Negotiating restriction / handcuff clause

**Contreras** · 13 June 2015, 18:38

Originally posted by Devinity View Post

Hi all, first post

I've been sent through a contract from an agent for a rapidly approaching contract (starts Tuesday). This includes both an opt-out form and the contract itself. According to the covering email we had previously discussed about me opting out, which is news to me

I've been reading up on opting-out and contract restrictions, thoroughly searching the forum! But I'm still wondering how to play this.

In the interest of turning the contract around, I don't currently have a problem with opting-out, especially as the contract is quite clear in its payment terms. I'm also currently with an umbrella, FWIW.

The contract is only for 6 weeks and they've included a 12-month handcuff clause, which seems unreasonably long to me. My first approach would be to request that this is 3 months, though I would be willing to renegotiate if the contract was extended, though only to a maximum of 6 months.

Does the contract also state that certain clauses (handcuff, etc.) only apply if the contractor is opted-out? All mine have had this and assuming that is also the case here then I would:

- Sign and return the contract
- Neglect to return the opt-opt form
- Turn up on site on Tuesday

Up until the start date you are "still thinking about it" or "must have missed that bit". There will be a certain amount of wailing and eventually once on-site and billing, probably, they will give up asking.

Originally posted by Devinity View Post

However, will the agency likely have a similar restriction in the contract they have with the client, that I am not privy to? Is it pointless for me to go down the route of negotiating this, if the client is happily signing a contract with a 12-month restriction between them and the agency in regards to hiring me again?

That is a fair point - personally I wouldn't bother for exactly the point you raise and because how it would be handled/ignored in practice would be as much about client attitude as what the contract says.

You say the contract is clear in its payment terms. Does it withhold payment, absolutely, without an authorised timesheet? Does it withhold payment until the client has paid? People have had a problem with these in the past and particularly via an Umbrella it can be a royal pain to resolve.

You are no doubt aware that not opting out affords some protection against the above restrictions, or at least gives the agency one less excuse.

**Devinity** · 13 June 2015, 18:51

By clear, I mean that it simply requires an authorised timesheet + invoice from me / umbrella for payment to be made. There is no stated requirement for the client to have paid (which I took to the be important part from remaining opted-in).

**Devinity** · 13 June 2015, 18:57

Whilst the main contract doesn't tie any of the clauses to the opted-out status, it does state in a one-liner that I have agreed to opt-out and have signed an agreement to that effect.

**mudskipper** · 13 June 2015, 19:23

It is worth getting your contract professionally reviewed. I had a 6 week contract, which looked fine to my inexpert eye, so didn't bother. Three and half years and 7 renewals later, I really wish I had - not that anything has bitten me in terms of day to day operation, but from an IR35 point of view I'd like it to be watertight.

**jmo21** · 14 June 2015, 08:33

Originally posted by Contreras View Post

Does the contract also state that certain clauses (handcuff, etc.) only apply if the contractor is opted-out? All mine have had this and assuming that is also the case here then I would:

- Sign and return the contract
- Neglect to return the opt-opt form
- Turn up on site on Tuesday

Up until the start date you are "still thinking about it" or "must have missed that bit". There will be a certain amount of wailing and eventually once on-site and billing, probably, they will give up asking.

That is a fair point - personally I wouldn't bother for exactly the point you raise and because how it would be handled/ignored in practice would be as much about client attitude as what the contract says.

You say the contract is clear in its payment terms. Does it withhold payment, absolutely, without an authorised timesheet? Does it withhold payment until the client has paid? People have had a problem with these in the past and particularly via an Umbrella it can be a royal pain to resolve.

You are no doubt aware that not opting out affords some protection against the above restrictions, or at least gives the agency one less excuse.

The agent will just say you are not to turn up on site until it is signed

**Contreras** · 14 June 2015, 11:33

Originally posted by jmo21 View Post

The agent will just say you are not to turn up on site until it is signed

Yes they could, but if it was so critical you would think that it would have been insisted upon sooner.

If the OP has managed to avoid any debate about the opt-out so far (the best tactic IMHO) then I suggest it's not something the agent is going to risk the deal upon at this late stage.

The fly in the ointment in this case is the contract itself stipulates acceptance of the opt-out.

Personally I would be more focussed on payment terms than the handcuff.

IR35 should be a moot point as the OP is going via umbrella.

**northernladuk** · 14 June 2015, 11:37

Not sure why you are so worried about the handcuff. So few of them are enforceable. Even if you got it down to the minimum the client won't wait for you anyway TBH.

For a handcuff to be enforceable it has to fair and reasonable. This means the agent has to directly lose money for it to stand up. Going back to the client in another role that the agent isn't representing means the clause won't stand.

I'd do more reading in to handcuffs than bugger around with opt in/out statements and actually understand what they entail and their limitations.

**SueEllen** · 14 June 2015, 12:38

12 month handcuff clause is unreasonable unless your skills and knowledge are so unique someone could possible know the few other people in the country/Europe/world with them.

If you start negotiating about it you could end up with one that can be enforced.

If you get your contract reviewed by someone who understands and is qualified in contract law not just IR35 issues they will ask for it to be removed as it's their job. You could end up in a worse situation legally if they don't.

Anyway it's more important to find out what type of end-client you have when it comes to these sort of issues. Some will tell agents where to go, while others will run scared. I always try to get the end-client contact details so when agencies try these tricks I can ask them directly.

**Antman** · 14 June 2015, 13:18

Originally posted by SueEllen View Post

12 month handcuff clause is unreasonable unless your skills and knowledge are so unique someone could possible know the few other people in the country/Europe/world with them.

If you start negotiating about it you could end up with one that can be enforced.

If you get your contract reviewed by someone who understands and is qualified in contract law not just IR35 issues they will ask for it to be removed as it's their job. You could end up in a worse situation legally if they don't.

Anyway it's more important to find out what type of end-client you have when it comes to these sort of issues. Some will tell agents where to go, while others will run scared. I always try to get the end-client contact details so when agencies try these tricks I can ask them directly.

My thoughts too.

Negotiating restriction / handcuff clause