Contract Wording

[jamesbrown]

The courts don't look favourably on these catch-all indemnity clauses but, regardless of whether they are enforeceable (they are not, in my non-expert opinion), you should seek to have them removed. At best, they're sloppy. The intention is probably to dissuade YourCo from progressing a dispute, even though you'd likely win that dispute. BTW, you obviously need to seek actual legal advice.

[NomDePlum]

First time I've ever had a business negotiate their contract in public with me. Want me to do this online or on email?

For the benefit of others is it worth educating us why these clauses might be required and why they make sense for both agency and ltd company Andy?

[Andy Hallett]

Contract Wording

Generally they are there to protect us from claims where there has been a breach, getting lumped with a tax bill and one of the PSC Consultants claiming they are an employee with all the associated rights respectively.

Generally we have to offer these indemnities up the chain, and as we act as a broker we have pass that risk down.

[NomDePlum]

Generally they are there to protect us from claims where there has been a breach, getting lumped with a tax bill and one of the PSC Consultants claiming they are an employee with all the associated rights respectively.

Generally we have to offer these indemnities up the chain, and as we act as a broker we have pass that risk down.

And does any of that have any relation/impact on the off-payroll liabilities (in your opinion)? I ask as this is obviously the current hot topic.

[Andy Hallett]

Contract Wording

And does any of that have any relation/impact on the off-payroll liabilities (in your opinion)? I ask as this is obviously the current hot topic.

As someone alluded to above, these are quite wide and general clauses. This feedback will prompt me to review these clauses to make them more relevant if appropriate.

At this point I will take all of your advice, and now seek qualified legal opinion.

[malvolio]

Generally they are there to protect us from claims where there has been a breach, getting lumped with a tax bill and one of the PSC Consultants claiming they are an employee with all the associated rights respectively.

Generally we have to offer these indemnities up the chain, and as we act as a broker we have pass that risk down.

Or you construct a pure B2B contract where there is no possibility of the contractor - being an independent limited company - being able to claim employment rights since they are not an individual.

When the agencies stop dealing with us as people and start dealing with us as suppliers of specialist skills, and swap their pseudo employee contracts with all the get outs and risk minimising clauses for simple statements of requirements, timescales and costs, and swap selling three month chunks
regardless of need and start talking about capability and deliverables. then we would all be a lot better off and all this debate about non/deemed/potential employment would cease to be even a consideration.

I know you are one of the more switched on people in your industry Andy, and S3 one of the more professional companies in a trade benighted by cowboys, but someone has to take the lead. You might even consider charging us for job finding rather than the client...

[jamesbrown]

Or you construct a pure B2B contract where there is no possibility of the contractor - being an independent limited company - being able to claim employment rights since they are not an individual.

When the agencies stop dealing with us as people and start dealing with us as suppliers of specialist skills, and swap their pseudo employee contracts with all the get outs and risk minimising clauses for simple statements of requirements, timescales and costs, and swap selling three month chunks
regardless of need and start talking about capability and deliverables. then we would all be a lot better off and all this debate about non/deemed/potential employment would cease to be even a consideration.

I know you are one of the more switched on people in your industry Andy, and S3 one of the more professional companies in a trade benighted by cowboys, but someone has to take the lead. You might even consider charging us for job finding rather than the client...

Some excellent points. However, one likely consequence would be to highlight that quite a few clients really aren't looking for B2B contracts. They are indeed looking for pseudo employees. There will also be cases where they are looking for B2B contracts, but they cannot specify, in detail, what they want upfront. In some cases, this could be addressed with a specifications phase. In other cases, a contract mod is sufficient. None of that undermines what you're saying though; there is value in agents playing a larger role in assisting their clients with a little critical self-reflection about what they really want from a B2B contract (and, whether, instead, they really need an employee).

[Andy Hallett]

Or you construct a pure B2B contract where there is no possibility of the contractor - being an independent limited company - being able to claim employment rights since they are not an individual.

When the agencies stop dealing with us as people and start dealing with us as suppliers of specialist skills, and swap their pseudo employee contracts with all the get outs and risk minimising clauses for simple statements of requirements, timescales and costs, and swap selling three month chunks
regardless of need and start talking about capability and deliverables. then we would all be a lot better off and all this debate about non/deemed/potential employment would cease to be even a consideration.

I know you are one of the more switched on people in your industry Andy, and S3 one of the more professional companies in a trade benighted by cowboys, but someone has to take the lead. You might even consider charging us for job finding rather than the client...

Perhaps one of the most interesting and insightful posts I have read on this board (Sorry NLUK).

Since I entered the industry in 1999 not a huge amount has changed in respect of how agencies operate, what has changed is the amount of 'contractors'. Maybe I hark back to days when the internet was all fields, but generally your Ltd company professional was of a specialist nature. What has happened over the years is that contractors have become part of the fabric of some organisations and used as quasi-permanent staff. You've seen a proliferation, along with a convergence on reward.

I suspect your view about having true B2B contracts is one largely lauded by specialist contractors, but would be shunned by many contractors who seek employment style protection (eg Agency Regs) over risk based engagements.

I agree that agencies haven't changed with the times. Last year in the UK there were 5000 agencies set up! The vast majority of these will be treading the tried and tested paths.

My next project, which was delayed by 9 months whilst I led our programme on IR35 Psec changes, is to look at new contracting models and how we can provide these new offerings. As I alluded to in an earlier post, our role is to create a marketplace and supply the demand for skills within it.

It will be interesting to see how it pans out. The competing forces of the gig economy versus the government view of 1970's employment provide an interesting macro-economic challenge as well.

[Andy Hallett]

Some excellent points. However, one likely consequence would be to highlight that quite a few clients really aren't looking for B2B contracts. They are indeed looking for pseudo employees. There will also be cases where they are looking for B2B contracts, but they cannot specify, in detail, what they want upfront. In some cases, this could be addressed with a specifications phase. In other cases, a contract mod is sufficient. None of that undermines what you're saying though; there is value in agents playing a larger role in assisting their clients with a little critical self-reflection about what they really want from a B2B contract (and, whether, instead, they really need an employee).

Good point, I suspect there is room for both types of service.

[jamesbrown]

Perhaps one of the most interesting and insightful posts I have read on this board (Sorry NLUK).

Since I entered the industry in 1999 not a huge amount has changed in respect of how agencies operate, what has changed is the amount of 'contractors'. Maybe I hark back to days when the internet was all fields, but generally your Ltd company professional was of a specialist nature. What has happened over the years is that contractors have become part of the fabric of some organisations and used as quasi-permanent staff. You've seen a proliferation, along with a convergence on reward.

I suspect your view about having true B2B contracts is one largely lauded by specialist contractors, but would be shunned by many contractors who seek employment style protection (eg Agency Regs) over risk based engagements.

I agree that agencies haven't changed with the times. Last year in the UK there were 5000 agencies set up! The vast majority of these will be treading the tried and tested paths.

My next project, which was delayed by 9 months whilst I led our programme on IR35 Psec changes, is to look at new contracting models and how we can provide these new offerings. As I alluded to in an earlier post, our role is to create a marketplace and supply the demand for skills within it.

It will be interesting to see how it pans out. The competing forces of the gig economy versus the government view of 1970's employment provide an interesting macro-economic challenge as well.

Agree with this too. I think it's all pointing in one direction, in the long-term. The sort of BoS/BAU contracting that has become prevalent in recent years (and I don't say this in a sneering way) is increasingly likely to be filled by FTC or, at least, "employees for tax purposes". On the other hand, consultancy/expert contracts are going to need to be much more tightly formulated with B2B terms (with all associated risks). At the same time, the ability to arbitrage different forms of working are likely to be greatly reduced (which would be fine if it were done in an honest way, i.e. not via "employees for tax purposes").