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    Nervous Newbie


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    Default Escape agency contract for new contract with same Client

    I have operated as Ltd Co. for four years always through agencies without any issues. I am currently 10 months into my current contract via a consultancy who always work as an agency. I have had no contact with them during my assignment apart from initial phone conversation to set up meetings and the odd emails regarding invoicing. Recently I have found out that the agency has been sharing my invoice information with a colleague (who is also contracted through them) and also increased their charges to the client without me seeing any benefit.

    The client has approached me about starting on a new assignment: different project/location/rate etc, and I'm keen to do this direct and not use the agency. Whether or not I will continue to have input into my current assignment on a part-time basis is tbd.

    The applicable clause in my contract with agency reads as follows: "The Consultant agrees that for a period of one year after the Operative(s) has (have) completed the Assignment under this Agreement, the Consultant will not undertake work direct for the Client or any subsidiary company of the Client in conflict with the interests of the Company." It may be worth noting that my contract has no end date and does not read specific to an assignment (learning curve!) although it was accepted that I was taken on for a specific project.

    I see my options as follows: 1. Set up another Ltd Co (not ideal), 2. Work via an Umbrella Co (no experience of this), 3. Continue to do a limited number of hours on current assignment so that it has not 'completed', 4. Argue with agency that I am not happy with service or professionalism and the clause will limit my potential to earn?

    I would appreciate views from anyone with greater knowledge or experience..? Thankyou

  2. #2

    Respect my authoritah!

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    If it came to court, then one year exclusion would probably be considered too long. The clause "in conflict with the interests of the Company" is could also be a weakness.

    Note though - I'm using "probably", "could be", because little is certain. If you take the new contract and the agency/consultancy takes legal action against you and/or the client, then if it goes to court a judge will decide if the handcuff clause is reasonable. The fact is, the client is unlikely to want to take the risk - it depends on their relationship with the agency/consultancy. Some clients are big enough they can just tell them to suck it up.

    If the consultancy/agency has been sharing confidential information that it should not have been, you probably have a case under the Data Protection Act. This is a separate issue.
    Fact check: Mostly false

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  3. #3

    Godlike


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    Quote Originally Posted by NotAllThere View Post
    If it came to court, then one year exclusion would probably be considered too long. The clause "in conflict with the interests of the Company" is could also be a weakness.

    Note though - I'm using "probably", "could be", because little is certain. If you take the new contract and the agency/consultancy takes legal action against you and/or the client, then if it goes to court a judge will decide if the handcuff clause is reasonable. The fact is, the client is unlikely to want to take the risk - it depends on their relationship with the agency/consultancy. Some clients are big enough they can just tell them to suck it up.

    If the consultancy/agency has been sharing confidential information that it should not have been, you probably have a case under the Data Protection Act. This is a separate issue.
    This, if the client is not prepared to negotiate you out, then you have nothing.
    I have been in a similar situation a couple of times, but as the client spent such big ££££, the consultancy and on another occasion the agency just waived it through.

    Best way, everyone's happy and you can forget all about the legal BS.

  4. #4

    Fingers like lightning

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    Quote Originally Posted by NotAllThere View Post
    If it came to court, then one year exclusion would probably be considered too long.
    A one year restriction is very enforceable.

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    My post count is Majestic

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    A couple of things don't seem right in your opening post and if you are going to get in to handcuff fights with agents you need to be absolutely sure and correct.

    Quote Originally Posted by PlanContractor84 View Post
    I have operated as Ltd Co. for four years always through agencies without any issues. I am currently 10 months into my current contract via a consultancy who always work as an agency. I have had no contact with them during my assignment apart from initial phone conversation to set up meetings and the odd emails regarding invoicing. Recently I have found out that the agency has been sharing my invoice information with a colleague (who is also contracted through them) and also increased their charges to the client without me seeing any benefit.
    This is normal for agencies and the charges to the client are non of your business. Annoying but none of your business. You could try and cause a stink at renewals having a bit of insider info and push for a better rate but they will probably say no. Don't be thinking what the agent's business between them and the client is anything to do with you.

    The client has approached me about starting on a new assignment: different project/location/rate etc, and I'm keen to do this direct and not use the agency. Whether or not I will continue to have input into my current assignment on a part-time basis is tbd.
    Why are you keen to do it direct? It's not a given you'll get the same rate the agency does. They supply a service for which they take a cut. Why would the client pay you the same when they have to take on the burden of the paperwork? It can happen but don't expect it.

    I'd be very careful about input in to your previous assignment. This could very easily end up looking like D&C and from there you becoming part and parcel. The longer your contract continues the more likely this is to happen. Whatever happens with the agency you need to be very careful going forward.

    The applicable clause in my contract with agency reads as follows: "The Consultant agrees that for a period of one year after the Operative(s) has (have) completed the Assignment under this Agreement, the Consultant will not undertake work direct for the Client or any subsidiary company of the Client in conflict with the interests of the Company." It may be worth noting that my contract has no end date and does not read specific to an assignment (learning curve!) although it was accepted that I was taken on for a specific project.
    Now things are taking a turn for the worse. No end date, no specific deliverables, asking to do extra work? How can HMRC not think you are a permie? I'd say you are in the doo doo. I already aluded to IR35 before I read this and it's just got a whole lot worse. I am struggling to see how you can be outside at this point. I seriously hope you've got insurance cause you are gonna have your pants pulled down here.

    Check out option 3 in this article.
    http://www.contractorcalculator.co.uk/failing_ir35.aspx

    12 months is generally considered too long for a handcuff but that's only going to stand up in court. 99.9% of time it won't get there. There will be handbags between the three of you normally resulting in the client or you backing off as it's too expensive to go to court. The agent would have a slam dunk case otherwise.

    I see my options as follows: 1. Set up another Ltd Co (not ideal),
    Won't work. You can't escape obligations like this hiding behind paperwork. They can identify you as an individual in cases like this.
    2. Work via an Umbrella Co (no experience of this),
    Where I thought this was a crap idea at first I think your IR35 status makes this a pretty good option.
    3. Continue to do a limited number of hours on current assignment so that it has not 'completed',
    You are still inside IR35. Something needs to change and fast.
    4. Argue with agency that I am not happy with service or professionalism and the clause will limit my potential to earn?
    LOL... everyone will laugh you out the building.

    I would appreciate views from anyone with greater knowledge or experience..? Thankyou
    You are welcome.
    Last edited by northernladuk; 16th March 2017 at 08:55.
    'CUK forum personality of 2011' - Winner - Yes really!!!!

  6. #6

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    Quote Originally Posted by Andy Hallett View Post
    A one year restriction is very enforceable.
    It could be in specific cases. I'm not sure an agent trying to protect their revenue stream when dealing with short term gigs would be one of them if it went to court. Devil is in the details really I would have thought?
    'CUK forum personality of 2011' - Winner - Yes really!!!!

  7. #7

    Respect my authoritah!

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    Quote Originally Posted by Andy Hallett View Post
    A one year restriction is very enforceable.
    Well, you would say that!

    Quote Originally Posted by northernladuk View Post
    It could be in specific cases. I'm not sure an agent trying to protect their revenue stream when dealing with short term gigs would be one of them if it went to court. Devil is in the details really I would have thought?
    Probably enforceable on the client, probably not on the contractor - at least according to discussions held on this and other forums over the past 15 years. IANAL; but then Andy isn't either. (Or is he? )
    Fact check: Mostly false

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  8. #8

    I live on CUK

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    Quote Originally Posted by Andy Hallett View Post
    A one year restriction is very enforceable.
    It depends...

    I've had a contract with no handcuff clause simply due to the large size of the client.

    I know other people who when there were attempts to enforce their clause they failed due to the role they did, the wording, length of restriction and/or size of the client.
    "You’re just a bad memory who doesn’t know when to go away" JR

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    If there is anything in the contract about breaching data confidentiality then in theory you could call time on the contract because they are in breach.
    The greatest trick the devil ever pulled was convincing the world that he didn't exist

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