EASI, the body tasked with enforcement of the regulations on recruitment companies has a sharp focus on the application of contractual terms and the Conduct Regulations.
They are looking to see that recruitment companies can evidence the following:
- Clear terms agreed for providing work finding services with candidates as soon as you start to act for them.
- As the candidate is an individual (s)he is prevented from opting out of the regulations so all requirements must be met.
- Where the worker subsequently decides to operate through an umbrella there needs to be clear terms in place with the umbrella and these should categorise the umbrella as the work seeker.
- As the umbrella is the work seeker and a limited company, where the regulations allow, the umbrella and their worker can effectively opt out of the regulations.
- For the opt out to be valid a written notice must be provided.
- For the opt out to be valid the umbrella and the individual must agree, and must notify the agency, and the agency must so notify the client, all before the work-seeker (Umbrella) is introduced or supplied to the client (Regulation 32(9))
- Such notices must be in written form (can be paper or electronic) (Regulation 33) Failure to apply this process and clearly evidence the terms will result in workers being treated as within the regulations for all purposes.
We strongly advise that recruiters ensure they have clear processes in place and any umbrella they operate with fully understands your expectations relating to this.
With the Off-Payroll rules coming in from April and many end clients reviewing their engagement of contractors this is a key step to ensure recruitment companies protect their position and future revenues.