Agent FUD part II

With regards to this issue I note the reaction to Agents. We might be in danger of losing a real opportunity to put some pressure on Government.

The Agencies are only reacting to a market opportunity created by a combination of their lobbying and the incompetence of this Government to see through it.

This Government has created such uncertainty with the increasing burden of employment regulations (and penalties!) and now IR 35, that they have created a market opportunity for Agents to effectively "insure" against this risk.

The bigger agents have the staff to think strategically and are good at spotting an opportunity (or creating one). It is how they got to be big.

The argument about Direct IT staff, is also the same argument that would be used to say "are you at risk employing someone?"

Answer: YES

Solution: Fire them on Friday and re-employ them on Monday, through an Agent who in turn employs them through a Ltd Co.

(Those who have studied the new Agency legislation will note that the restriction in the present regs on agents encouraging Fri to Mon has been quietly removed in the new draft)

Therefore the Government, through its actions, is creating an effect that is completely opposite to its intentions.

Remember: IR 35 press statement. This bit in particular:

The Government is committed to encouraging modern businesses which develop and build on the strengths and commitment of their workforce. The aim of the proposed changes is to ensure that people working in what is, in effect, disguised employment will, in practice, pay the same tax and national insurance as someone employed directly.

2. Businesses employing their workers directly say that they are unable to compete with those encouraging the avoidance at which the new legislation is aimed. As a result, ordinary workers can find they are unable to compete for jobs with those willing to participate in such arrangements. But those who do participate often have to pay a price in terms of loss of protection under employment law. They may find their terms and conditions altered - perhaps losing entitlement to sick pay or maternity leave. They may even lose their jobs without entitlement to notice or redundancy pay. They will usually have no right to any claim for unfair dismissal and may lose their entitlement to social security benefits through a failure to make adequate contributions.

Compare these noble objectives, which are difficult to argue against, with the result of IR 35.

1) A bounty offered to staff to "shop a contractor" (who are employed by their own company and paying themselves a low salary) so they may be replaced with an overseas contractor (who are employed by someone else's company, and being paid a low salary)!!!

2) A sales pitch from an Agent to open the door to encouraging companies to shed staff and reemploy them through the Agent.

Thus we have a situation where:

• Workers' rights are abused
  
• The competitiveness of the UK industry is reduced (With the internet, you do not need to pay 10%-35% of the "wage" to sort CVs)
  
• The genuine business is forced out of business due to an uncertain regulatory environment.
  
• "Ordinary" UK passport holders are forced, due to their absolute disgust at the incompetence of the government, to uproot their families and go overseas.

Therefore:

With regards to Agents. If we direct our attack on them, we are shooting the monkey rather than focus on the organ grinder.

Copy this url to the shareholders of the big agents and watch how their share price starts to suffer as their owners realise the damage caused by the short sighted actions of their Directors. The rapid loss of respect and massive increase in demand for services such as the PCG portal will lead inevitably to their demise, unless they start adding real value, rather than rely on an uncertain regulatory environment.

We need to use these examples as an opportunity to turn the screw on a Government that needs help in realising they are making serious, eventual loss of power, economy threatening mistakes.

After all, if you believe the surveys, we helped elect them

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Andy White