Would you forfeit 20% of your contract value?

[Xenophon]

Will your old agency find out? If they do, will they pursue your Ltd for the 20%? If this is a certainty, then negotiate with them in advance - they are going to get 0% as things stand, so they may be flexible.

Depending upon the wording of the existing / old contract, can you form a new Ltd, use that instead?

I have heard of people doing the form a new ltd approah to get around this in the past. Seems like a bit of a dodge, but it is an option, if a bit risky. I don't favor that at the mo.

[Xenophon]

pcg are ******* useless. They should be taking this up as an ideal test case. But will they?

I wont hold my breath.

TBH, I'd take the role and **** the old agent off. Since they have failed to retain a place on the clients PSL, I dont see how they can make their clause stick.

Indeed.

I'm in the process of trying to find out if the fact that the current agency have lost the ability to provide contractors to the client makes a difference.

[Xenophon]

Are you the worrying type ? If not then I would think you'd get away with not coughing up, but may have to take a bit of flak in the process.

I don't really know, but would think there is some legal argument around restraint of trade when your current agent is effectively the one breaking the relationship. ie. they are not offering you more work with the client.

The PCG Helpline is so so for contractor specific stuff like this. I approached PCG directly with a different legal matter and managed to speak to somebody better qualified in the world of contracting.

ps. send a letter/email to the existing agent saying you are more than happy to continue at the client if they can provide the work

If I'm honest, I can be a bit of a worrier. Also, the current agency are well aware of the situation. There are a couple of hundred contractors involved so the potentical income for the old agency is massive. Couple that with the fact that the cessation of their contract with the end client may have been acrimonious...

As I understand the position, the old agency are off the PSL, so no chance of continuing via them.

[Xenophon]

So what happens to your current contract? Has it come to an end? Or is it being terminated?

Ends 18/12. New one with new agency starts next year. If I accept.

At this point I would contact my current agent and say "sort this out". It is not for the client to impose an agency.

Letter written. Phone calls made.

Fair enough (not as fair as 6 months, but still.)

I really, really do not feel you should be taking a hit on this at all. It is not your doing.

Is it f**k. It is a client-agency issue caused by the client.

I would have thought the solution to aim for would be:

- client continues paying same rate;
- new agency takes 4% as you are already on the client site;
- old agency becomes the supplier to new agency instead of the client;
- old agency continues to pay you your current rate;
- old agency gets the remaining margin.

That way old agency is getting something, new agency gets no more than they deserve and neither you nor client are affected.

There is no way you should be losing out - that is you being shafted by the client to pay their new agency something for nothing. What happens when they change their PSL again in another 3 months?

I know, RC. Such is life. I do see the point you make about this re-ocurring as and when ther client changes their PSL in the future.

Cheers muchly for your help.

[Xenophon]

Read the contract extremely carefully; if it really does only mention your limited company by name and doesn't mention you personally, then just start a new company and use it for the duration of the new contract.

Yup. This is what I hear has been done in ther past. Contract is between agency and my ltd co.

[Not So Wise]

Is it really that simple? I know there is a 6 or 8 week max under the regs but I though it had to be an actual break in working.

Nothing in life is simple.

Basically the clause is null and void (if opted in), there is no way they can hold him to 12 months but then things get dodgy as it's down to an individual judge if it went to court

He could either declare there can be no restriction of trade or he could fall back to the agency reg's rules which limit it to weeks (most likely)

But basically main point is, no matter what, if he has not opted out or not properly opted out agency is only entitled to claim weeks that the rules allow, not the whole 12 month period

[Xenophon]

*sigh* Feel like and old record *sigh*



Did you properly opt out of agency regulations (signing a piece of paper saying you opt is not enough unless it is done at at the right time), because unless you did (unlikely) that clause is either partially or totally null and void

For the rest see RC's post

Not So Wise by name, Not So Wise by nature.

No need to sigh. You're not talking to an inexperienced contractor here. I know all about Employment Regs and the fact that if you opt-in this clause is void.

I, like a true contractor, opted-out.



Just a (rare) post from me outside of General to see what the experiences have been on this topic from others. Trust me, I'm not looking for your advice.

[Xenophon]

This isn't meant as patronising, but have you asked your current agency if they will let you transfer to the new agency for gratis? You're not the guilty party in this and they have nothing to gain from forcing you to walk. And they might be glad to be shot of the client.

Oui. Awaiting response from old agency. Rumour is that they will enforce the clause if contractors sign with the new agency.

[rootsnall]

Oui. Awaiting response from old agency. Rumour is that they will enforce the clause if contractors sign with the new agency.

If you were a one off via the agent then I don't see a problem ie. it wouldn't be worth them pursuing it. If they are losing a huge chunk of their business then they will pursue it in some form or other. I can't believe the client have not addressed the issue, but then again maybe I can. Ring the PCG and explain that you need better advice than the catch all helpline, it worked for me. I'm sure you won't get a clear cut answer but maybe you'll be better informed. Ask them about the switching Ltd option, it's easy to do, if it will help, but you'd have to clear out your exisiting Ltd asap and I'm not sure how that would be viewed legally. One option is to accept the possibility of a 20% loss and take your chance. I know in my game the real cut throat market rate is more than 20% down on the rate of a year or so back, so it may infact make sense anyway. If they do send you a bill ( and others involved ) and you don't pay then they'd still have to go to court for each individual Ltd involved, some will bottle it and the agency might settle for that.

ps. in a previous agency squabble I got a look at the client-agent contract and there should be some sort of buy out clause in there that will decrease depending on how long you've been there. If you've been there a good while you may find this is down to 3 months commission. Worth a try. The client will be the more likely recipient of a court case if there are large numbers involved. You may just be a way of applying pressure to come to some sort of settlement direct from the client.

[ASB]

Oui. Awaiting response from old agency. Rumour is that they will enforce the clause if contractors sign with the new agency.

Xenophon,

I think there is actually more than one issue (in terms of you/agency).

1) Is this is a restraint of trade?

Well, in this case, to restate; the court will only allow what is reasonable, it will generally be very reluctant to allow any restraint where it impinges on somebody's ability to earn a living. On the face of it you could be in that position. You could try and argue that the agency has no legitimate business interest to protect and therefore there is no loss anyway. [The agency may well argue that their relationship has been severed simply to get agency 'b' in to take over everybody more cheaply and as such they do still have a legitimate commercial interest]

2) Is this a penalty clause?

It does look like it could be. It is specific. Generally abstract penalty's are not allowed. They have to be based on some measure of loss that is actually quantifiable, however specific penalties - like this - often are enforceable. i.e their argument may be that there is in fact no restraint, it is simply a contractual penalty should you choose to take that option. I guess you could try a force majeure argument against this, in essence that the action was necessitate by circumstance over which you had no control. http://en.wikipedia.org/wiki/Force_majeure

You said there were a couple of hundred involved. In this case, with a load of wild assumption you are looking at a substantial sum of lost revenue to the agency.

It is unlikely they will just take it lying down.