Restrictive covenants (again, sorry!)

[ogreboy]

Hi.

I have been on a rolling 3-month contract now for 3 years with an agency. via my ltd company. I have opted-out from AR. The contract has the typical restriction:-

"The Supplier shall not and shall procure that its Staff shall not, for a period of
six months following the termination of the Assignment supply its services
directly, or through any other person, firm or company, to any Client for
whom it has carried out the Assignment at any time during the previous six
months".

The client has changed the timesheet approval process such that they are no longer "finally" approved on a weekly basis - instead they are approved on set "approval dates". These dates are not spread equally through the year, for example, 17/11/09, 15/12/09, 03/01/10, 22/02/10. Local management still authorise timesheets before sending to head office - but the client has told agency these auths are subject to change and payment of agency invoices against them cannot be guaranteed.

Yes - you read that right 03/01/10 -> 22/02/10. No timesheet approvals for nearly two months!

Now, here's the problem - other agencies at the client's site still pay WEEKLY against the local timesheet authorisations - presumably believing that the chances of head office interfering in local approvals is small. My agent won't accept this.

I am rapidly approaching renewal and fear that i cannot move to a more reasonable agency without my RC coming into play.

Anyone?

[Hex]

The contract looks reasonable I don't think you can change agents easily. Maybe you could consider shutting down your Ltd and starting another, that would probably get you out of it, but even then you may find the client has restrictions in their contract with the agent about signing you with another agency.

[northernladuk]

Maybe you could consider shutting down your Ltd and starting another, that would probably get you out of it

I can't see this working, you are a named resource. It says Supplier and Staff shall not.... I would think that even if you start a new ltd you are still a named resource/staff of the last company.

I can't believe for one minute anyone, the client or the agents, will let you hop. Your current agent would probably rather see you out of work before letting you go to a different guy and I would think the client would block it just to stop squabbles and fighting starting.

Can't see you have any choice unless you are very valuable or have niche skill..

[TheFaQQer]

I can't see this working, you are a named resource. It says Supplier and Staff shall not.... I would think that even if you start a new ltd you are still a named resource/staff of the last company.

Yes, but it says "The Supplier shall not and shall procure that its Staff shall not..." - if The Supplier is no longer in business, how can they procure what its Staff do?

I believe these types of restrictions are common place but I have never heard of any of them being invoked. At the end of the day they will have to follow a legal route to do anything about it and i would guess unless you have joined a direct competitor working on the same bid for massive piece of work doing exactly the same work I can't see them bothering.

I moved to 3 roles running that I shouldn't have done according to the restriction in my contract and no one batted an eyelid.

It depends on the agency, I guess. One agent told me that the clause was in there, but if I wanted to go direct, they wouldn't mind too much and it wouldn't hinder any working relationship I had with them. The client always wanted to use an agency, though.

[Pondlife]

Tell them you want to opt back into the Agency Regs.

Local approval is proof of work done and so they have to pay you.

Just my £0.02

[NotAllThere]

What does your contract with the agency say about payment terms?

Part of the rationale behind agencies' margins is the risk they take in not getting paid.

Second - are you really sure you are opted out... did you opt out before you had contact with the client?

[Not So Wise]

Local management still authorise timesheets before sending to head office - but the client has told agency these auths are subject to change and payment of agency invoices against them cannot be guaranteed.

You don't care.

Client (Local management) signing the timesheet is all that is needed for you to invoice unless contract specifically says otherwise. That the accounts department (head office) might quibble at a later date is standard in very industry out there but of zero concern for you and your B2B relationship with the agency

Basically agency are trying to get out of providing a factoring service because once accounts department sign off payment is probably made same day thus agency is never out of pocket and get paid for basically just pushing paperwork and transferring money with zero risk

Go back to your contract and re read it, specifically the clauses about payment terms. If it says monthly and that you just need a timesheet signed by client force agency to stick to terms

As to oped out status, see NotAllThere's post. Yet to meet a contractor who was really opted out, despite what they might think

[TheFaQQer]

Tell them you want to opt back into the Agency Regs.

Local approval is proof of work done and so they have to pay you.

Just my £0.02

You can opt in at any time, but IIRC that only take effect for any future contracts / clients through the agency.

[Pondlife]

You can opt in at any time, but IIRC that only take effect for any future contracts / clients through the agency.

I think you can opt in at renewal even if previously opted out for that client.

[ogreboy]

"Go back to your contract and re read it, specifically the clauses about payment terms. If it says monthly and that you just need a timesheet signed by client force agency to stick to terms"

1. Upon completion of the Assignment or as may be agreed and specified in the Schedule attached or at the end of each month of the Assignment the Supplier shall deliver to the Company its invoice for the amount due from the Company to the Supplier giving a detailed breakdown showing the work performed and the time spent by the Supplier. The Company shall pay the Supplier each month for all hours worked regardless of whether the Company has received payment from the Client for those hours. The invoice must be received by the Company by no later than the 7th calendar day of the month following the month to which it relates. The Supplier s invoice should bear the Supplier's name, company registration number, VAT number and should state any VAT due on the invoice.

2. The Supplier shall obtain the signature or other confirmation of an authorised representative of the Client as verification of execution of the Assignment or such confirmation as the Client may require from time to time. The Company shall obtain a purchase order or other confirmation from the Client as verification of authorisation of the Assignment.

3. The Company shall not be obliged to pay any fees to the Supplier unless the Supplier in accordance with sub-clause 6.1 of this Agreement has properly
submitted an invoice and until such person authorised by the Company to do
so has verified the execution of that part of the Assignment to which the
invoice relates, and the Supplier has input details of the worked performed on
any Customer s work recording systems as requested.

The agency are insisting they are keeping within the terms of the contract and my very expensive solicitor thought that proving otherwise would be an expensive and length process.