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Contractor conundrum - Legal advice appreciated

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    Contractor conundrum - Legal advice appreciated

    OK - this is going to seem like a bit of a weird one for you all - but there are alot of people here who have a better grasp of standard law within the interim management world (and probably a heap more who think they do) - so I'm really asking for their help here.

    Just before I explain, my goal here is not to line my own pocket. It's partially revenge, but mainly it's to redress what I feel is a very very unfair equation. It's fair to say it would do my PR within a major organisation a whole heap of good as well, which may or may not lead to future business - who knows - so don't believe for a second that there's nothing at all in it for me - but I'm not out to make a quick buck here.

    Anyhow - here's the deal.

    Contractor, on site through the same agency for nearly 5 years. This is not a debate about whether he's a disguised permie though - so none of that rubbish please! Client extends regularly, agency CREAMS the margin (23% MARGIN - on a £700 day rate - that's right - £209 PER DAY).

    Essentially, agency does to** all for this. They don't bother to check the candidate - they don't bother to even process the paperwork for renewals on time.

    Then the worst happens - Contractor runs out of contract, and client goes bannanas.

    In order to resolve the situation, and keep the contractor on board (embedded in MASSIVE projects) the situation is escalated, where management deem that after 5 years, they can expect a much better rate than 23% margin, and say that they will retain the day rate, but will no longer cover the contractors hotel costs (which they manage directly....again, this is not a debate about his/her tax affairs) - but that on that basis, the agency should be able to at least partially cover the hotel costs (£70 per night) out of their margin.

    Agency point blank refuses to do this....to the point of screaming at the client and contractor. Client vows said company will never get any business from them again - this is all good in my eyes. Contractor, is OPTED OUT.

    So - under what circumstances, could the contractor remove the agency from the loop, and retain the client, without a whole heap of legal challenges? The cost of "buying out" the contract according to the terms, would be prohibitive (£23,000).

    Now naturally, if the solution involved bringing me in as a replacement agent - I'm fine with that - but this is not my goal - this guy is someone who I placed in that role 5 years ago, and with whom I have retained an extremely strong relationship - I just want to get him away from the agency he's with (and perhaps right a wrong, that I can't help but feel a little responsible for), without jeapordising his future contracts with them. It would also make the client feel alot happier as well!!

    So ....suggestions welcomed. I appreciate this is a bit backwards - normally its you lot upset that an agency is screwing you.....sometimes though, even agents fight for something based on their principles, regardless of money.....If any of you can help - I'd appreciate it......
    "Being a permy is like being married, when there's no more sex on the cards....and she's got fat."
    SlimRick

    Can't argue with that

    #2
    If the client is refusing to accept the agencies terms, and the agency refuses to change them, then surely there is no problem?

    The contractor can quite rightly demonstrate that the agency suffers no loss by him going direct or via another agent as they have effectively refused the contract thats been offered to them.
    Still Invoicing

    Comment


      #3
      Price vs Cost...

      Is £23k expensive? How much would it cost to take the guy out of the equation and put someone else in, not in direct costs but in lost productivity and damaged deadlines? Not to mention probably irreperable damage to your relations with the client?

      Would you take a 25% reduction in your income easily? That's what you're offering the agency.

      This is bite the bullet time. You want to keep the worker and lose the agency, pay the price. Or make a counter offer. It would cost you more in legal fees to fight it anyway.
      Blog? What blog...?

      Comment


        #4
        Originally posted by The Agents View View Post
        OK - this is going to seem like a bit of a weird one for you all - but there are alot of people here who have a better grasp of standard law within the interim management world (and probably a heap more who think they do) - so I'm really asking for their help here.

        Just before I explain, my goal here is not to line my own pocket. It's partially revenge, but mainly it's to redress what I feel is a very very unfair equation. It's fair to say it would do my PR within a major organisation a whole heap of good as well, which may or may not lead to future business - who knows - so don't believe for a second that there's nothing at all in it for me - but I'm not out to make a quick buck here.

        Anyhow - here's the deal.

        Contractor, on site through the same agency for nearly 5 years. This is not a debate about whether he's a disguised permie though - so none of that rubbish please! Client extends regularly, agency CREAMS the margin (23% MARGIN - on a £700 day rate - that's right - £209 PER DAY).

        Essentially, agency does to** all for this. They don't bother to check the candidate - they don't bother to even process the paperwork for renewals on time.

        Then the worst happens - Contractor runs out of contract, and client goes bannanas.

        In order to resolve the situation, and keep the contractor on board (embedded in MASSIVE projects) the situation is escalated, where management deem that after 5 years, they can expect a much better rate than 23% margin, and say that they will retain the day rate, but will no longer cover the contractors hotel costs (which they manage directly....again, this is not a debate about his/her tax affairs) - but that on that basis, the agency should be able to at least partially cover the hotel costs (£70 per night) out of their margin.

        Agency point blank refuses to do this....to the point of screaming at the client and contractor. Client vows said company will never get any business from them again - this is all good in my eyes. Contractor, is OPTED OUT.

        So - under what circumstances, could the contractor remove the agency from the loop, and retain the client, without a whole heap of legal challenges? The cost of "buying out" the contract according to the terms, would be prohibitive (£23,000).

        Now naturally, if the solution involved bringing me in as a replacement agent - I'm fine with that - but this is not my goal - this guy is someone who I placed in that role 5 years ago, and with whom I have retained an extremely strong relationship - I just want to get him away from the agency he's with (and perhaps right a wrong, that I can't help but feel a little responsible for), without jeapordising his future contracts with them. It would also make the client feel alot happier as well!!

        So ....suggestions welcomed. I appreciate this is a bit backwards - normally its you lot upset that an agency is screwing you.....sometimes though, even agents fight for something based on their principles, regardless of money.....If any of you can help - I'd appreciate it......
        An agent with a moral cause that might have the "secondary" effect of enriching him


        Just how stupid do you think we are?

        Let us not forget EU open doors immigration benefits IT contractors more than anyone

        Comment


          #5
          Originally posted by malvolio View Post
          Price vs Cost...

          Is £23k expensive? How much would it cost to take the guy out of the equation and put someone else in, not in direct costs but in lost productivity and damaged deadlines? Not to mention probably irreperable damage to your relations with the client?
          If they were to lose the contractor - they'd go bonkers. he's pivotal to a number of major investments.

          Would you take a 25% reduction in your income easily? That's what you're offering the agency.
          Actually, the client is offering about (give or take) at 33% cut, in their MARGIN (not the income - the margin)


          This is bite the bullet time. You want to keep the worker and lose the agency, pay the price. Or make a counter offer. It would cost you more in legal fees to fight it anyway.
          Realistically all it's doing, is causing the contractor grief. His hand has been forced, as he couldn't afford to be without the contract - as it would have halted progress on major projects - he's not the kind to hold the client to ransom over a petty agency who can't accept that having made £230,000 off of ONE CONTRACTOR - that the client should probably expect a little leniency on the margin area - so he's had to sign the terms the agency commanded. This kind of covers the first reply posted too - the agency is now in a position where loss of income would be tangible.
          "Being a permy is like being married, when there's no more sex on the cards....and she's got fat."
          SlimRick

          Can't argue with that

          Comment


            #6
            Originally posted by DodgyAgent View Post
            An agent with a moral cause that might have the "secondary" effect of enriching him


            Just how stupid do you think we are?

            I've been quite clear that this may have some positive effects for me....
            This is more about my relationship with the contractor than anything else - but as stated - it wouldn't do my PR any harm - so everyone's a winner...... Maybe not financially, maybe not immediately - but eventually, those who fight for what is right and proper, will win out. And people like you will end up on the scrap heap, where you belong.

            /rant at pillock mode off.
            "Being a permy is like being married, when there's no more sex on the cards....and she's got fat."
            SlimRick

            Can't argue with that

            Comment


              #7
              Originally posted by The Agents View View Post
              I've been quite clear that this may have some positive effects for me....
              This is more about my relationship with the contractor than anything else - but as stated - it wouldn't do my PR any harm - so everyone's a winner...... Maybe not financially, maybe not immediately - but eventually, those who fight for what is right and proper, will win out. And people like you will end up on the scrap heap, where you belong.

              /rant at sanctimonious mode off.


              FTFY

              Pillock mode is not something you would be able to turn off
              Last edited by DodgyAgent; 12 March 2013, 15:54.
              Let us not forget EU open doors immigration benefits IT contractors more than anyone

              Comment


                #8
                Originally posted by The Agents View View Post
                Agency point blank refuses to do this....to the point of screaming at the client and contractor. Client vows said company will never get any business from them again - this is all good in my eyes. Contractor, is OPTED OUT.
                I would have thought at this point it is open season. Incognito has a good grasp on this but if I remember correctly a Handcuff clause can only be enforced if one party can be showing to be out of pocket. This would make sense, sto people jumping ship and companies losing money, theory seems fine. If the situation then changes and the agent will no longer make a penny from the client there is absolutely no gain or loss in trying to hold the client/contractor to the handcuff. Even if they won and the contractor can't work for the client the agent still won't get a penny. Seems a ridiculous situation.

                Once this has been communicated and the agent is officially out of the loop I would politely step in with a good offer to the client that satisfies everyone Easy money.

                IANAL and all that.....
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #9
                  Originally posted by northernladuk View Post

                  IANAL and all that.....
                  Actually had to look this up.

                  How appropriate that an acronym regarding lawyers should involve the a word associated with being shafted?!?

                  Thank NorthernladUK - that's an interesting perspective.

                  Essentially my advice to the client therefore, should be to get them to write to the agency and state that they will no longer be using the agency for any business purpose, and that they are to remove all data relating to them from their database. Once this has been completed, and upon completion of the current 3 month contract, they can then state that the contract with the agency has concluded, and either engage the contractors LTD co. directly, or, seek other agencies to cover that (whether I can or not, is not up for discussion on this forum - there's a whole heap of paperwork to do to make that happen anyway - so it might be easier for this particular contractor to find a different agency).
                  "Being a permy is like being married, when there's no more sex on the cards....and she's got fat."
                  SlimRick

                  Can't argue with that

                  Comment


                    #10
                    Originally posted by blacjac View Post
                    If the client is refusing to accept the agencies terms, and the agency refuses to change them, then surely there is no problem?

                    The contractor can quite rightly demonstrate that the agency suffers no loss by him going direct or via another agent as they have effectively refused the contract thats been offered to them.
                    This.

                    The agency is suffering no loss since the contractor wont stay under the current circumstances and they are refusing to budge in an effort to keep him on site.

                    They cant have their cake and eat it.
                    I couldn't give two fornicators! Yes, really!

                    Comment

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