What If Agency Doesn't Agree to Amend the Contract?

[Dynamic]

Nope.

Now you are stuck in a situation where because you are on-site the agent doesn't have to negotiate.

The only things we agreed before going on-site were the rate, location and the contract duration.

I went on-site based on the 3 things we agreed as mentioned above, it can't mean that I've agreed to whatever terms will be given to me in the future! I don't understand your logic I'm afraid?

I understand that their position now is stronger to negotiate as I'm risking not getting paid at all if I don't sign their contract.

I can ask the client directly to push the agent to sort this issue out so the agency risks troubling their relationship with the client if doesn't amend it.

[cojak]

My contract is with the agency not the client. The client has already signed my weekly timesheets and have sent them to the agency to be paid.

When you're given a job offer; would you just accept whatever contract is given to you immediately or you'll get it checked against IR35, etc?!

You sound like you just sign whatever is given to you! don't think that's the best practice, is it?

You do get it checked but if the agency refuses to change it despite negotiating, you don't start in the hope that they will change their minds - you don't start at all.

And if you don't understand the logic, I suggest a call to Qdos or Bauer & Cottrell, they'll explain it.

[Dynamic]

I see what you mean.

so assuming you have had 5 contracts, 2 of which were inside IR35 and the last 3 were outside. in the worst case scenario, you'll have to pay full tax on the income earned on the first 2 contracts not the last 3 ones; right? or you're doomed to pay full tax forever?!

I can just sign the contract and look for a new one at the same time; once I'm offered a new one and sorted out the contract, I can give my notice as I only have a day notice. then will have to pay full tax on the 2-3 weeks that I had worked in the worst case?

Thanks,

[SueEllen]

The only things we agreed before going on-site were the rate, location and the contract duration.

I went on-site based on the 3 things we agreed as mentioned above, it can't mean that I've agreed to whatever terms will be given to me in the future! I don't understand your logic I'm afraid?

It doesn't work like that.

I understand that their position now is stronger to negotiate as I'm risking not getting paid at all if I don't sign their contract.

They can pay you and actually don't have a legal excuse not to.

You have a excuse not to put in your timesheets and invoices so you don't get paid, even then it won't help if there is a dispute.

Unfortunately in English contract law while both parties may have the intention of having a written contract signed by both parties if neither of you sign it but both parties actions show they are going along with the contract, then if there is a dispute the unsigned contract will be used to sort out a dispute.

You need to remember contracts in England can be shown to be agreed by your actions as well as being verbal or written.

I can ask the client directly to push the agent to sort this issue out so the agency risks troubling their relationship with the client if doesn't amend it.

There is no reason for the client to care about your tax position.

There are other things that the client may care about due to being possibly jointly liable with you and the agency if the agency is unreasonable if you had to use a substitute i.e. discrimination laws, health and safety regulations - but your company's tax position is definitely not their concern.

[Wanderer]

I can just sign the contract and look for a new one at the same time; once I'm offered a new one and sorted out the contract, I can give my notice as I only have a day notice. then will have to pay full tax on the 2-3 weeks that I had worked in the worst case?

What you want to do is try to get the agency to be reasonable in their negotiations. Get your legal advisor to give the agent a call and explain what's wrong with their contract and how they can get it fixed.

If the agency won't budge then speak to the client and explain to them that the agency are being difficult about the terms of business and that this has had a big impact on the viability of the contract due to the IR35 status. If the client aren't willing to put pressure on the agency then leave it at that and look for a new job.

Although it's technically nothing to do with the client, it's in their best interest to help you sort out the IR35 status. Indeed, if I were an agent I would be quite happy to see the results of a professional IR35 review of the contract so it could be improved for future contractors and avoid this sort of grief. That said, it sounds like the agency aren't up to much if they were stupid enough to allow you to start working without a proper contract...

[Dynamic]

That said, it sounds like the agency aren't up to much if they were stupid enough to allow you to start working without a proper contract...

I think that's true as the contract that the agency has given me has even no clause for restricting me to work for the client directly! usually I've seen all agencies put something like you're not allowed to work for the same client directly for 12 months, etc.

[LisaContractorUmbrella]

If the contract failed an IR35 review then it is likely that Dynamic's working practises would fail IR35 thereby making any changes to the contract meaningless. The contract obviously has a fettered ROS clause which, in my experience, means that the agency would not countenance the contractor supplying a substitute under any circumstances.

[Wanderer]

If the contract failed an IR35 review then it is likely that Dynamic's working practises would fail IR35 thereby making any changes to the contract meaningless.

The contract has to be properly worded so that the client/agency understand the conditions under which the contractor is willing to carry out the work. Signing an IR35 caught contract sends the wrong message to the client and will tempt the client into treating the contractor like an employee which is what we went contracting to avoid.

The way to operate is to get the contract right up front and then use your business skills to steer the client away from the dreaded "disguised employee" type working practices. The amount of tax to be avoided by avoiding IR35 is substantial and for many of us it wouldn't make business sense to take on an IR35 caught contract. It's certainly something I won't roll over and accept otherwise I'd just bin my LTD company and go umbrella.

But back to the case in point, it seems like once again we have someone who started work without a contract and is now regretting it. It seems like Dynamic has three options:

1. Get the contract IR35 approved
2. If 1. fails then find a new job (it sounds like he can give notice easily)
3. Stay with the client and pay up the IR35 tax

I can't see why the agency wouldn't be willing to amend a contract for IR35 compliance especially if it's been professionally reviewed and found wanting rather than just a bolshie contractor making unreasonable demands. Dynamic, would you like to tell us who the agency is?

[SueEllen]

I think that's true as the contract that the agency has given me has even no clause for restricting me to work for the client directly! usually I've seen all agencies put something like you're not allowed to work for the same client directly for 12 months, etc.

That's because you are opted-in.

If you are opted-in agencies can't put a restrain of trade clause on you like that.

The agency contract with the client may have a clause in it preventing them for hiring you directly.

I know from talking to people who deal with the paper work from hiring contractors that they can have the clause in their contact even if the contractor's contract with the agent doesn't.

(And btw a 12 month restrain of trade clause on you is highly likely to be unenforceable.)

[psychocandy]

Not sure how long you will stay out of contract with this thought? how to handle when immediate start is required?

I was offered the contract on 2nd to start on 3rd. I confirmed in email that I can start the work but only on the condition that we agree on the terms of the contract so...

The agency sent me the contract on 13th (after 10 days; so they were late themselves initially). I got it reviewed and got the result on 16th...

Should have told the agency tough - sort out the contract first.