Enforcement of Contract Restriction clause

[dagenheis]

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Neither the Contractor nor the Worker shall directly or indirectly supply its services within twelve months of the
conclusion of any Assignment to any Client, subsidiary or third party to whom the Worker has been assigned by the Client, in respect of which an Assignment has been undertaken.

"The Client" - means the person, firm or corporate body requiring the services of the Contractor.
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Hi,
I have the restriction clause as above in the contract. Do you think, it will apply if I go direct with the client at the time of renewal. The agency never found me but we brought them in for payroll purposes. Now its a pain dealing with them.

Can the above restriction clause be enforced by law?

Ta,

[SueEllen]

1. If you knew the client before you used the agency then you are opted-in to The conduct of employment agency and employment business regulations regardless of what the agency says.

2. I suggest you do a read up on what that means use the search button.

3. Next time when you get a contract read it and if you know the client before the agency gets involved tell the agency to remove all clauses that state you cannot go direct or are a restrain of trade. If you get on well with the client get the client to tell the agency all these clauses must be removed from your contract as well.

[Wobblyheed]

You signed the contract knowin the clause was there and now want to get out of it. Hmmmm

[dagenheis]

1. If you knew the client before you used the agency then you are opted-in to The conduct of employment agency and employment business regulations regardless of what the agency says.

2. I suggest you do a read up on what that means use the search button.

3. Next time when you get a contract read it and if you know the client before the agency gets involved tell the agency to remove all clauses that state you cannot go direct or are a restrain of trade. If you get on well with the client get the client to tell the agency all these clauses must be removed from your contract as well.

SueEllen - I already started doing it after I posted this thread. Thanks for a good tip again :-).

In summary, here is understanding:

The employment agency and employment business regulations outlines a regulation that prevents agencies to include restrictive clauses or take detrimental action if I decide to work for the client, directly or through a competing business. I am only covered by this clause if I am opted in.

As for 'opt-out', it is up to the contractors to decide whether, or not, they want to opt out. And the 'opt out' notice must be completed before they are introduced to the client. So I am opted in anyway. Also, I specifically told them in the past that I don't want to opt-out. So they can't put this clause at the first place.

Now that's how i understand it but I am happy to be corrected otherwise.


I know I signed the contract but I did not know at that stage that it's not according to the regulations. Now it explains that why the agencies are adamant to sign the opt-out form. I was previously told that this opt-out is to enable us to work more than 37.5 hours a week. Anyways, we come across this on regular basis where we are asked to sign other so called 'standard' agreements, tenancy, banks etc.

[SueEllen]

As for 'opt-out', it is up to the contractors to decide whether, or not, they want to opt out. And the 'opt out' notice must be completed before they are introduced to the client. So I am opted in anyway. Also, I specifically told them in the past that I don't want to opt-out. So they can't put this clause at the first place.

The opt-out in your case hasn't been done legally as it has to be done before you are introduced or supplied to the client. The client already knew who you were.

So find yourself a solicitor (do a search on these forums for one that understands the in and outs of it) and also find out (again do a search) when are opted-in contractors can legally work for end-clients directly with no restrictions.

Once you have done that discuss with your end-client when you are legally available to work for them, and then start work for them then.

If the agency then hassles you get the solicitor you found (make sure you have a quick word with them over the phone about your situation before starting to work for the client) to write the agency a letter. Yes you will have to pay the solicitor but it will be less hassle and cheaper than having to fight the agency later.

[dagenheis]

The opt-out in your case hasn't been done legally as it has to be done before you are introduced or supplied to the client. The client already knew who you were.

Just a quick clarification, the opt-out notice has not been done because I declined to opt-out. I have a written confirmation that I have chosen to opt-in.

I will search regarding the period I need to wait before I can work directly for the client, but I don't remember seeing any such period in the Employment agencies regulations. It just says that the employers can't prevent you from working directly unless you are opted-out.

[Wanderer]

Can the above restriction clause be enforced by law?

In a word, no.

You refused to opt out of the agency regulations so that clause is unenforceable and would most likely be struck out if challenged in court. Just proceed as if it wasn't there and go direct with your client or through another agency if you choose. Most likely the agency will say nothing because they are bang to rights, but given their record of lying to you (eg about the nature of the opt-out) the scumbags may try to pull the wool over your eyes here. Don't stand for it.

You could get a legal opinion on this which would carry more weight but I think it would just cost you money to tell you something that you already know.

If the agent makes a fuss then politely but firmly point out the following and tell them to refer you to their solicitors if they want to argue the point further.

1. You didn't opt out so the clause is invalid
2. You were already introduced to and had negotiated a contract with the client and the agency were only brought in to factor the payments. Therefore this clause is an illegal restraint of trade.

It may be different if the agency had introduced you to the client AND you had opted out before you were introduced but neither of these things happened.

Good to see that you didn't taken in by their opt out request, but you need to read your contracts more carefully in future or you will get bitten.

[SueEllen]

As wanderer said if you didn't opt-out then you can ignore the clause completely.

If the agency challenges you, find a solicitor (search on here for names) to write them a letter telling them to basically go away.

Once you have done that if the agency are a member of REC make a complaint. It costs you nothing but a bit of time and hopefully help stop the agency acting so stupidly in the future.

If you are opted-in you have to wait 8 weeks after your last working day before you can go direct.

The PCG has all this information.

[TykeMerc]

Opted IN plus the agent can't claim that they invested any time or effort into sourcing you, plus opinion is heavily in favour of exclusion clauses of over 6 months are not viewed as reasonable by judges all amounts to the agency not having any real ground to stand on if it came to a fight.

In your situation I would happily dump the agent if the client is on board with that and then deal with agency threats as bluff and nonsense.