For Clients: Employment Regulations

The Conduct of Employment Agencies and Employment Businesses Regulations (2003) ('The Regulations'), governed by the Employment Agencies Act 1973, became law in April 2004. They regulate the way employment businesses (agencies) deal with both permanent and contingent recruitment, aiming to ensure a high level of professional conduct in the recruitment industry.

Many trade and contractor organisations successfully lobbied the government to allow limited company contractors the choice of opting out of The Regulations, because it is widely perceived that they are not appropriate for people working via a business-to-business relationship, whereas they are more appropriate for agency workers who have an employer-employee relationship.

How does this affect Osirian's clients?

In our experience, clients prefer to use contractors who have opted out because:

• The Regulations allow an 'opt-in' contractor to work for more than one client at once, including a direct competitor of the end client, and do not allow the inclusion of a restricted covenant in the contract.
• 'Opt-in' contractors, by seeking legal protection more in keeping with employment status, may cause concern that they could subsequently seek employment rights too.
• The Regulations require considerable extra administration before a candidate's details can be submitted to a client. With contractor demand requiring the speed that it does, the end client is more likely to hire someone who is available quickly and with fewer formalities.
• Before receiving any candidate details, the client must specify any health and safety risks along with the controls they have implemented to manage such risks.

For most clients (and contractors), the above disadvantages are not balanced by any obvious benefits. The Regulations provide the right for clients to employ only 'opt-out' contractors if they so choose.

When do contractors opt out?

To opt out of the Regulations, the contractor should do so before they are introduced to a client. Osirian's recruiters are trained to discuss this with contractors at the outset. The opt-out must be implemented before they commence work.

Can they opt back in?

An opt-out can be withdrawn at any time, but will not take effect during the term of the current assignment.

More details

Further information is also available on the Department for Business, Enterprise and Regulatory Reform website:

• www.berr.gov.uk/files/file24248.pdf
• www.berr.gov.uk/files/file25630.pdf