Conduct Regulations

The Conduct Regulations Explained

 

The Conduct of Employment Agencies and Employment Business Regulations 2003, or more commonly referred to as the Conduct Regulations, were introduced to provide a minimum set of standards that must be adhered to when placing a work-seeker into a role in the UK.

 

What are the Conduct Regulations? 

The Conduct of Employment Agencies and Employment Business Regulations 2003, often referred to as the Conduct Regulations or Conduct Regs, provide a framework of minimum standards that govern the conduct of the recruitment industry in the UK.

The regulations were implemented to ensure recruitment companies treat both the candidates (“work-seekers”) and clients (“hirer”) fairly.

Workers to whom a recruitment agency provides temporary or permanent work finding services are within the scope of the Conduct Regulations, regardless of the supply model they work through. Contractors may opt-out of the regulations, but they must sign and return an opt-out agreement before starting the contract.

The Conduct Regulations cover:

• Information required from/given to the client and provided by/to the contractor;
• The contractual documentation which must be in place;
• When a contractor must be paid; and
• When transfer fees can be charged to the client.

What are the dis/advantages to contractors?

Contractors do suffer some disadvantages from opting out. For example, the agency is required to pay workers who are covered by the regulations even if they have not been paid; contractors who have opted out lose this protection. Plus, the agency must agree terms with the contractor before introducing them to the client; this significantly reduces contractor flexibility in what is supposed to be a flexible, highly skilled labour resource. In addition, if a contractor has opted out, then the agency can use restrictive covenants that can potentially restrict the contractor from using a competing agency or going to a competitor of the client. There are other regulations relating to temporary-to-permanent fees, which can negatively impact on the client if they want to take the contractor on as an employee or a direct contractor.

What does it mean to ‘opt-out’ of the regulations?

In recognition of the fact that contractors working through their own limited company might want to choose whether or not to be protected by the regulations, in 2004 an opt-out provision was introduced within the legislation. However, contractors operating outside IR35 should not be covered by the regulations, so most agencies will request a formal opt-out agreement for their own records.

Before a contractor is introduced to the client, the recruitment agency must receive a signed EAA opt-out form. If they don’t, the opt-out could be invalid, preventing the recruitment agency from putting restrictions on the contractor that have been requested by the client and putting the agency in breach of the regulations.

If a contractor is considered to be controlled by the client and does not opt-out, the agency must work through a series of steps. These include creating paperwork about the contractor’s suitability for the role and the client’s requirements, completing a Criminal Record Bureau (CRB) check for specific roles and checking the contractor’s qualifications.

Can a contractor withdraw an Opt Out Notice?

Yes, the contractor is free to withdraw from this Opt Out Notification at any time by giving not less than one weeks written notice to the Contractor. However, where notice is given during any assignment that would be subject to the Conduct Regulations 2003, the notice will not take effect until the Individual stops working in the position in question.

We will also confirm to the agency, of the contractor’s intention to withdraw an opt out notice at the first opportunity. By providing this opt out, New Red Planet Ltd also agree to the Opt Out.

 

It is important to note that when working in some roles, opt out of the regulations is not allowed. Specifically, these roles involve the contractor working with vulnerable people, who are defined as those under the age of eighteen or who, by reason of age, infirmity, illness, disability or any other circumstance is in need of care or attention.

 

In order to opt out of the Conduct Regulations, please contact a New Red Planet customer service advisor today.

 Call Us: 0161 713 1730

Email Us: info@newredplanet.com