Employment Business Regulations 2003 Opt Out

[mobwell]

I contract through my single employee Ltd company and have been given a new contract by my agency. It asks me to sign a form saying I opt out of some aspects of the Employment Agencies and Employment Business Regulations 2003, specifically that Regulations 32(1) - (8) do not apply.
What is the reason for this and what are the pros and cons of this for me?

[Ardesco]

The reason for this is to stop the agent from having to verify your references and pay you on time (I.E. all benefits for the agent and none for you).

The agent will tell you it is an IR35 indicator and opting out puts you outside of IR35, in reality it won't mean any such thing.

I would suggest opting in, or agreeing to the opt out and then sending a letter to your pimp stating that you wish to opt in once you start the gig.

It s also worth bearing in mid that if you have already been introduced to the end client you can't opt out anyway as you are already opted in. Once opted in you are opted in for the length of the contract, you cannot opt out.

[The Lone Gunman]

Go read the regulations on the DTI web site. If you still don't understand then come back with specific questions.

[rootsnall]

I contract through my single employee Ltd company and have been given a new contract by my agency. It asks me to sign a form saying I opt out of some aspects of the Employment Agencies and Employment Business Regulations 2003, specifically that Regulations 32(1) - (8) do not apply.
What is the reason for this and what are the pros and cons of this for me?

Read the regulations and also the myriad of posts on this site about the issue.

The main pro of staying Opt In is that legally the agent can only put limited exclusion clauses ( read the regs ) in your contract and it would make it easier for you to go direct to the client at a future date. In practice it isn't that easy ( I tried it ! ) and would possibly mean the agent would push other contractors ahead of you for future work. For this reason I have opted out when working thru agencies I often deal with. If your current job is a one off via that agent and there is any scope for direct working in the future then it may be worth staying Opt In.

Some agents will tell you that staying Opt In is bad for IR35 but this doesn't seem to be the case.

[mobwell]

It s also worth bearing in mid that if you have already been introduced to the end client you can't opt out anyway as you are already opted in. Once opted in you are opted in for the length of the contract, you cannot opt out.

In my case I was introduced to the client by one agency. That contract is about to finish and the client wants me to use their preferred agency (lower rates) for my new contract with them. I didn't opt out in my first contract so does that mean I can't opt out in this second one either?

[Ardesco]

If you have been introduced to the client already you cannot opt out, you can only opt out before you have been introduced to the client.

I would think that already working with the client would classify as already being introduced to them before you had a contract set up with the agency, wouldn't you?

Not to mention why would you want to opt out, you don't gain anything and the most importnant thing you loose is legislation that tells the agency they have to pay you promptly.

[jh0711]

also opting in means the agency has to get rafts of paperwork from you before they can put you forward for a position - this may mean that those opted out will have more chance than those opted in (and yes it is not illegal (afaik) for them to do this)

thing is if the agency need you to fill the slot and have no other options they will take you whether you are opted in or out - whether they actually do what is neccesary paperwork wise if you do opt in is anyones guess.

also I have spoken to an agency and contractor about the restriction on going direct with the client and as someone else has said it is not that.

generally the agency said it would not be a problem as they have a seperate contract with the end client that stops them taking people on permanently or letting contractors go direct with the end client after only a few weeks.

Although if it ever got to court and EAA regulations went against agency end client contract I am not sure who would win.....

[Ardesco]

I would suggest opting in, or agreeing to the opt out and then sending a letter to your pimp stating that you wish to opt in once you start the gig.

HTH

As a side note none of my references have ever been contacted for information for any opted in contracts I have done so I would assume the agency doesn't bother 99% of the time.

[The Lone Gunman]

also opting in means the agency has to get rafts of paperwork from you before they can put you forward for a position

Common misunderstanding (I may have it wrong too).

AIUI. The agent has to be sure that you are who you say you are and that you have the qualifications for the post.
All you need to do is send a letter from a director of your limited company stating 'the company warrants that XXXX is an employee of the company and is qualified to carry out the works for this contract. Further the company warrants that all experience, qualifications and references for XXXX have been checked by the company and found to be correct'.

Mal, Den, am I correct? Anything to add?

[jh0711]

you may be correct re the letter from the director stating that you have all the neccesary skills etc

but this does really raise the question - who are the 2003 regs supposed to be aimed at?

originally (I think) they were to protect vulnerable workers from unscrupulous 'gang masters' but as usual all 'temporary' workers were included in the legislation.

if it is that easy for the agency and yourself to negate any need for proper checking of references and obtaining proof of qualifications and added on to the fact that the agency and end client will have in place a contract which effectively (in their eyes) overrides the clause regarding restrictive covenants then it does make a mokery of the whole regulation set.

my advice - you probably have very little to gain or lose from opting in or out of the regulations if you are a bonafide contractor - I would always err on the side of opting out simply because some agencies will need to do the whole paperchase thing which could have an impact on you getting the gig