Conduct of Employment Agencies

The Conduct of Employment Agencies and Employment Business Regulations were created in 2003 to protect vulnerable poorly paid agency workers from unscrupulous employment firms. It is broadly accepted that the regulations were not intended to legislate against highly skilled workers.

If you are a highly skilled worker you can opt for your assignment to be considered outside the Conduct Regulations (Opt-Out). In order to do this you must serve formal notice on the Recruitment Agency before you are introduced to a prospective client.

If you are in the process of searching for a contract and would like assistance or you have found a contract and need a contract structure call Commonwealth Contractors now on 0800 294 4388 or Submit your details and we will get right back to you. Our experienced Account Managers can help with CVs and interview tips etc if you are looking for a contract and can discuss Umbrella Companies and Limited Companies if you have just secured a contract.

Umbrella Company/Limited Company Opt Out

If you are an IT contractor you will normally either work via an Umbrella Company or run your own Contractor Limited Company. Where this occurs the Opt-Out must be served by both yourself (the worker) and the Umbrella Company/Limited Company.

At Commonwealth Contractors we follow the industry practice of automatically opting out of any agreement meaning the final decision lies with you (the contractor). If you do not opt out then by default you are covered by the Conduct Regulations.

Reasons for opting out of the Conduct Regulations

If you Opt-Out of the Conduct Regulations you will offer the Client/Agency an assurance that you will act in good faith
Sometimes an Agency will not consider your CV for a role unless you Opt-Out. An agency can not refuse to deal with you unless you opt out, but clients are allowed to make this restriction; often this occurs with clients in the Financial Services sector who require their contractors to agree to restrictions that limit the contractor's freedom to work for competitors
By opting out you may be able to take advantage of preferential rates or earlier payment dates that some agencies offer to contractors who opt out
If you wish to escape IR35, your position could be weakened by anything seeming to suggest a close-to-employment relationship with the client.

Should I Opt in?

No - simply because it is never necessary for anyone to opt in. If an assignment falls within the remit of the Conduct Regulations, you are automatically covered unless you opt out.

Reasons for not opting out of the Conduct Regulations

You will have a contract via a recruitment agency that is not covered by a professional code of conduct (i.e. not a member of ATSCo, REC or Intellect)
At intention to switch from ‘temp’ to ‘perm’ rapidly (if you want to do this, you should be up front with the agency)

Contracts where the Conduct Regulations do not apply

The Conduct Regulations only apply to the provision of manpower i.e. ‘bodyshop’ contracts. They do not apply if the worker does not act for and ‘under the control’ of the end user. In the case of contracts outside IR35 in some cases the applicability of the Conduct Regulations is a moot point, but no one (other than, potentially, Lawyers) benefits from legal uncertainty, so we recommend that opt out documentation is completed for the sake of clarity. In the case of Managed Projects, the conduct regulations clearly do not apply, but it is still often good housekeeping to have opt out documentation on file.

Commonwealth Contractors Content

The above is not represented as being legal advice nor is it a statement of the law in this area and should not be relied upon as such. Commonwealth Contractors cannot accept liability for any loss suffered by you or any third party that places any reliance on this overview paper. You must make your own decision about what is best for you. If you want professional advice about the Conduct Regulations, you should contact the Law Society www.lawsociety.org.uk/home.law which will be happy to suggest firms of Solicitors who will sell you detailed advice on this area of the law.

To discuss Contracting in the UK call Commonwealth Contractors now on 0800 294 4388 or submit your details and we will get right back to you

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