Right of Substitution Contract Amendment

[Dante]

Hello guys.

I've just started a new 6 month contract at reasonably short notice and have just had the contract reviewed by QDOS, who recommended a few smaller changes and one particular change affecting the Right of Substition that, unless amended would see the contract fail IR35.

Ths change was to add the words in bold:

"The Contractor may substitute, with agreement from both the Company and the Client which shall not be unreasonably witheld, the Consultant named, for another Consultant of equal or greater experience to perform the agreed duties for a period of time as agreed by all parties."

Now i don't feel this to be a massive change but the agency are being total arseholes about it and saying things like:

• All of our other contractors are happy with it.
• We've been using it since 2005
• The agency / contractor contract has to mirror that between the agency and client (and i think they're a bit scared of talking to the client)

etc. They are saying that although the clause is in there - they would never give permission to a substitute and would therefore not want the 'unreasonably witheld' bit in there.

I've said to them that it doesn't really matter if they've had x contractors using it for x years - it's a fail - bottom line. And i've also suggested that they get it reviewed by someone else if they're not happy with the independence of the review. They seem to think they know better than the experts, which following the responses to my questioning and reasoned argument is definitaly not the case!

Any thoughts on how to progress? is it really a show stopper?

Cheers.

Dante

[Sockpuppet]

If you've started you've accepted the contract already.

They might have changed if you had stayed at home.

[TheFaQQer]

If you have taken advice, and the advice is that the contract is a fail, if you were then investigated, I think that this might put you in a harder position to defend.

You may be able to get Qdos to do the negotiations for you with the agency - I think that B&C will do this for a fee, so Qdos probably would.

I would walk if it were me, but talk to the client first and explain that you only want a minor change to the contract but the agency are being unreasonable. Get your side in first, and then tell the agency that you can't accept the contract like that so sorry, you won't be taking it.

UNLESS - you need the job anyway and would be prepared to take it on the basis of being IR35 caught. You could try telling the agency that if they can't remove the clause, the expert legal advice you have taken indicates that the chances of it being deemed inside IR35 are considerably higher, therefore you need to get a higher rate to mitigate against the higher risk.

[Ardesco]

With the recent IR35 rulings made by special commissioner Hellier this is probably new advice that QDOS are making to ensure that the substitution clause stands up in court.

I would say it probably is a show stopper.

Also bear in mind that if you have started it was last copy sent to the agent before you started. If you are still haggling after that the contract is not set in stone. (You could theoretically sent a PCG template contract to the agent the day before you start to cover yourself until the final contract is signed and sealed).

Tell them that this changes is due to the recent IR35 court cases so it doesn't matter that their contract hasn't changed since 2005, this change is due to a ruling made in 2008.

[TheFaQQer]

With the recent IR35 rulings made by special commissioner Hellier this is probably new advice that QDOS are making to ensure that the substitution clause stands up in court.

I would say it probably is a show stopper.

Also bear in mind that if you have started it was last copy sent to the agent before you started. If you are still haggling after that the contract is not set in stone. (You could theoretically sent a PCG template contract to the agent the day before you start to cover yourself until the final contract is signed and sealed).

Tell them that this changes is due to the recent IR35 court cases so it doesn't matter that their contract hasn't changed since 2005, this change is due to a ruling made in 2008.

Qdos have been recommending this for a while - they suggested the same change to a contract of mine in November last year. It makes it explicitly clear that it's a decent RoS.

[malvolio]

It's long been the case that the "not unreasonably withheld" rider should be included. Nobody will sign up to an unlimited RoS, in practical terms, and this is the usual form of words. I agree that you should get the client in the picture, if not in the loop.

However, if the agency (who are?? name and shame!) are deliberately issuing contracts that they have no intention of honouring, I think you could call them out as being in breach and go direct... Make sure you get the refusal to change, and the reasons, in writing or email though.

[Sockpuppet]

I think that B&C will do this for a fee

B&C did mine for free. But it was a large agy so once its in there they can pass/fail the std contract for others easily.

[TheFaQQer]

B&C did mine for free. But it was a large agy so once its in there they can pass/fail the std contract for others easily.

I've never used them - always gone the Qdos route, and when I've needed changes making, the agencies have made them.

Had an issue with Ajilon refusing to do it, but I said that I'd walk out of the gig, spoke to the client and explained, and they reworded the contract.

[Dante]

Thanks for the replies.

I've informed the client (who is an ex-contractor himself) about the issues and will go from there.

Cheers.