Reflex Computer Recruitment - Conduct Regulations

Employment Legislation Update

The Conduct of Employment Agencies and Employment Businesses Regulations (known as the EAA Regulations), became law in 2004 and designed to replace old legislation on the recruitment sector. Full details of The Employment Agency Act can be found at: http://www.legislation.hmso.gov.uk/si/si2003/20033319.htm If you would like further information on how this may affect you, The DTI has alsopublished a general advice guidance document : http://www.dti.gov.uk/er/agency/conduct.pdf.

Although designed with good intention, the EAA regulations appear to focus on PAYE & payroll Contractors, rather than the usual Limited Company Contractor business format. Click here for REC specific guidance leaflet for Candidates. As a result contractors wishing to register with an agency may now go through a much longer registration process, which involve a number of additional stages, including:

1. We need confirmation from Contractors as to the full type & nature of work they are seeking.

2. Before we submit Contractors details to any client we have to fully check a Contractors ID. The
REC advises that we require sight of a photo ID, together with any visas where appropriate.

3. We have to provide a model contract to each contractor, which will have to altered at a later date.

4. We also have to fully check Contractors experience & training for each role role, which may long
& involve in-depth referencing prior to Contractor details being put forward for a contract.

Currently the most practical advice can be found from The Recruitment Industry standards and regulation body The Recruitment and Employment Confederation (The REC) website, http://www.rec.uk.com. Reflex Computer Recruitment are leading members of the REC and abide by its strict code of conduct. The REC has produced some specific guidance leaflets and the links can be found further down this page.

Help is to hand: Fortunately the Government, have accepted as a special case that the IT Contract sector is geared to Contractors using either their own Limited Companies or Umbrella Companies. As a result Contractors operating specifically via Limited Companies can opt out of the Agency Regulations - see below. Click here for REC information for Limited Company Contractors regarding opting out of the regulations

What is the effect of 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.

Why should a limited company contractor consider opting out of the Agency Regulations?
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.
Certain recruitment agencies are also suggesting an additional on cost to clients where there are additional administrative requirements for managing contractors who have opted in to the Agency Regulations. This again may disadvantage contractors where clients prefer to avoid the additional on cost. Click here for REC information for Limited Company Contractors regarding opting out of the regulations

Some contractor groups, such as The Professional Contractors Group http://www.pcg.org.uk have 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. The Professional Contractors Group has published a Guide to Agency Regulations if you are a member or just wish to investigate further you view http://www.pcg.org.u

What is Reflex's view on to either opt in or opt out of the Agency Regulations?
Reflex offers all its limited company contractors the choice of opting in or to opt out of the new Regulations. At the time this document was produced, it appears that various contractor organisations and groups are suggesting to limited company contractors that they opt out of the Agency Regulations.

How should a limited company contractor opt out of the Agency Regulations?
All limited company contractors who wish to exercise a choice to opt out of the Agency Regulations must notify Reflex in writing prior to their contract assignment or the renewal of their current contract assignment. If as a limited company contractor you wish to opt out of the Agency Regulations then please notify your contact at Reflex in writing or email us at regs.optout@reflexgroup.co.ukk stating your agreement to Opt Out. Alternately Reflex Computer Recruitment has an approved consent form for those contractors who wish to take advantage of this which can be downloaded by clicking here. If you wish to opt in, then Reflex will be quite happy to accommodate your choice and in which event, you will need to notify Reflex at regs.optin@reflexgroup.co.uk and we will then send you a revised contract and advise you of the additional procedures which will need to be applied.

For Employers
Employment agencies are now obliged to check health and safety risks on behalf of candidates and contractors, and will request this information from employers. If you would like to know more about these regulations please click here for REC information for Clients.