Contractors' Questions: Will the agency worker rules apply to me?
Contractor’s Question: Is it likely that I, a limited company contractor, will be inside the Agency Worker Regulations, and will therefore be due certain entitlements from October, when they take effect?
Expert’s Answer: The regulations state:
3.(2) But an individual is not an agency worker if—
(a) the contract the individual has with the temporary work agency has the effect that the status of the agency is that of a client or customer of a profession or business undertaking carried on by the individual; or
(b) there is a contract, by virtue of which the individual is available to work for the hirer, having the effect that the status of the hirer is that of a client or customer of a profession or business undertaking carried on by the individual.
Then, they add in (5), An individual is not prevented from being an agency worker—
(a) because the temporary work agency supplies the individual through one or more intermediaries;
(b) because one or more intermediaries supply that individual;
(c) because the individual is supplied pursuant to any contract or other arrangement between the temporary work agency, one or more intermediaries and the hirer;
(d) because the temporary work agency pays for the services of the individual through one or more intermediaries; or
(e) because the individual is employed by or otherwise has a contract with one or more intermediaries.
Now, on the basis of this, a contractor carrying on his profession or business undertaking (whether or not using an own company) would appear to be outside the scope of the regulations. And a contractual statement to that effect will help reinforce the position.
But if that is not the case then simply dropping a ‘ltd’ company into the chain is not going to take him/her outside the regulations. And making a contractual statement that is in fact a sham - a lie - will not help.
The expert was Roger Sinclair, legal consultant at IT contracts advisory Egos.