Legal aspects of Contracting
Opting Out of The Conduct of Employment Agencies and Employment Businesses Regulations 2003
The Conduct of Employment Agencies and Employment Businesses Regulations 2003 (the Regulations) govern the conduct of the private recruitment industry and establish a framework of minimum standards that clients, both work-seekers and hirers, are entitled to expect. They came into force in April 2004 and were subject to minor changes in October 2008.
The Regulations are designed to protect agency workers that are controlled by the client. However, skilled IT contractors would not consider themselves to be controlled by the client (which might be taken as an employment status indicator for IR35 purposes) and in addition they will be operating as a service company (umbrella company or their own limited company) rather than an individual worker.
Consequently many IT contractors opt out of these regulations by delivering a notice to that effect to the Employment Business (as described in section 32(9) of the regulations, and so for your convenience we have a sample letter (in .rtf format) that you may use to notify us that you wish to opt-out. Note that this notice must be issued BEFORE we introduce you to a prospective client.
The Department for Business, Innovation and Skills (or rather the Department for Trade and Industry as it was called in 2003 produced a guidance booklet for the regulations. This document has not been updated with the October 2008 changes but we don’t believe that these would be of much interest to contractors.
Off Payroll (IR35) Reform
Reform around the off payroll rules means that from April 2021, all clients using contractor services will need to provide IR35 status determinations for the contractors providing those services. People Connectors are supporting and will continue to support our clients and contractors to help ensure the status determinations are thorough and correct with reasoning provided in each instance. This will ensure contractors are treated fairly and if you are deemed ‘inside IR35’, the correct amount of statutory deductions are made before we pay your invoice.
Although we provide links to websites we think are helpful for workers providing their services on a contract basis, we do not receive monetary benefit from doing so.
Clear Fair Contracts
Our contracts are drafted to be as clear and as fair as possible and updated as necessary to reflect any legal changes. Our legal advisers do insist on adding references to various legislation. For the convenience of our contractors we have included below links to the legislation referred to in our contracts to ensure that you can easily familiarise yourself with rights and obligations conferred in legislation referred to.
- Health and Safety at Work legislation. Click here for a single page guide issued by the government.
- In describing the unlikely situation of insolvency of any of the parties to the contract we refer to the Insolvency Act 1986 section 123
- In describing the term Client we refer to any companies that are either a holding company or subsidiary company according to the definitions in the Companies Act 1985 section 736 and as redefined in Companies Act 2006 section 1159.
- Employment Relations Act 1999
- The Employment Rights Act 1996
- Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000
- The Transnational Information and Consultation Of Employees Regulations 1999