Going Direct - Agency wont cut its margin...

[Dante]

Hi Guys,

Just a quick one - i've done 2 x 1 year stints at a particular client through one agency - never having received a rate rise, despite asking a number of times.

Now, the client wants to cut the cost of my contract as it's prepared to offer a 6 monther and wants a discount, but my agency wont take the hit.

Now - for arguments sake - i'm on 130 rupees a day, and the client pays the agent 175 - in reality they have about a 12% margin.

If they say that they cant afford to do it any lower due to their overheads - where do i stand regarding any clauses in my contract? SUrely if they cant go that low, but I can - they can;t restrict me from working? It's not like they didnt have the chance to continue the business?

For what its worth i've not actually signed my contract with the clause in it, but the client may well have signed his with the agency (would it have the same clause in it?).

Cheers,

Dante

[The Agents View]

If you're opted in, then you can probably transfer, fee free.

If you're not, you're contracted to the agency, and will more than likely have a restriction clause of 3-6 months.

It doesn't affect you really - an agency would sue the client, not your limited company - in theory at least.
This may put you off - the clauses can't really be enforced on the contractor, but they really can be against a client - I've seen a well known company in Norwich have to pay out about £80,000 for trying to do this.

12% is a low margin already IMO - so you'll not get too much room in that I suspect.

And in the defence of the agency - they're not stopping you working - you could reduce your rate slightly as a token gesture, and still be there.

Moaning about no increase in 2 years will fall on deaf ears on here because:

a) after 2 years - you're pretty much a permie
anyway.
b) There are people queuing up who could do your
job, for less money in this climate.

If you can afford to walk, and have another job - do it - if you can't, then work with the agency and the client to work out a way you can stay.

[Dante]

Thanks for the reply.

Can you remind me regarding the opt-in/out? How can i check this either way.

It's been 2 x 1 year stints - separated by a year - so not really permie material yet - also on two different projects in two different departments.

I'm not willing to drop my rate as I think its low enough for the role - i have some unique skills and domain knowledge and they wont be able to get anyone as good as me for the money. I only do it as it is because its so close to home.

My Mrs earns good money and has just signed a long contract so i'm not worried about finding another job.

The client has already told me that they wont be using the agency again, as they have a new one for all new hires. Therefore if they lose me, they lose any potential foot in the door with the client.

It seems that if i walk, everyone loses and its ridiculous.

Cheers

Dante

[JaredM]

Can you remind me regarding the opt-in/out? How can i check this either way.

If you haven't explicitly opted-out then you are likely in - I don't think you can be opted-out by a clause in your general contract terms. If you do happen to be opted-out I believe you can decide to opt-in at any time.

[PinkPoshRat]

You can indeed opt in/out whenever you fancy

[TheFaQQer]

You can indeed opt in/out whenever you fancy

I thought that if you were out, you could opt in - but it would only take affect for any subsequent contracts, not the one you are in.

If you are in and want to go direct, you need to have a short break - can't remember the exact duration that there needs to be. It's in the regulations though so should be easy enough to spot - or search for.