Preferred Supplier List

[Cheshire Cat]

Hello,
I tried to post this earlier, didn't work.
I've been lurking for a while and thought you might be able to help with a query I have.
I was recently emailed by my agency with details of their upcoming "preferred supplier list". This states that anyone who wishes to use an umbrella must choose from their shortlist, and applies to all new contracts and renewals after Dec 3rd.
I use an umbrella that is not on their list, so if/when I get offered a renewal early next year I will be forced to either choose an umbrella from their list or set up as a ltd company.

Ignoring the arguments for setting up a ltd company, which I'm sure there are plenty of on here already, does anyone have any suggestions about what I might do should I wish to remain with my current umbrella working for my current client beyond the renewal date?
Since the agency have a term preventing me from cutting them out of the loop in the event of a renewal, I guess I have little option, but perhaps since they imposed this new supplier list afterwards I might have some argument for either insisting I use the same umbrella or terminating the deal with the agency and using another (assuming they don't have the same preferred supplier list).
Does anyone have any thoughts on this? Or has anyone been in a similar situation?

Thanks in advance for your help / opinions.

[LisaContractorUmbrella]

Most agencies operate prefered suppliers lists but they should be just that - 'prefered' or recommended. Providing that the company you are using is compliant there should be no problem. Have you been told that your contract will not be extended if you do not use one of the companies on their list?

[Cheshire Cat]

Yeah, I was a little bit confused by the term "preferred" alongside the phrases "This will apply to all new contracts and renewals starting on or after 3rd December 2007" and "contractors with current contracts on 3rd December will continue to contract through their existing supplier until renewal" which suggest that using an umbrella from the list is actually a condition.

Given that the conditions have therefore changed, I could argue that the contract I signed with Pathway was not the one that will exist at the time of my renewal and as such I should be free to dump the agency. I could argue this of course, but I'm sure part of the convoluted contract I signed binds me to ANY changes in Pathways T&C's, plus the soul of my first born.

If anyone can suggest a feasible contractual argument against being compelled to use a "preferred" supplier, please speak now.

Ta

[NotAllThere]

Why not get your umbrella to contact the agency and get on their PSL?

[XLMonkey]

I'm sure part of the convoluted contract I signed binds me to ANY changes in Pathways T&C's, plus the soul of my first born.

the contract may say that (!!) but that doesn't necessarily mean that the contract is lawful.

IANAL, but I think it unlikely that they can force you to switch umbrella company as a condition of continuing your contract - its a restraining condition that wasn't there when the contract was started, and I don't think that they can enforce it now.

However, its a bit of a moot point, because its very unlikely that the pain involved in fighting it legally would be worth the gain if you won.

Previous poster's suggestions look more sensible - ask your umbrella to get onto their PSL list. Provided your umbrella is reputable it shouldn't make too much of a difference to the agent (part of the reason the agent introduces the PSL is to protect itself against the claims that might arise when an umbrella gets into trouble)

[tim123]

If anyone can suggest a feasible contractual argument against being compelled to use a "preferred" supplier, please speak now.

Ta

The reason why an agency might reasonably insist that you use someone from their list, is because they need to perform the due diligence on the supplier, under the MSC legislation, to avoid becoming liable for any unpaid tax.

If this is the reason for the list, then there ought to be an easy way that your supplier can join the list.

However, some agencies will use this creation of such a list to restrict suppliers to those that pay referral fees :-(

HTH

tim

[TheFaQQer]

the contract may say that (!!) but that doesn't necessarily mean that the contract is lawful.

IANAL, but I think it unlikely that they can force you to switch umbrella company as a condition of continuing your contract - its a restraining condition that wasn't there when the contract was started, and I don't think that they can enforce it now.

However, its a bit of a moot point, because its very unlikely that the pain involved in fighting it legally would be worth the gain if you won.

Previous poster's suggestions look more sensible - ask your umbrella to get onto their PSL list. Provided your umbrella is reputable it shouldn't make too much of a difference to the agent (part of the reason the agent introduces the PSL is to protect itself against the claims that might arise when an umbrella gets into trouble)

But it's not a change to an existing contract (they aren't making th OP change now), it's a condition of a new contract.

[XLMonkey]

But it's not a change to an existing contract (they aren't making th OP change now), it's a condition of a new contract.

Arr, that be where you're both right and wrong at the same time cap'n.

Although it is being described as a new contract, the legal position isn't quite as straightforward as that.

The OP has a contract right now, with a restraining clause that says "you can't go direct for x months after the contract expires etc etc".

The agent is now proposing new contract terms that require the OP to use a particular set of umbrella companies, as a condition of continuing to offer the OP work with the client.

In law, these two contracts are linked by the fact that the OP was working for the same client at the time, and the work was ongoing at the time that the new contract was proposed. The courts will treat this situation quite differently from a new piece of work starting with a new client. In this case, they will take into account the existence of the old contract in any dispute over the new one.

Sooooo..... whilst the agent does have the right to propose the new contract, and does have the right not to offer the OP continued work if he/she doesn't sign it, the courts are likely to treat the restraining clause as unlawful if the conditions of the new contract are substantially different from those of the old one.

(which is one of those esoteric legal points which is interesting to debate, but pretty useless unless you like the idea of spending lots of money on lawyers....)

[Cheshire Cat]

Thanks for your views chaps.
In all likelihood I may form a ltd co anyway, sounds less sticky.

p.s. What's "IANAL" mean. My guess is "I am not a lawyer".

[Kylie4485]

Why not get your umbrella to contact the agency and get on their PSL?

That would probably prove quite difficult, usually once an agency has chosen their suppliers that is that, they probably would have had many, many meetings with the companies selected prior to their final list.

my impression was that a few Agencies, would prefer to have nothing to do with what Umbrella Company their contractor decided to go with due to the transfer of debts legislation.