Reply to: Pending contract offer but must opt out and accept withholding day rate

[Sympatico]

If you want terms and conditions, get them written in the contract not have a contract which you disagree with but you assume you can sue using legislation which is specifically targeted at employees.... I think you would have a pretty hard time in an IR35 case if you successfully did manage to sue an agency using this legislation

Of course you don't go into a contract looking to sue, that would be very stupid... but you may decide to sue for an existing case...

As Sue Ellen says about our argument regarding the Conduct Regulations implying employment

... Until there is a case in a higher court that is ruled on then none of what anyone thinks or says is legally binding. This doesn't matter whether you are a lay person, solicitor, QC or judge.

That also applies to HMRC.

Also if I had, as you suggest, successfully sued an agency, on the grounds that the Conduct Regs do cover proper business 2 business relationships, then how can that be an IR35 pointer.




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[BlasterBates]

You are quite right of course!

Then please take what I said as a possible defence against "the Conduct Regulations are an indicator of control" argument, which gets a lot of press.

If you want terms and conditions, get them written in the contract not have a contract which you disagree with but you assume you can sue using legislation which is specifically targeted at employees, with the term "employment" sprinkled liberally all over it.

I think you would have a pretty hard time in an IR35 case if you successfully did manage to sue an agency using this legislation.

[NigelJK]

As we're on yet another opt thread let's some terms straight.

There is NO 'opt in' - this is agency speak for 'we don't like the regulations'.
Unless the agency tell you implicitly that this contract is only 'opt out' BEFORE telling you who the client is and long before you are 'interviewed' can they make it stick. Any deviation from this and you are NOT opt'ed out. The issue is they have paid legal advisor's to scare you and the end client.

The regulations are there to help protect you, and yes they're not normally applied to our 'businesses'. However they are a gatehouse for the Agency to slip a few naughties into your contract with them. I honestly thought at the time of the regulations going live that the worst excesses of the agencies had been curbed, but alas they haven't been touched one iota as they have the magic 'opt out' wand.

The only clause which makes any sense for the agencies to fight that hard over is the 'hand cuff' clause. To them it's their bread and butter, to you it is a killer for the prospects of building a proper business relationship with the end client. Regulation guidelines for the clause is 8 weeks, but it should be no more than 12.

[SueEllen]

You are quite right of course!

Then please take what I said as a possible defence against "the Conduct Regulations are an indicator of control" argument, which gets a lot of press.

We've heard it all before.

Hence the advice is to ensure the rest of your contract is as water tight as possible so you don't have to worry.

[Sympatico]

You can argue as much as you like. Until there is a case in a higher court that is ruled on then none of what anyone thinks or says is legally binding. This doesn't matter whether you are a lay person, solicitor, QC or judge.

You are quite right of course!

Then please take what I said as a possible defence against "the Conduct Regulations are an indicator of control" argument, which gets a lot of press.

[SueEllen]

I've interviewed for a couple of contracts at Orange where they had a retainer of 10% that was dependant on you hitting an undefined "target" in the three months. So the day rate was (say) 350 and every three months if you hit your "target" you got a bonus of 2280 or thereabouts. I've not taken them up on either occasion.

Odd that...

[NickNick]

You're rightly stressed out. I've never heard of a retainer on an IT contract before. .

I've interviewed for a couple of contracts at Orange where they had a retainer of 10% that was dependant on you hitting an undefined "target" in the three months. So the day rate was (say) 350 and every three months if you hit your "target" you got a bonus of 2280 or thereabouts. I've not taken them up on either occasion.

[SueEllen]

I disagree with that advice, which is from undeclared author

I say you can be within the protection of the Conduct Regulations in a contract for services
i.e. not under the control of the client. (unofficial lay opinion)

You can argue as much as you like. Until there is a case in a higher court that is ruled on then none of what anyone thinks or says is legally binding. This doesn't matter whether you are a lay person, solicitor, QC or judge.

[Sympatico]

You can be in the Conduct Regulations and still not under control

Conduct of employment regulations: a guide to opting in or out

If you read the regulations they apply to the placement of temporary and permanent employees.Note the term employment

The regulations are designed to apply to workers who are controlled by the client...

I disagree with that advice, which is from undeclared author

I say you can be within the protection of the Conduct Regulations in a contract for services
i.e. not under the control of the client. (unofficial lay opinion)

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This is straight from the Conduct Regulations, you can check it yourself...
Regulation 32 (a) states any reference to a work-seeker, how so ever described, includes a work-seeker which is a company
Regulation 15 (a) requires an employment business to agree with the work-seeker whether the work-seeker .. will be... under a contract of service [controlled]...or a contract for services [not controlled].

This is the only part of the Conduct Regulations that directly states where a work-seeker might be under control of the hirer.
Regulation 2 Interpretation. In these Regulations, unless the context otherwise requires—...
“work-finding services” means services ... provided— ...
c) By an employment business to a person [work-seeker] ... to find [a client]... with a view to the ... person becoming employed by the employment business and acting for and under the control of the [client];

This reflects the relationship of a work-seeker that is a person under a contract of services

In the context of a work-seeker that is a company under a contract for services , then the context requires the interpretation to reflect that relationship
e.g. the following meaning can be implied

“work-finding services” means services ... provided— ...
c) By an employment business to a company [work-seeker] ... to find [a client] ... with a view to the company entering into a contract for services with the employment business and providing services for the [client];

[BlasterBates]

I presume you are referring to the judgement in Accenture Services Ltd v HM Revenue and Customs & Ors [2009] about the level of control, the meaning of employment business in the Employment Agencies Act 1973 and whether businesses are in the scope of the 1973 regulations.

It has been suggested that as the Conduct Regulations 2003 refer to the Employment Agencies Act 1973 for its definition of employment business, then the same argument can be used to suggest businesses are not in the scope of the Conduct Regulations.

I am not a lawyer, but I have three comments on that idea

1. The Accenture case makes no reference the Conduct Regulations
2. In making his judgement and referring to the Employment Act 1973, Mr Justice Sales stated It is not plausible to suppose that Parliament intended to bring businesses within the scope of such a regime on the basis of the extremely diluted test [of control]
3. In contrast if you read the Conduct Regulations and its amendments, it is entirely clear that Parliament intended that work-seekers that are businesses are included within the scope the regulations. e.g. Regulation 32 specifically details the Application of the Regulations to work-seekers which are incorporated.

Conduct of employment regulations: a guide to opting in or out

If you read the regulations they apply to the placement of temporary and permanent employees.Note the term employment

The regulations are designed to apply to workers who are controlled by the client, which means that not only do the vast majority of contractors simply not require the protection which the regulations bring, but also as skilled professionals in business in their own right are not controlled by their clients and so technically the regulations will not apply.

For a contractor it's a non-issue because he is not controlled by the client.

If you are controlled by the client, then you might want to think very hard about what that means for your IR35 status.

Imagine suing the client because you argue, you're covered. Then you'll be submitting a whole load of evidence to the agency about the fact that you are covered because you're controlled by the client. That documentation will be lodged with the agency and would be part of the info an HMRC inspector would use to determine your status. It might at least raise the eyebrows of a judge looking at your case.

The reality is faced with the an agency declaring you're not covered by the regulations, no contractor is going to counter that arguing that he was a "temporary employee", therefore it's a non-issue for anyone not inside IR35.

[Sympatico]

Opt in or opt out, doesn't matter, if you're a business you're not covered by the regulations regardless of what you say.

I presume you are referring to the judgement in Accenture Services Ltd v HM Revenue and Customs & Ors [2009] about the level of control, the meaning of employment business in the Employment Agencies Act 1973 and whether businesses are in the scope of the 1973 regulations.

It has been suggested that as the Conduct Regulations 2003 refer to the Employment Agencies Act 1973 for its definition of employment business, then the same argument can be used to suggest businesses are not in the scope of the Conduct Regulations.

I am not a lawyer, but I have three comments on that idea

1. The Accenture case makes no reference the Conduct Regulations
2. In making his judgement and referring to the Employment Act 1973, Mr Justice Sales stated It is not plausible to suppose that Parliament intended to bring businesses within the scope of such a regime on the basis of the extremely diluted test [of control]
3. In contrast if you read the Conduct Regulations and its amendments, it is entirely clear that Parliament intended that work-seekers that are businesses are included within the scope the regulations. e.g. Regulation 32 specifically details the Application of the Regulations to work-seekers which are incorporated.

[BlasterBates]

Opt in or opt out, doesn't matter, if you're a business you're not covered by the regulations regardless of what you say. To get your money in the event of a dispute you would have to prove that you're under the control of the client. That evidence will then be filed away with all your other records the agency are obliged to hold and presented to HMRC should there be an investigation. Letters explicitly imploring how you are controlled by the client in order to demonstrate you're covered by the employment agency conduct regulations might raise a judge's eyebrow.

My advice, get terms and conditions you want in the contract not rely on a piece of legislation that doesn't apply to anyone not under the control of the client.

[MrMarkyMark]

You have had one of the worst experiences I've seen for awhile to be honest. Normally they are OK'ish and get easier as you learn the game. You'll hear the can't progress if you don't opt out again sometime but it's not that common but hopefully this will be the one and only time this retainer rubbish will rear it's head. It will get easier.

+1, sounds like one of the worst experiences I've heard of.
Never heard of this sort of retainer, if I had I would have avoided it.

[LondonManc]

Fair enough. It's not my business to find out what the manager has signed up to.

I don't like the heavy handed approach the recruiter compliance team applied and the retainer clause. The recruiter who introduced me to the role seemed a bit panicky when I said this was proving to be a negative experience.

I should find out if I will get another extension with current gig. I'm annoyed I'm stressing out over an extra 1/2 hour pay for a role where the burden of dealing with the agency has been so painful.

No doubt I'm being the newbie and don't realise that the agency is always the biggest negative with contracts

You're rightly stressed out. I've never heard of a retainer on an IT contract before. Have you had the contract assessed by QDOS? Worth the money for you if you've got it on two grounds; it adds a delay that you might need to get the current extension over the line and will flag up the precise clauses (probably many of them!) that could cause issues. You've got to do what's best for business after all.

[SueEllen]

I would let the client manager know about the retainer specifically the last 2 parts of the clause.

Even if you don't take the contract, which I wouldn't on those terms, the client manager needs to know the agency is dodgy.