Is new legislation protecting contractors?
Published: 24 Jun 2004 12:45 BST
Historically, the relationship between IT contractors and recruitment agencies can probably be described as at best tense and at worst downright antagonistic. Both sides have been guilty of questionable behaviour but while they needed each other equally, a status quo was established.
During the downturn, it seems agencies have enjoyed unparalleled power over their supposed clients. Contractors claim they have had unfair restrictions imposed on them, including agencies not paying them in certain circumstances and charging large transfer fees to dissuade companies from offering them permanent positions.
However, legislation introduced in April this year appeared to have the potential to tip the scales back in the favour of the contracting community. Termed The Conduct of Employment Agencies and Employment Businesses Regulations 2003, it imparts various benefits to temporary workers, including more flexibility in moving between temp positions and permanent roles, and various payment guarantees.
"In the future, everyone who uses the services provided by agencies and employment businesses can have greater confidence in them - both those companies that use them to supply staff as well as the agency workers themselves," said employment minister Gerry Sutcliffe in a statement at the time. "The vast majority of agencies are well run but we are ensuring that they do not face unfair competition from those who abuse their workers."
But it has emerged that some of the more unscrupulous agencies are putting pressure on contractors to opt out of the regulations or face the consequences. Tactics include reducing the pay rate of contractors who opt in or offering them unreasonable contracts.
One UK contractor contacted by ZDNet UK said he had received an automated email asking him to opt out of the regulations when he sent his CV to an agency. He was concerned that deciding to opt in would probably mean that the agency wouldn't put him forward for jobs. "It's a buyer's market, so agencies have a choice of which candidates to use and are likely to favour candidates that have opted out over those that have opted in," he said.
Ian Durrant, a director at the Professional Contractors Group (PCG), says his members have already encountered recruitment companies paying different rates to contractors according to whether they opt in or out. One agency even provided an unreasonable contract to an opted-in contractor and refused to change it unless he opted out. "There is definitely a problem with agencies coercing contractors," he says.
Martin Lewis, contracts manager at recruitment agency Square One, says that he has seen an email from another agency requesting an administration fee if the contractor didn't opt out. Square One is not charging a fee and is happy to have contractors opt in, although none have chosen to so far, says Lewis.
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