Employment Agency Regulations: they probably apply to you

Employment Agency Regulations
Employment Agency Regulations

Employment Agency Regulations

We received this article about the Employment Agency Regulations from legal expert John Antell.

Conduct of Employment Agencies and Employment
Businesses Regulations 2003
came into force on 6th April 2004. Though some individual regulations will not come into effect until 6th July 2004 or later under transitional provisions).

John Antell gives an overview of the changes.

The scope of the regulations

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 are issued under the Employment Agencies Act 1973. They replace the previous regulations which date from the late 70s and early 80s.

Their scope is wider than you might imagine. That’s because they us the word ’employment’ in the Employment Agencies Act 1973 in a wide sense. It is to include the services of the self-employed.

Like a householder who may say that he has ’employed’ a builder to construct an extension, the Act uses the term ’employment’ to include ’employment by way of a professional engagement or otherwise under a contract for services’ (s.13(1)).

Opting Out of Agency Workers Regulations
Agency Workers Regulations Opt Out

The Act and the Regulations use other words in unfamiliar ways. What the Act terms an ’employment agency’ is what is normally termed a ‘recruitment agency’. That’s a business which puts those seeking work in touch with those who want work carried out. It leaves the parties to agree the terms of engagement.

Employment Business

And what the Act terms an ’employment business’ is what one would normally call a ‘contract agency’. That’s a business which itself contracts with a person who then carries out work for a client of the business.

In order to come within the definition of an ’employment business’ the client must engage the contractor to ‘act for, and under, the control of’ the client.

Clearly in the case of a professional engagement the control by the client would not normally be control of how the professional contractor does the work. However, the essential point is that such control as there is – for example, a co-ordinating control over when the various parts of the work are done – is exercised by the client rather than by the employment business.

AWR Now Includes Limited company contractors

Most IT and engineering contractors contracting via an agency will come within the Regulations including limited company contractors which regulation 32 specifically includes.

Outside Agency Workers Regulations
Outside Agency Workers Regulations

In the case of limited company contractors, however, the individual worker and his limited company can agree that the regulations are not to apply and providing they then give notice of that agreement to the agency before the work starts, the regulations will not apply.

The ability to opt-out in this way applies only to limited company contractors. It is unlawful for the agency to make assignments conditional upon the limited company contractor opting out.

Future articles will discuss the new rights which the Regulations give to contractors.

Contractual Disputes & Employment Law

John Antell is a barrister specialising in contractual disputes (particularly those involving IT, engineering or construction) and in employment law. Barristers must normally be instructed through a solicitor but chartered engineers,
Members of the Institution of Electrical
(whether chartered or not) and some other professionals can contact barristers directly for advice.

Neither the author nor the publisher can be held responsible for any actions undertaken as a result of the opinions expressed in this article which are necessarily of a general nature and cannot be a substitute for individual legal advice on your own particular situation.

© John Antell

We will publishing more on what the Employment Agency Regulations means to contractors.