Conduct Regulations - Opt in or Opt out
The Conduct of Employment Agencies and Employment Businesses Regulations 2003 came into force in 2004 with a view to implementing a set of minimum standards for the conduct of the private recruitment industry in the UK.
The Act aims to protect the best interests of the candidate, as well as the interests of the hirer. Additionally, the regulations provide added protection for jobseekers and companies using the services of recruiters and stipulate how recruitment businesses should operate.
The Regulations provide some protection during an assignment. In particular, the Regulations seek to ensure that:
• You will get paid by the agency even where they do not receive payment from the end client;
• The agency cannot restrict you from providing services directly for the end client upon termination of the contract;
• The agency does not withhold pay in certain circumstances;
• The agency provides you with specific information relating to the services they will provide and the assignments they have sourced for you;
The agency cannot charge you for their work-finding services, or require that you pay for additional services from them in order for them to find work for you.
Informing the contractor of Health & Safety practices
As well as providing the candidate with factual and detailed information about a vacancy, the agency must share with you any Health & Safety documentation that the end employer has provided.
What is the conduct regulations ‘opt out’?
A candidate can choose to ‘opt out’ of the regulations. Whilst the regulations are to ensure greater legislative protection for candidates, there may be issues which conflict with the spirit of the IR35 rules.
What are some of the advantages of opting out?
One of the main considerations for a contractor is their IR35 status. There is a potential argument that in the event a contractor receives regulation protection, this could cause issues with IR35, on the basis that the regulations apply solely to workers under the control of the end client.
Given that “control” is an indication of employment, which is a test that essentially underpins an IR35 assessment, it could be argued that “opting-in” for contractors could be a negative from an IR35 perspective. Alternatively, since it is exercising good management values, it could be considered that taking a commercial decision which is in the best interest of the company is an IR35 positive.
It can be perceived that “opting-out” provides for greater flexibility. The regulations impose certain obligations on the contractor including requiring the terms of the services to be confirmed in writing and vetting any sub-contractor to ensure they hold the relevant qualifications and experience prior to any contract being entered into. The increased admin and potential delays in commencing the services could be deemed by some contractors to be too time consuming and cumbersome.
An additional point to note is that the regulations do not allow you to “cherry pick”, meaning that you cannot pick and choose which parts of the regulations to “opt-out” of. The regulations are “all or nothing”, meaning that you either have to have full protection or “opt-out” in its entirety.
Omnia ensures that a contractor is aware of the implications of an Opt Out, utilising the information provided above. Should you, as a contractor wish to withdraw the Opt Out, then we will advise you to opt back into the Regulations by writing to your agency and Omnia with your request to do so.
Omnia will confirm with the agency upon receipt.