Reply to: Advice on signing a new and first limited company contract with an agency

[newbieITContractor2015]

After talking to the recruitment company, they've sent a new opt-in contract, having read the clauses below:

"Where AWR applies to an Assignment and the Services are anticipated to be provided for a period
exceeding the Qualifying Period, the Company reserves the right to vary the terms of the Assignment
Schedule (and in particular the Contract Rate) where the Company deems it necessary (in its absolute
opinion) to ensure its compliance with the AWR, on giving notice to the Supplier"

"Where the Assignment Schedule continues beyond the Qualifying Period, the Representative (through the
Supplier) may be entitled to additional rights under the Relevant Terms and Conditions set out below,
which shall take effect from the completion of the Qualifying Period (the details of which shall be set out in
any variation to the Assignment Schedule issued by the Company pursuant to clause 4.5 above):

8.1.1. additional paid annual leave (to the extent that the Relevant Terms and Conditions entitlement
exceeds the existing paid annual leave entitlement the Representative is entitled to pursuant to
its contract with the Supplier, the minimum entitlement of which (28 days’) is already accounted
for in the Contract Rate as set out in Clause 2.1 above);"


In addition the opt-in contract had a clause which specifically stated I can contract with 3rd parties as long as there are no conflicts of interest. The opt-out simply removed the clause and doesn't mention it one way or another.

I think it safer to use the opt-out contract.

[stek]

I think we all know which agencies are on which clientco PSL for the major players anyway...

[LondonManc]

And you have access to the end clients agency list... hmmm

Everyone has a choice I suppose. I'm just trying to help the OP understand what could happen in some instances.

It's not difficult to do.

[MrMarkyMark]

Nope but it's blooming obvious on job serve which agencies are trying to fill a contract

Ain't that the case........ sometimes, if a big team is being looked for, the better roles are with the more professional agencies.
The lower paid roles will be with others.
It should be noted the ad is worded the same.

Obviously, it helps to know this

[eek]

And you have access to the end clients agency list... hmmm

Everyone has a choice I suppose. I'm just trying to help the OP understand what could happen in some instances.

Nope but it's blooming obvious on job serve which agencies are trying to fill a contract

[Agent]

It's worth pointing out that my only red flag with agencies is an agency insisting on me opting opt. If they do I move to the next agency on the end clients list or just skip the opportunity

And you have access to the end clients agency list... hmmm

Everyone has a choice I suppose. I'm just trying to help the OP understand what could happen in some instances.

[GillsMan]

I've already shown my ignorance on the matter by forgetting which way round opt in and opt out was, but I remember looking what opting in meant and deciding that it seemed slightly more that I was in business in my own right by opting out.

I didn't (and still don't) think it had any bearing on IR35, but I've always tried to operate as business first and a BOS contractor last. That's why I decided to opt out. None of the opt in 'benefits' really mattered to me.

I still think the general guidance of this forum to opt out is sound and good advice, and I agree with the OP trying to opt in. I'm just explaining why I decided to opt out.

One other reason is that I nearly always had something in the contract I wanted to negotiate - reduce the handcuff clause, make it more clear the contract is with MyCo Ltd, tighten up the RoS clause, etc. I decided to pick my battles and agreed to opt out on the basis that I wanted my contract improved.

Maybe I was lucky in never having issues - certainly it seems you do get a bit more protection in terms of invoices being paid if you opt in. But there, that's why I always always opted out.

[eek]

That may be the case sometimes but we all know that agencies like contractors to be opted-out. The initial compensation may not be as much as you think. Agencies are not gonna get rich getting paid for 13 weeks margin then missing out on another 12 months because the contractor / procurement suddenly realised that they can hire direct without a cost.

It's not that the client pulls tricks it's that things change. At a agency that I previously worked, we lost 15 contractors in one hit because the opt-out process hadn't been followed correctly. A new opt-out savvy procurement guy joined our client and realised that he could make a huge saving by hiring them all direct. It completely f*cked the agency who had made investments and hires on the basis of having this contract revenue. It only ever happened once, but guess how many opt-in contractors we put forward after that happened....zero, nada, none.

I'm not saying it will happen but just making the OP aware that this is a red flag for any recruiter. If it's 50/50 between you and another contractor who's opted out then I guarantee it's a deciding factor.

It's worth pointing out that my only red flag with agencies is an agency insisting on me opting opt. If they do I move to the next agency on the end clients list or just skip the opportunity

[MrMarkyMark]

That's pretty standard as the contract for services normally references your opt in/out status. If it suddenly goes quiet for 24/48 hours then they're trying to find a replacement for you... just a heads up.

Legally, although there is no case law as such, you are likely to be technically opted in as you have already met the client.
Most agencies don't get this.

[Agent]

Hmm, I'm more confused now. I've spoken to the recruiter they say they'll need to send out a new contract if I choose to opt in, let's see...

That's pretty standard as the contract for services normally references your opt in/out status. If it suddenly goes quiet for 24/48 hours then they're trying to find a replacement for you... just a heads up.

[Agent]

Didn't you just say the opposite a couple of posts down?

typo

[newbieITContractor2015]

Hmm, I'm more confused now. I've spoken to the recruiter they say they'll need to send out a new contract if I choose to opt in, let's see...

[northernladuk]

That may be the case sometimes but we all know that agencies like contractors to be opted-in. The initial compensation may not be as much as you think. Agencies are not gonna get rich getting paid for 13 weeks margin then missing out on another 12 months because the contractor / procurement suddenly realised that they can hire direct without a cost.

Didn't you just say the opposite a couple of posts down?

[Agent]

Many agencies survive on being good enough that there is no incentive for either the agency or end client to pull tricks.

Also even if I've opted in assuming you've got a decent contract with the end client the end client should be compensating you for finding me.. Your argument only works if you sign any old contract the end client offers you and haven't thought things through......

That may be the case sometimes but we all know that agencies like contractors to be opted-out. The initial compensation may not be as much as you think. Agencies are not gonna get rich getting paid for 13 weeks margin then missing out on another 12 months because the contractor / procurement suddenly realised that they can hire direct without a cost.

It's not that the client pulls tricks it's that things change. At a agency that I previously worked, we lost 15 contractors in one hit because the opt-out process hadn't been followed correctly. A new opt-out savvy procurement guy joined our client and realised that he could make a huge saving by hiring them all direct. It completely f*cked the agency who had made investments and hires on the basis of having this contract revenue. It only ever happened once, but guess how many opt-in contractors we put forward after that happened....zero, nada, none.

I'm not saying it will happen but just making the OP aware that this is a red flag for any recruiter. If it's 50/50 between you and another contractor who's opted out then I guarantee it's a deciding factor.

[eek]

You could come unstuck if you decide to opt-in. Some agencies simply won't work with contractors that opt-in. They can't legally make you opt-out but they can withdraw you and put someone else in place.

From the agencies POV, you opting-in bascially says 'in 13 weeks time I'm gonna screw you and go direct to the client'.

You don't need to be opted in to get the payment terms you mentioned, just get these same terms added to your contract.

Many agencies survive on being good enough that there is no incentive for either the agency or end client to pull tricks.

Also even if I've opted in assuming you've got a decent contract with the end client the end client should be compensating you for finding me.. Your argument only works if you sign any old contract the end client offers you and haven't thought things through......