Offered contract with end client

[FrontEnder]

I'm currently contracting with a consultancy for a project with their client (the "end client"). I've been there about a year now.

Coming up to renewal and I was sounded out by someone at the the end client about the possibility of contracting with them instead of through the consultancy. I'm one of only as couple of consultants with the consultancy, but there are a lot more with other consultancies on the project and with the client.

It would still be with an agency, however, mine are not on the PSL, so would not be able to go through them. I mentioned the handcuff clause (which after checking does include the end client as well as the consultancy), he said they'd look at working something out around that if needs be.

So I was just wondering if anyone else had been in this situation? A couple of questions I'm not sure about:

-As my agency do not have any relationship with the end client, is the handcuff clause still valid?
-Are there any possible IR35 implications?
-Any other considerations?

I'd be keen to know more about how the end client sees this relationship before considering IR35 implications. My feeling is it could be good or bad, depending on this.

Appreciate this may be a bit vague, but at the moment, there's a lot still to work out, I was only asked about it late last week and I don't think much will happen this week. I would guess the consultancy will extend me for January thus keeping the status quo while it's worked out.

[northernladuk]

I'm currently contracting with a consultancy for a project with their client (the "end client"). I've been there about a year now.

Ok. Your IR35 status OK? Not being treated like a permie by the consultancy or as a permie by the end client?

Coming up to renewal and I was sounded out by someone at the the end client about the possibility of contracting with them instead of through the consultancy. I'm one of only as couple of consultants with the consultancy, but there are a lot more with other consultancies on the project and with the client.

Right, starting to get complicated.... Firstly you need to read your contract. It will have a handcuff about going with the customers or client of consultancy. If you just switch who is paying you it's highly likely it's going to stick. It's highly likely the client will have an anti poaching agreement with the consultancy as well so it's always a difficult situation. Get the facts in the open first.

It would still be with an agency, however, mine are not on the PSL, so would not be able to go through them. I mentioned the handcuff clause (which after checking does include the end client as well as the consultancy), he said they'd look at working something out around that if needs be.

This makes no sense... Unless... You are Agency->Counsultancy-->End Client? So the client just wants to cut the Consultancy out the loop? You can see why they might not be happy with this.

So I was just wondering if anyone else had been in this situation? A couple of questions I'm not sure about:

We do get this a lot so try a couple of searches using consultancy handcuff as a search term using the method described in the FAQ but carrying on....

-As my agency do not have any relationship with the end client, is the handcuff clause still valid?

More than likey. It will cover your clients customers and the anti poaching agreement between agents and consultancy will mention it just to stop this kind of move.

-Are there any possible IR35 implications?

None barring the ones you've already probably got where constultancies like to make you look like a permie to their client and then the client treating you like a permie. It's a double whammy in this arragement. Either one treats you like a permie and you are stuffed. If you've got that covered then fine.

-Any other considerations?

24 month rule?

I'd be keen to know more about how the end client sees this relationship before considering IR35 implications. My feeling is it could be good or bad, depending on this.

Appreciate this may be a bit vague, but at the moment, there's a lot still to work out, I was only asked about it late last week and I don't think much will happen this week. I would guess the consultancy will extend me for January thus keeping the status quo while it's worked out.

It's a very complicated situation. You will most definitely have a valid handcuff somewhere. By going with the client via a different agency you've got not one but 2 different people out of pocket. Courts always favour the parties losing out and you've got 2!! Neither your agent nor your consultancy will be happy you disappearing. They only way you can really get this situation to work is to negotiate with the client and consultancy so they let you go without fuss. Many consultancies may give up some of their people when the client strong arms them but there is still business to be had. It's not good business to fall out over 1 contractor. Some consultancies won't see it like that though.

IMO this is totally out of your control. You are handcuffed. It's up to the client and consultancy to agree. Christ knows what the agency will say though. Very tough position you are in.

What's your Opt in/out status though? Can't remember exactly how useful this is but it's always asked.

[FrontEnder]

Ok. Your IR35 status OK? Not being treated like a permie by the consultancy or as a permie by the end client?

I think I'm good on IR35.

Right, starting to get complicated.... Firstly you need to read your contract. It will have a handcuff about going with the customers or client of consultancy. If you just switch who is paying you it's highly likely it's going to stick. It's highly likely the client will have an anti poaching agreement with the consultancy as well so it's always a difficult situation. Get the facts in the open first.

This makes no sense... Unless... You are Agency->Counsultancy-->End Client? So the client just wants to cut the Consultancy out the loop? You can see why they might not be happy with this.

That's right (I was clarifying that I wouldn't be going direct with the consultancy, but via one of their agencies). The guy gave the impression that the consultancy wouldn't mind in this case, but obviously that's only one half of the story.

More than likey. It will cover your clients customers and the anti poaching agreement between agents and consultancy will mention it just to stop this kind of move.

I've checked the contract and it does seem quite clear that the handcuff covers both consultancy and end client. I would guess that's the way the agency see it. No legal expert, but my thought was if the end client are unable to offer the role via my current agency (they aren't on the PSL and as it's an SC cleared gig, that would probably be difficult to bring them on board or bypass the PSL), would a clause like that stand up in court?

I haven't mentioned it to them yet, so will see how it pans out. The consultancy are a major client of the agency so would be in a good position to make sure they aren't an issues (as long as they are on board).

None barring the ones you've already probably got where constultancies like to make you look like a permie to their client and then the client treating you like a permie. It's a double whammy in this arragement. Either one treats you like a permie and you are stuffed. If you've got that covered then fine.

the end client certainly don't treat me like a permie, I don't really deal with them a lot and as I say, I'm confident I'm good with IR35.

24 month rule?

I had thought of this, but would be the same regardless of who I was contracted with, right?

It's a very complicated situation. You will most definitely have a valid handcuff somewhere. By going with the client via a different agency you've got not one but 2 different people out of pocket. Courts always favour the parties losing out and you've got 2!! Neither your agent nor your consultancy will be happy you disappearing. They only way you can really get this situation to work is to negotiate with the client and consultancy so they let you go without fuss. Many consultancies may give up some of their people when the client strong arms them but there is still business to be had. It's not good business to fall out over 1 contractor. Some consultancies won't see it like that though.

IMO this is totally out of your control. You are handcuffed. It's up to the client and consultancy to agree. Christ knows what the agency will say though. Very tough position you are in.

Yeah, I think this is probably correct. If (as the guy at the end client says) the consultancy are happy with this it changes things. I think I'll wait to see what happens. If I get an offer from my agency but with the end client, great. But if it looks like they're bypassing them, I'll trad very carefully as it's me who'll get screwed if the agency aren't happy!

What's your Opt in/out status though? Can't remember exactly how useful this is but it's always asked.

I'm not opted out, not sure what difference this will make.

[TheFaQQer]

I'm not opted out, not sure what difference this will make.

If you didn't opt out correctly, you can go direct after 8 weeks from the end (or 14 weeks from the start) of the contract and the agency can't charge anyone anything.

[FrontEnder]

If you didn't opt out correctly, you can go direct after 8 weeks from the end (or 14 weeks from the start) of the contract and the agency can't charge anyone anything.

interesting. Is the above "whatever is the latest of"?

[TheFaQQer]

interesting. Is the above "whatever is the latest of"?

Yes. It's one reason that agents hate you not opting out, because you can always bypass them after a reasonably short while. And they aren't allowed to charge the client any money either, so if they threaten that / if the client is worried about that, then they need not be.

[Sub]

Coming up to renewal and I was sounded out by someone at the the end client about the possibility of contracting with them instead of through the consultancy. I'm one of only as couple of consultants with the consultancy, but there are a lot more with other consultancies on the project and with the client.

It would still be with an agency, however, mine are not on the PSL, so would not be able to go through them. I mentioned the handcuff clause (which after checking does include the end client as well as the consultancy), he said they'd look at working something out around that if needs be.

I have been in same situation just recently. So there are two potential source of problems:

1. Consultancy will ask end-client for money for poaching a resource. That is completely out of your control, you can only relay that matter is too small for both. In case end-client is bigger than consultancy and there are many of them around - it is unlikely that consultancy start making any issues.

2. Your agency will ask money from you for breaching handcuff clause. That is likely to happen as from your scenario agency got no benefits from you leaving them. So you basically may try to get an agreement with the agency (it is all about money after all) or gamble and not inform them at all.

In my case agency handcuff clause was very poorly worded and hadn't covered end-client, just consultancy, so after taking legal advise I informed agency that I am going direct and we had no dispute about it.
So there are various sides of that (including IR35 & 24-month rule) and different options available, just make sure you get an official offer from client first and this is all worth an effort.

[FrontEnder]

Thanks for the replies everyone. Looks like the idea is dead in the water.

According to End client PM (who was who I spoke to in OP), the reasoning behind this was that the consultancy were "losing money on me", which is a little surprising, but appears to be why the consultancy were willing to do this.

So the consultancy had asked my agency if they could release me from the handcuff clause, which they said no to. Looks like they thought they would agree to it because they give them a lot of business.