Reply to: Agency will not permit dividend method of payment

[Mailman]

And I don't see what chasing an agent for non payment, has to do with anything here?

tim

I think in essence we are talking about the same thing.

Re your last point...it was because initially the agents tried to pull the old penalty clause on me as their basis for with holding payment. Then they moved on to me going elsewhere...then they tried to tell us the action should be against a third party who's sole role was to act as paymaster (which the contract clearly stated, dont you hate it when agents dont read their own contract! ).

Essentially the agents tried to enforce an unenforceable and illegal clause in my contract with them. Again, as the courts clearly stated, just because a clause is in a contract does not make that clause enforceable.

Regards

Mailman

[simes]

Interesting term there, "deemed employed" by the agency. I wonder if you could turn around and get the benefits from the agency that temps are due (Paid holidays, sickness benefit so forth)

Absolutely, as mentioned earlier.

I would mention this to them, if faced with this situation, and then laugh at them, and then walk away.

[simes]

no-one should accept this from any agent. Just say no thanks and go elsewhere. If people accept this it will become the norm and we may as well all go permie. Do any contractors actually have a spine now or do they just sit at home worrying that the IR are coming after them.

Totally agree - which is why she walked away.

And I don't think it is the contractor who is spineless in this case, it is AM who is spineless because they can't be bothered with the queries from IR. It is a very lazy form of business with only their own interests at heart and certainly not those of the contractor. So f--k 'em, and f--k 'em sideways.

[insight14]

Are they going t try and come after me, surely it would be laughed out of court.

I think this is the crux - what can they do if you are in breach of the clause? As long as you are still "opted-in", the agency cannot withhold payment for work already done (regulation 12). I would have thought the worst they could do is immediate termination of the contract citing breach of contract.

It sounds very much like the IR leaning on the agents, who in turn want to be seen to be co-operating with the IR. As long as they've got your signature saying you aren't paying yourself dividends, that will be the last you hear of it from the agent.

[Ardesco]

I still don't see how they can tell you what to do with the money that goes into your company. As an example I use left over money from my contracts to buy servers to sell on web space and am in the process of creatng my plan b income for beer money and to keep things ticking over while i'm out of contract.

How can a contract tell me that I must take 95% of the money from that contract as a salary, what if I don't want to take a salary and instead by more servers?? Are they going t try and come after me, surely it would be laughed out of court. The same thing must surely apply for dividends. They pay my company the money and its up to my company to do what they wish with the money, after all the agreement is between my company and the agency, what if my company has other employess that need to e paid out of that money, am I not allowed to do that either.

I just don't see how this sort of clause could ever be taken seriously.

[tim123]

Mailman, you are using a circular arguement.

I accept that some clauses in a contract are illegal and that they are not legally binding.

But the point here is that, just because a particular clause has no apparent commercial reason for being in the contract, it doesn't become illegal just for that reason. It may have been illegal anyway, but if it isn't, it's theoretically enforcable.

And I don't see what chasing an agent for non payment, has to do with anything here?

tim

[Underscore2]

The point is

no-one should accept this from any agent. Just say no thanks and go elsewhere. If people accept this it will become the norm and we may as well all go permie. Do any contractors actually have a spine now or do they just sit at home worrying that the IR are coming after them.

[Mailman]

Tim,

Your comment below:

A party to a contract can insert whatever clause it likes into the contract and if you agree to it, and it's legal, they can theoretically enforce it. There's no requirement for there to be any business justification.

Is what I am trying to get at. Just because a clause is in a contract does not make that clause legally binding (as per the example I provided). Also, even if a clause is illegal that does not mean the agents wont try and enforce it.

I spent a good part of last year dragging a bunch of dodgy f*cks through the courts here to get the money they owed me back for work. Unfortunately for them they lost and have since changed the contracts they have with their contractors to take this in to consideration.

Regards

Mailman

[tim123]

rebecca, don't know? (see below)

Mailman, what is your point? Are you saying that this clause would be viod because you've assumed that it includes a penalty (which would be void, so it doesn't)

Or are you saying that my comment is incorrect simply because you can contrive an example of a penaly to make it wrong? Which it doesn't because such a 'penaly' clause doesn't pass the 'if it is legal' bit which I put in precisely for cases like this. As you say, unjustified (in the sense of unearned) penalties are not legally enforcable.

So we come back to the practicality. This clause is pointless without there being a provable loss to sue for. I agree that this is hard to find, but I can't see that just because you can't see a loss today, doesn't mean that there isn't one.

tim

[Mailman]

Sorry rebecca, I don't think your arguement is right.

A party to a contract can insert whatever clause it likes into the contract and if you agree to it, and it's legal, they can theoretically enforce it. There's no requirement for there to be any business justification.

Tim,

This is incorrect. An agent can add a "penalty" clause in to a contract however that clause will be void because penalty clauses are unenforceable (legal opinion, not just mine).

Just because the clause is there does not make it legal or enforceable.

Regards

Mailman

[Rebecca Loos]

But Tim, is that always true? Isn't there in law the concept of a restrictive clause, that a party can disobey if either it places unfair restrictions on the party, or if the other business party would suffer no prejudice if it was breached?

[tim123]

Sorry rebecca, I don't think your arguement is right.

A party to a contract can insert whatever clause it likes into the contract and if you agree to it, and it's legal, they can theoretically enforce it. There's no requirement for there to be any business justification.

Though it does seem to me that they can't enforce it practically. You take the dividends, they find out and sue, you wind up the company, no money.
And that's if they find out.

tim

[Rebecca Loos]

threaded: exactly. Hence the irrelevance of any clause that does not deal with the transaction between the 2 parties.

[threaded]

Rebecca Loos: Actually a contract is rather like making laws about how the parties to the contract will deal with each other.

[Rebecca Loos]

Well NSW I am glad you are not a lawmaker! The point of a legal system is in defining the laws and making sure they can be enforced. You seem to be locked on the idea that somehow the "agency has to enforce the law". No, business parties do not enforce laws, the justice system does, with the help of a law enforcement agency (!no pun intended).

My question wasn't: what is the point of a clause that the agency cannot enforce but "what is the point of a clause that is not enforceable from a business point of view and that the agency or whoever interested party cannot ask the justice system to enforce". This is not about agencies powers but about the very legality of putting a clause that has no relation to the business transaction described in the contract - unenforceable, not as in "the agency cannot force you to do this although they have a right to do so", but "the agency cannot force you to do this since they have no right to do so"

Your point 3. is actually the very point that would save you in court, incidentally. It has been the case, time and again, that unfair/unlawful clauses in contracts can be ignored and it has been successfully argued in court that a specific clause i a contract can be ignored in certain circumstances.

I think at the root of all this, you have forgotten that it is a business-to-business contract, rather than anything to do with employment. Your company submits an invoice to the agency, this goes from one business entity to another business entity. But maybe too many contractors these days have got an employee mentality and this explains that agencies/IR think they can intimidate contractors that way.

think about it this way: would you ask a plumber to sign a contract detailing you how he's going to pay himself? That would be ridiculous and the plumber would be perfectly entitled to sign your contract and then ignore that clause.