What are the “Agency Conduct Regulations”?

The “Conduct of Employment Agencies and Business Regulations” are a set of laws designed to protect vulnerable agency workers. They are usually known as the “conduct regulations”, less commonly as the “agency regulations”. The regulations offer protection from issues such as “handcuff clauses” – whereby the agency prevents you from working directly with the client for a set period of time (e.g. one year) “temp to perm fees” – where an agency charges you or the client if you choose to become a permanent employee of the client Late payment – in cases where the agency refuses to pay because they have not yet been paid by the client. They came into force in 2004, and all employment agencies are bound by them. The Government is currently considering abolishing the regulations and replacing them with simpler legislation. This is planned to take place in 2015.

Why is this relevant to freelancers and contractors?

If you work through your own limited company, then you are able to “opt-out” of these regulations. Indeed many contractors report that agencies will strongly encourage them to do so. It is likely that as a contractor you will be given some sort of form which, if you sign, will enable you to opt-out of the regulations. Your contract may include clauses with the effect of opting you out. You should think carefully before making a decision to opt-out of the regulations. There is no "right" answer and individual circumstances and preferences are always important. IPSE’s guide to the Agency Conduct Regulations covers both what to do under the existing regulations, and how any future legislation is likely to take shape.

What’s happening?

The Government will totally redraft the regulations but has said it will keep an “opt out” for contactors. We are monitoring the situation and will be expressing our view to BIS when new legislation is drafted. We responded to an earlier consultation which resulted in the commitment to the opt out being kept and we are working with other bodies.