Contractor conundrum - Legal advice appreciated

[TheFaQQer]

What are the terms of the contractor's contract going through someone else?

I just wonder whether the client could engage someone else, and that company then invoke their substitution clause, and bring in the original guy as the substitute.

Chain now becomes client > new agency > new co > old co

There is no contractual relationship between old co and client.

There must be something to stop it (I guess) but might be worth a shot - old agency couldn't go after client because they aren't engaging the previous guy. They engaged someone else, who brought him in as a consultant.

[northernladuk]

I thought this wouldn't work. Coming in under the guise of a different company is an artifical method to avoid the spirit of the rule and would therefore fail in court? The person is the resource generator so is key regardless of the employment status.

I guess the Opt In/Out status would have a bearing here as well of course.

Interesting read here Piercing the corporate veil - Wikipedia, the free encyclopedia

The second paragraph says...

A simple example would be where a businessman has left his job as a director and has signed a contract to not compete with the company he has just left for a period of time. If he set up a company which competed with his former company, technically it would be the company and not the person competing. But it is likely a court would say that the new company was just a "sham", a "fraud" or some other phrase,[1] and would still allow the old company to sue the man for breach of contract. A court would look beyond the legal fiction to the reality of the situation.

There is also a section on existing obligations stating some case law where it didn't work.

[MrMarkyMark]

The salient points:-

Contractor, on site through the same agency for nearly 5 years.

agency CREAMS the margin (23% MARGIN - on a £700 day rate - that's right - £209 PER DAY).

I'm not out to make a quick buck here,

this guy is someone who I placed in that role 5 years ago

How much did you get out of the creamy margin?

[tractor]

The salient points:-



How much did you get out of the creamy margin?

Clearly, not enough lol he wants seconds....

Agents fighting on a contractor board now I've seen it all....



Oh, and my main point was "If they were to lose the contractor - they'd go bonkers. he's pivotal to a number of major investments."

Clearly he's not 23k pivotal. That's just an extra £100 for each week he's been there and if he's there another 5 years, that makes it £50 even before you take off the saving they will make when they eventually extricate the greediest agent out of the players

[Andy Hallett]

The OP is clearly doing this for the good of the contractor, well done you. Given the buyout clause represents a mere 23 weeks it would make economic sense for the client to activate this for what seems like a long term contract which I presume will roll on well past that.

Also if the agency contract between the client is sound then it will be a transfer fee and will be 'pre agreed', failure to supply does not therefore come into play.

There is also a common belief from contractors that margins should go down. In this example, the economic value to that client of said contractor as a result of the agency's clearly spot on introduction has risen, why shouldn't the margin go up?

[Moscow Mule]

. In this example, the economic value to that client of said contractor as a result of the agency's clearly spot on introduction has risen, why shouldn't the margin go up?

As a result of the contractor's continued professional development. Agency has done cock all for x years.

[Andy Hallett]

Contractor conundrum - Legal advice appreciated

As a result of the contractor's continued professional development. Agency has done cock all for x years.

Manage the extensions, ensure payments are guaranteed, accurate and timely, reduce risk to client that someone there for 5 years could be deemed an employee.

In this instance they found the contractor a solid role for 5 years (whilst many sit on the bench) and the end client a resource that they continue to consume. Worth every penny.

[The Agents View]

The salient points:-



How much did you get out of the creamy margin?

Bit of a stupid question really. About 15% of the profit. Like any other recruiter. I was there for 7 months after placing him - I'm sure you've got a calculator to do the rest.


This kind of action was commonplace within the business, and essentially ruined my relationship with the client - the client asked for a little leniency on a fee for someone else, about 7 months after this placement, with huge projects on the horizon, and myself and one other poised to essentially "make hay". My attitude of short term pain, for a long term gain, was not well received by my employers, and the counter response was so short of business nouse, that it led to my resignation.

[The Agents View]

The OP is clearly doing this for the good of the contractor, well done you. Given the buyout clause represents a mere 23 weeks it would make economic sense for the client to activate this for what seems like a long term contract which I presume will roll on well past that.

Also if the agency contract between the client is sound then it will be a transfer fee and will be 'pre agreed', failure to supply does not therefore come into play.

There is also a common belief from contractors that margins should go down. In this example, the economic value to that client of said contractor as a result of the agency's clearly spot on introduction has risen, why shouldn't the margin go up?

Because £230,000 of fees for one person, is quite enough.

And because the fees were agreed around a set of key customer services pledges - none of which have been fulfilled since the agent who did the introduction, left (that's ME!)

Andy Hallett, I guess you work for an agency similar to my previous employer - one which claims that they add value by being part of projects...... It's all poppycock. We take a set of requirements, we match them to a contractor. We do not "become part of the project team" or any other baloney - we do a job - which we should be paid upon - but even the most avid fan of the agency environment, has to admit that after 5 years, and effectively delivering enough profit to pay for one of the directors houses, he has the right to expect a little bit of margin to cover a hotel during a recession, surely?

[The Agents View]

Clearly, not enough lol he wants seconds....

Agents fighting on a contractor board now I've seen it all....



Oh, and my main point was "If they were to lose the contractor - they'd go bonkers. he's pivotal to a number of major investments."

Clearly he's not 23k pivotal. That's just an extra £100 for each week he's been there and if he's there another 5 years, that makes it £50 even before you take off the saving they will make when they eventually extricate the greediest agent out of the players

£23,000 is a matter of principle really - but equally where, internally, do you put that cost? One could argue that it should come out of the budget of every project he has worked on historically. That's not possible - so then you end up with in-fighting of "Why the f*** am i paying this fee for someone elses' lack of commercial savvy, from MY budget, and therefore affecting my chances of hitting budget/ getting my bonus?"