48 Hours Opt Out For A Contractor

[BIG MOLE]

Hello All

A long time lurker here who has been meaning to post for a while and now has an issue that would benefit from the collective knowledge and experience of this great and noble forum.

I work as a sub-contracting mechanical design engineer through my own limited company of which I am an employee and also a director, getting paid via a mix of salary and dividend (a set-up I am sure know many of you will be familiar with).

I am working at a company that I have contracted at in the past on a number of occasions. I have been offered a 6 month contract with a significant chance of extension.

The company has a new head of HR who is learning the ways of what is a new industry for her. She has asked me to sign a 48 hour opt out agreement as they do for all their employees.

My question is, is it appropriate for me to sign this. I am not an employee of this company. I am effectively an outside supplier providing a service to this company.

The HR boss says they have a duty of care to make sure I am happy to work extended hours (to be honest, I’d be a bit upset if I wasn’t working at least 48 hours a week). I appreciate the sentiment, they are the best company that I have ever worked for and have always treated me, the other contractors and their staff very well.

My argument was that, as a contractor and an employee of a separate company, it was not their job to make sure I was happy to work extended hour, even though all of this would take place at their offices.

I would reiterate, I have a great working relationship with this company, including the management. Nobody is trying to force me into anything. We have just come across a grey area which none of us are 100% sure about.

I know that there have been some changes in the law regarding temporary staff getting the same rights as permanent staff but I’m not sure if this applies to this situation.

Sorry for the long first post, but this forum seems to be the best place I have come across to get advice from other people who may have been in a similar situation.

[GadgeS3C]

I'm not a contractor and only have limited knowledge of the contracting world but that sounds like it could get in the way of IR35.

Beware of "helpful" HR staff covering their own arse!

I'm sure someone that knows their stuff will be along shortly.

Edited by GadgeS3C on Wednesday 4th December 08:52

[BIG MOLE]

IR35 is my main concern.

I think my working practices and accounts say I am definately a contractor but I think once you start to sign bits of paper designed for employees it becomes a slipery slope.

[Mr Pointy]

Have you asked on the PCG forums? There is a lot of information available there.

[BIG MOLE]

I haven't looked at the PCG. I am not a member but my accountant has mentioned that I should join, if only to provide another (small) indication to our wonderful public servants at HMRC that i am indeed a contractor.

I will look at their forum and maybe post to see if anybody there can shed any light.

[shtu]

Present them with a copy of your company's WTD opt-out, signed by you?

[0000]

shtu said:

Present them with a copy of your company's WTD opt-out, signed by you?

This is what I did.

[marshalla]

AFAIk, thanks to the Agency Workers Directive, contractors are subject to the WTD and have to be treated in the same way as employees in respect of it.

Hints from ACAS : http://www.acas.org.uk/index.aspx?articleid=1873
Explanations from CWU : http://www.cwu.org/assets/_files/documents/sep_12/...

I suspect the HR manager is having trouble working out exactly which category of agency worker you fall into (if you own your own business then you are exempt), and then also struggling to figure out which of the permies you should be compared against for compliance.

[BIG MOLE]

Thanks for the replies and the useful links.

I am the owner of a limited company so from the information in the links it appears, as I initially thought, that it does not apply to me. There is no agency involvement, I have worked with the company for a number of years and I invoice/bill them directly.

The new HR manager has come from an industry where everyone is an employee and so is not familiar with the various nuances of contractors and contracting (not a critisism).

If it makes them feel more comfortable, I may offer them a WTD opt out from my own company.

[mrmr96]

BIG MOLE said:

If it makes them feel more comfortable, I may offer them a WTD opt out from my own company.

seems sensible

[mr_spock]

0000 said:

shtu said:

Present them with a copy of your company's WTD opt-out, signed by you?

This is what I did.

Yup, this. You could include a covering letter from you as Director confirming that any employee supplied by your company will have opted out. That way you also deal with the substitution clause in your contract, which I assume you to have.

[Carl_Docklands]

mr_spock said:

0000 said:

shtu said:

Present them with a copy of your company's WTD opt-out, signed by you?

This is what I did.

Yup, this. You could include a covering letter from you as Director confirming that any employee supplied by your company will have opted out. That way you also deal with the substitution clause in your contract, which I assume you to have.

That sounds right, the information you will find on PCG/It Contractor forum generally refers to the Agency Regulations Opt Out.

[TJW]

Hi,

I work for a recruitment agency in the contract market for Automotive & Aerospace companies and I would normally suggest our contractors to read the following links -

http://www.matchtech.com/career-advice/eaa-informa...

"Opting-out for Limited Companies
If you are a Limited Company Contractor, the Regulations allow for you to "opt-out". Whilst the regulations have been conceived to ensure greater legislative protection for candidates, there may be issues which conflict with the spirit of the IR35 rules. The ability for you to opt-out, gives you the choice to remain contracting in the same way as prior to the Regulations. Opting out of the Regulations will have benefits if you decide that you want to be considered self-employed. This will mean you will not be afforded the same protection as that of our PAYE workers but does bring you a step closer to being seen as genuinely self-employed and therefore could be viewed as outside the scope of the IR35 tax rules. It will also give you greater flexibility in negotiating your contract terms. If you wish to opt-out, you will need to opt-out before your contract starts and you should do this by informing your consultant that you intend to opt-out then complete the EAA opt-out form."

Hope this helps a bit.