a JS role. We discussed it and agreed that I would be a good fit so agreed to proceed. I received the email asking me to authorise them to represent me for this role which I did, adding the caveat provided you confirm submission to the client within 48 hours - as an aside, they accepted this without question.

However, as a condition, I was required to fill in their web form that asked general stuff about Ltd/Umbrella, CCJ's, Unspent convictions etc with a tiny section that contained two mutually exclusive radio buttons for Opt in/Opt out. Neither worked. What's more worrying, the form wasn't rejected either. Just accepted with a confirmation email of my submission which did not mention opt out at all.

Incompetence or deliberate?

[cojak]

Actually scrap that, their answer is wrong, the opt out Reg 32(9) only applies a work-seeker which is a company. Temps cant't opt out.

Ping me over who you wrote to there and I'll fire them a snottygram.

I just sent them the question via the BIS website.

I think I'll sit down and ask the question again in a more exacting manner...

[cojak]

Ah CJ, you need to be careful what you ask them though. If your question was asking if it was illegal to insist that they will only seek work for work-seekers who will agree to opt out of the Conduct Regulations, then technically their answer 'could' be correct.

However, if you had asked them if it was illegal to insist that they will only seek work for work-seekers, where the work-seeker is a company, who will agree to opt out of the Conduct Regulations then their answer is wrong.

What a bunch of tulipes, I wondered why that last paragraph sounded tip-toeingly pedantic...

[Incognito]

Actually scrap that, their answer is wrong, the opt out Reg 32(9) only applies a work-seeker which is a company. Temps cant't opt out.

Ping me over who you wrote to there and I'll fire them a snottygram.

[Incognito]

Regarding the legality of forcing contractors to Opt-Out, here is my original post.

http://forums.contractoruk.com/accou...ntractors.html

I have the real name of the Head of Employment Agency Standards who sent me this reply and as you can imagine I wasn't that impressed with the reply.

But I do have it in black and white. Quite different information from that given to SueEllen...

(I would still follow the advice of SueEllen as I think that their reply to me is kak.)

Ah CJ, you need to be careful what you ask them though. If your question was asking if it was illegal to insist that they will only seek work for work-seekers who will agree to opt out of the Conduct Regulations, then technically their answer 'could' be correct.

However, if you had asked them if it was illegal to insist that they will only seek work for work-seekers, where the work-seeker is a company, who will agree to opt out of the Conduct Regulations then their answer is wrong.

As per the regs:

“work-seeker” means a person to whom an agency or employment business provides or holds itself out as being capable of providing work-finding services.

Regulation 32 is the reg that concerns us as contractors, that amends the definition of a work-seeker as follows:

Application of the Regulations to work-seekers which are incorporated

32.—(1)Subject to paragraph (9), in these Regulations—

(a)any reference to a work-seeker, howsoever described, includes a work-seeker which is a company; and
(b)the regulations mentioned below shall be modified as set out below in a case where the work-seeker is a company.

Reg. 32(13) only applies where the work-seeker is a company.

[cojak]

Regarding the legality of forcing contractors to Opt-Out, here is my original post.

http://forums.contractoruk.com/accou...ntractors.html

I have the real name of the Head of Employment Agency Standards who sent me this reply and as you can imagine I wasn't that impressed with the reply.

But I do have it in black and white. Quite different information from that given to SueEllen...

(I would still follow the advice of SueEllen as I think that their reply to me is kak.)

[minstrel]

Not sure why I would deserve this? Please explain.

Anyway...

I got the expected response from the Agency stating that if I don't sign the "Opt Out" immediately, I will be working within IR35 and they won't support me if I'm investigated. I didn't even mention that I was working inside or outside IR35 to them so seems to be standard resonse. Was also told that it invalidates my contract as it's an "Opt Out contract" ??? This is new to me !!! I asked for all of this in writing and hey presto, they suddenly decided to pay me.

If they paid late even by a day, I'd suggest you invoke the late payment legislation on them and charge them the £100 or so you're entitled to. Shows you will not be dicked around by them in future.

If you want to be generous you could suspend demanding payment conditional on prompt payment in future.

[Incognito]

.
The real problem is the drafting, which failed totally to differentiate between agency temp and freelance contractor, a point that was repeatedly made, by PCG and others, in the consultation phase.

Playing devil's advocate with you here Mal, but how would you define a 'freelance contractor', as a legal definition.

When you do that, how would you prevent the unscrupulous agency from disguising their agency temps up as freelance contractors?

BN66 is an example of where 'wooly' interpretations of definitions of classes of people are manipulated. The regulations aren't really for our benefit, they're there to protect temps.

[malvolio]

...I can see where the PCG were coming from with the concern that the regulations could apply to freelancers subcontracting out work but the agency regulations only apply to employment agencies and employment businesses and these terms are defined in law in such a way that they don't include freelancers subcontracting out work....

Unless there is an agency between the prime contractor and the client... That rarely applies for the average IT contractor, but there are plenty of one man bands subbing work to complete a traditional, agency-mangled contract.

The opt out has its place, and if people bother to apply it properly it's not an problem unless you think being opted in (which 90% of people are, intentionally or not) offers a benefit, which they don't; any of the supposed benefits are negated by other conditions.

The real problem is the drafting, which failed totally to differentiate between agency temp and freelance contractor, a point that was repeatedly made, by PCG and others, in the consultation phase.