The Conduct of Employment Agencies and Employment Businesses Regulations 2003
The DTI introduced new Agency Regulations which apply to all Limited Company Contractors as from the 6th July 2004, however the limited company contractor has the option of opting out of the Agency Regulations providing they give the employment business (i.e. the recruitment agency) written notice prior to the commencement of the contract assignment.
The Agency Regulations were issued under the provisions of the Employment Agencies Act 1973 replacing most of the old 1976 Regulations and took effect in relation to all new recruitment services in relation to individual workers on the 6 April 2004. For all recruitment services supplied under existing contracts the Regulations did not take effect until the 6th July 2004. In addition, the Agency Regulations did not apply to limited company contractors until 6th July 2004.
After opting out of the Agency Regulations, the limited company contractor will not be required to comply with certain procedural requirements of the Agency Regulations e.g. identity confirmation. There will also no longer be any procedural requirement upon the recruitment agency to obtain certain information from the client before placement of the limited company contractor. In addition, certain contractual amendments need not be applied to the contract documentation to be agreed with both the limited company contractor and the client.
Agile HR Ltd operates both as an Employment Business (for the placement of temporary or contract personnel) and an Employment Agency (for the placement of staff in permanent positions directly with end Clients). In both instances we provide work seeking services to individuals whereby we try to identify suitable vacancies with our Clients that match the individual's particular skill-set, knowledge and experience. We do not charge you, the work seeker, a fee for our services in finding a suitable job, be that temporary (contract) or a permanent position.
Many limited company contractors appear to be taking the view that opting-in to the Agency Regulations may place them in a disadvantage in securing a contract assignment with a particular client. In particular the additional procedural requirements imposed upon the employment business and the client may delay the evaluation of that limited company contractor relative to a contractor who has opted-out of the Agency Regulations.
In addition, some clients appear to be concerned about the additional employment risk of limited company contractors seeking to opt in on the basis that by being subject to the Agency Regulations the limited company contractor will be more akin to a temporary employee rather than an independent contractor. Consequently, some clients may encourage the recruitment of contractors who have opted out of the Agency Regulations.
Some contractor groups have also suggested that those limited company contractors seeking to legitimately challenge the application of IR35 to their services could be more likely to be assessed within IR35 if the limited company contractor is subject to the Agency Regulations. This is because some view the Agency Regulations as principally applying to protect the supply of individual workers who are similar to temporary employees, which would undermine any arguments of a limited company contractor seeking to challenge IR35.
In accordance with the Agency Regulations, Agile HR is offering all its limited company contractors the choice of whether to opt in or to opt out of the Agency Regulations. For the reasons stated above, it currently appears that various contractor groups are suggesting to limited company contractors that they opt out of the Agency Regulations.
If you are a limited company contractor and wish to opt out of the Agency Regulations, please notify Agile HR in writing prior to your contract assignment or email us at optout@agilehr.co.uk stating your agreement to Opt Out.
If you wish to opt in, please notify Agile HR in writing or email us at optin@agilehr.co.uk stating your desire to Opt In and we will send you a revised contract and advise you off additional procedures which we must follow. For more information please see the DTI Website -
http://www.berr.gov.uk/files/file24248.pdf
or the Office of Public Sector Information Website -
