The Conduct of Employment Agencies and Employment Businesses Regulations 2003 (â€śthe conduct regulationsâ€ť) govern the conduct of the private recruitment industry and establish a framework of minimum standards that candidates and clients are entitled to expect. These conduct regulations do not merely cover the IT industry, but include the recruitment industry as a whole.
The conduct regulations came into force in most respects on 6th April 2004, however, they did not apply to Limited Company contractors supplying the services of a Consultant until 6th July 2004.
The conduct regulations are intended to regulate the employment business industry so that vulnerable â€śwork seekersâ€ť have legal protection from unscrupulous employment firms. For the purpose of the conduct regulations, both the individual contractor and his/her limited company (including umbrella companies) are considered work seekers and both are bound by the rules.
It is broadly accepted that the conduct regulations were not primarily intended to legislate around the IT industry, and consequently many professional contractor associations and bodies lobbied heavily for the professional contractor and his/her business to be excluded from the legislation.
Whilst this lobbying was not totally successful, a compromise was reached with the Government and Regulation 32(9) was utilised to allow IT contractors, and their Limited Companies, to â€śopt-outâ€ť of the cover of the Regulations if they so choose.
Why you may choose to â€śopt-outâ€ť
It is becoming more common for clients to favour opted-out contractors. In some cases, clients will only consider those that have opted out, as those that havenâ€™t may be in a position to seek employment rights from the end client. It is clear to see why this may cause the clients some concern.
The conduct regulations allow for the contractor to work for more than one client at the same time, which is usual in todayâ€™s IT contracting industry, but it puts no restrictive covenants on working for direct competitors, as is often a required clause in a client contract. This can lead to potential conflicts of interest and concerns around confidentiality.
There is an assumption under the regulations that any limited company contractor undertaking an assignment while opted in to the regulations will be acting under the supervision and control of the client for whom they are providing their services. This is due to the definition of â€śwork-finding servicesâ€ť which includes the phrase â€śunder the control ofâ€ť. This is very likely to have an adverse impact on the operation of IR35
Full information on the conduct regulations is available from www.dti.gov.uk/er/agency/newregs.htm
Guidance notes are available from www.dti.gov.uk/er/agency/conduct.pdf
The JM Group is an agency of repute and already conducts its business in a professional and honest manner. The conduct regulations introduce recognised standards to the recruitment industry and these are standards that The JM Group already operates to. Your decision to opt out (or not) of the conduct regulations will not affect the standard of service you receive from the jm group and its employees.
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