EU Agency Workers Directive
So what keeps agents awake at night – agency workers directive is the answer? According to a new survey from REC the EU Agency Workers Directive is their third biggest fear.
This is where certain right are given to temporary workers, including contractors.
Here are the benefits that can be accrued:-
1. Contractors can go direct to their clients at the end of their current contracts – for a small fee.
2. Recruitment Agencies must pay up without signed timesheets being produced.
3. Recruitment Agencies must pay up whether or not the client pays up.
Opt Out to EU Agency Workers Directive
Unfortunately, as far as I can see, the Contractors Group IPSE negotiated an opt out from this for limited company contractors. Supposedly contractors can decide whether to opt in or out here.
A reason put forward by IPSE for lobbying for this is that they felt that any contractor who didn‘t opt out would be more likely to be caught by IR35 and that small businessmen didn‘t want to be legislated for by the Government.
Legal experts say now that the IR35 factor is a bit of a red herring, and is marginal as far as the effects are in deciding IR35 status, if it has any effect at all. In fact, if a contractor has his or her own clients rather than ones where he or she is provided by an agency, it might even point in the opposite direction.
In Practice Contractor Hss Ne Real Opt Out
What has actually happened in practice is that the contractor, in many cases, doesn‘t have a real opt out at all from the EU Agency Workers Directive
Agencies are asking contractors beforehand whether they are opting out or opting in, just for informational purposes you understand, and are lobbing extra charges on those that don‘t opt out.
Of course, what is left unsaid is that agencies won‘t be getting contractors who don‘t want to opt out any work.
That is not what the legislation was created for. IPSE should have smelled a rat when they saw that agencies‘ representatives were lobbying for exactly the same thing as they were lobbying for.
Still the very fact that agencies have it as their third biggest fear means that they are not too confident that they can override the benefits to contractors from the legislation.
Agencies Fear Court Challenge
They must fear that a court challenge would stop them from the practice of only getting work for contractors who opt out. Unfortunately, contractors doing this would not get backing from IPSE as they are on the same side as agencies on this.
Often agencies and contractors are in the same boat – but not, one would think, where the EU was offering benefits to contractors to the detriment of agencies.
Still, contractors should watch this closely in the future to see how this one plays out.
Most contractors would see agencies having this as their third biggest fear as something that contractors would instinctively view as being of potential benefit to themselves.
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