Agency law officials stuck on contractors

It may have won royal support, but exactly how a directive to protect temporary staff will take effect without threatening self-employed contractors is baffling policymakers.

Although yesterday's Queen's speech confirmed that the law will not come in until late 2011, all efforts so far to remove the self-employed from its scope have floundered.

The government last month said limited companies and the self-employed would suffer if the EU-inspired directive, which promises equal treatment at work, applied to them.

As a result, it proposed to insulate the genuinely self-employed, limited company contractors and workers on managed service contracts from the legislation.

But last week, one MP backing the law "wasn't particularly encouraging" when asked what officials have come up with to ensure it excludes the self-employed.

Labour MP Andrew Miller's response to Brookson hinted policy officials 'don't have an answer' to the issue, the firm's founder Martin Hesketh said in an interview .

And at a recent meeting with IT contractor recruiters, definitions drawn up by officials to exclude limited company contractors from the law were "very unclear."

The directive's definition of personal service companies was, likewise, ambiguous, added the Association of Professional Staffing Companies, which hosted the meeting.

The Agency Workers' Directive policy unit, although willing, was also unable to answer questions about excluding the self-employed, said APSCo director Marilyn Davidson.

"That [the exclusion for self-employed contractors] is an area that is very foggy and we need to clarify," she told CUK. "We will seek clarification through the final draft."

Friday 20th November 2009