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Employment Agencies & Employment Businesses Regulations 2003

The statutory legislation bought about by The Conduct of Employment Agencies and Employment Businesses Regulations 2003 placed new obligations on Agencies and their Limited Company Contractors / Temporary Workers throughout the UK. The regulations were specifically introduced to protect vulnerable individuals engaged in low paid temporary posts. Employment Businesses are now obliged to thoroughly vet all contractors and obtain information on their eligibility to work in the UK and ability to perform the role for which they are engaged. In addition the restrictive period in which a contractor can take up a permanent offer of employment with a client where they have completed a previous assignment, without a permanent agency fee being applicable has been limited.

However, the new regulations include a provision for Limited Company Contractors to agree to "Opt-Out" should they not want the regulations to apply to them. In such cases the contractor should provide written notice of their intention to do so prior to commencement of an assignment.

Why "Opt-Out"?

Employment Businesses and Agencies cannot require contractors to opt-out of the Regulations. However in a number of cases the costs of complying with the regulations may result in a two tier market where contractors are offered different rates of pay depending on whether they opt-out or stay within the regulations, as additional costs are passed to clients. This being the case it is likely that contractors not opting-out of the Regulations may be offered a lower pay rate than those who choose to do so.

[DISCLAIMER - This information is provided as a reference guide for Limited Company Contractors regarding the developments in law and their impact on the business activities of CPC Recruitment Ltd. This information is not intended to provide specific legal advice. You should consult a lawyer with any specific questions related to the Conduct of Employment Agencies and Employment Businesses Regulations 2003.]