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Contractors retain Agency Regulations opt-out choice

Published on Nov 17, 2009 |

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The Government has confirmed that contractors will still be able to opt out of the recruitment agency Conduct of Employment Agencies Regulations.

The Department of Business Innovation and Skills (BIS) was proposing to broaden the Conduct Regulations, which were first introduced in 2003. One of its proposals was to remove the option which contractors who operate through limited companies or umbrella companies currently have of opting-out of the Conduct Regulations, despite the majority of contractors doing so voluntarily.

What do the Regulations involve?

The Regulations can prevent agencies from fully recouping their placement costs - for example, where organisations want to offer contractors permanent work. The Regulations make agencies more susceptible to fraud by stipulating that agencies must pay contractors even where contractors fail to produce valid timesheets. The Regulations also increase red tape by imposing increased obligations to obtain detailed information on both the position to be filled and the worker, before supplying workers.

In its submission to the consultation, APSCo called on BIS to retain the opt-out of the Conduct Regulations for highly paid contractors. The campaign against the BIS proposals was also backed by the Service Providers Association (SPA) and the Professional Contractors Group (PCG).

In a survey earlier this year, contractors were overwhelmingly in favour of keeping the opt-out.

An "important victory"

Ann Swain, Chief Executive of APSCo, commented:

"This is an important victory for the recruitment industry. If the opt-out had been withdrawn, the red tape burden on recruiters and contractors of automatically having to comply with the Conduct Regulations would have imposed significant additional costs.

"The Government has acknowledged that there is insufficient evidence of the opt-out being used to exploit vulnerable workers. It should concentrate on finalising the AWD regulations and getting the employment market back on track before it returns to this issue again."