Agency in Breach of Contract ?

[sascc]

This is my first post and quite different in that I had a clause which prevented me from working directly for my last client (within a 12 month period) actually removed from my contract. This clause was contained within a 'Restrictions' section in my contract:-

'The Service Provider and its directors undertake that they shall not and that they shall procure that the Consultant(s) shall not enter into any agreement, whether directly or indirectly, to supply services of a similar nature to the Client or a subsidiary or associated company of the Client or to the Client's clients, other than through the Company for a period of 12 months following termination of the Agreement.

Also contained in this section was the following clause:-

''The Service Provider acknowledges that should the Client or a third party to whom it has introduced the Service Provider's services wish to utilise the Service Provider's services other than through the Company, then the Company may be able to charge the Client a fee or agree an extension of the Supply with the Client'

Anyway, I disputed these clauses right from the moment my contract was received quoting 'restriction of trade'! Eventually the Pimp agreed to amend my contract and I recived an updated contract to which an 'Amendment' had been added stating that the 'Restrictions' section 'Does not Apply'. Great I thought - I am free of the Pimp. I have since gone back to the Client site and they have informed me that the Pimp is asking for my daily rate x 3 months as a fee. Surely they are in breach of contract? Any views??

[Inside Agent]

The agency have made a commercial agreement with you not to force any action in respect of you working direct for the client.

What they will probably have in place is an agreed transfer fee with the client, generally these are set quite high to make it uneconomic for the clients to take you direct in the first year so they can recoup their investment.

In answer to your question they will not be in breach of the EAA or their contract with your Service Provider.

[thunderlizard]

You should work with the client in getting legal advice on what you can do.

Your company does have the right to trade freely, but there is probably another contract between the agent and the client, which contains a clause to protect the agency's business. It will be one right versus another.

[tim123]

Did you opt in or out of the regs?

The transfer fee may be uneforcable if you opted in (which is the default position if you did nothing)

(Note to pedants, I said "may be uneforcable")

tim

[Inside Agent]

The Agency regs only prevent the Employment Business restricting the Service Provider save where the contractor has opted out. Depending on the time the OP has been under contract there may be a transfer fee due from the client to the agency.

[hugebrain]

(Note to pedants, I said "may be uneforcable")

Not fair pointing out your own mistakes!

A. Pedant.

[tim123]

Not fair pointing out your own mistakes!

A. Pedant.

I made no mistake.

I was merely pre-empting someone assuming something that I didn't write.

tim

[hugebrain]

I made no mistake.

Are you sure?

uneforcable

[tim123]

The Agency regs only prevent the Employment Business restricting the Service Provider save where the contractor has opted out. .

What prosaic language.

I've no idea what you are trying to say, but the regs restrict the rights of the Employment Agency from charging a transfer fee, unless the contractor is a Limited company and both they and their company explicitly opt out.

And once again, they only place a restriction on what contractual clauses must accompany transfer charges, they don't forbid them.

However, any contract which does not comply, re the inclusion of these terms will have the clause to charge a fee voided, not amended to include the terms. Experience tells me that not many EA's are good at making sure that their T&Cs comply with the required regs.

tim

[Inside Agent]

What prosaic language.

I've no idea what you are trying to say, but the regs restrict the rights of the Employment Agency from charging a transfer fee, unless the contractor is a Limited company and both they and their company explicitly opt out.

And once again, they only place a restriction on what contractual clauses must accompany transfer charges, they don't forbid them.

However, any contract which does not comply, re the inclusion of these terms will have the clause to charge a fee voided, not amended to include the terms. Experience tells me that not many EA's are good at making sure that their T&Cs comply with the required regs.

tim

You will also note I said 'may'

Section 10 of the EAA tells you most of what you need to know.