Client now suggesting not to deal direct

[northernladuk]

Clients prefer it because they perceive (rightly or wrongly) that it limits the worker from claiming employment rights from the client. It also means they can get the agency to do their dirty work for them when they want to cut the pay rate of the contractors....

I don't even think it is this clever. Just outsourcing to a single supplier to reduce headcount and drive costs down. Happening in every area of their business I expect. We all know outsourcing work can be more problematic and cost more in the long run but headcount comes down and bean counters are happy. I would be surprised if there is any other factors such as the ones mentioned are even considered.

[cojak]

Clients prefer it because they perceive (rightly or wrongly) that it limits the worker from claiming employment rights from the client. It also means they can get the agency to do their dirty work for them when they want to cut the pay rate of the contractors....

If the client was worried about that I would take the opportunity of explaining how to create a 'proper' contract and how to work with contractors to avoid this from happening in the first place.

This article presents IR35 from a client's POV.

When is a contractor not a contractor?

[d000hg]

Did they mention anything about a rate change by introducing an agent? AM will expect a cut and if they have engaged you direct and pulled the carpet from under you at the last minute you will expect that cut to be covered by the client and not by you.

Maybe even use that with the client - make sure your contact is told that they will have to pay the 10% or so on top of your rate. Might make them push back against HR.

[Wanderer]

Anyone got any clues on why they'd prefer this option? It's going to cost them more and there's someone else involved so doesn;t make sense. Think they've got the heeby jeebies about something in the contract? Any ideas on how to resolve with the HR department?

I know someone who was in a similar situation. Got a contract direct and the client paid an agency to take the work on. The agency margin was small, about 4 or 5% I think, but the client paid that and the contractor got the rate they negotiated so no loss to the contractor.

It's probably not a bad thing, you do get some sort of protection from the Agency Regulations (DON'T sign the opt out form). If they want to pay on 30 day terms then insist that you will invoice weekly. Agencies are probably more reliable about paying invoices than direct clients too...

Clients prefer it because they perceive (rightly or wrongly) that it limits the worker from claiming employment rights from the client. It also means they can get the agency to do their dirty work for them when they want to cut the pay rate of the contractors....

[northernladuk]

Thanks for the reply. I appreciate your time on this and it's definitely put my mind at rest. I definitely think it's a case of the manager going direct and getting told by HR that it's not the norm. I was quick to point out that the day rate I recieve stays the same and that was agreed over email. So as long as the agency come up with a proper contract and don't play daft buggers if it needs changing then it should be happy days!

Do a search for the agent on here as well to check there are no red flags. Something tells me someone complained about AM not being great at paying on time but I could be wrong. Use the search method as detailed in the thread below and go in forewarned...

http://forums.contractoruk.com/welco...uk-forums.html

[MJL2012]

Did they mention anything about a rate change by introducing an agent? AM will expect a cut and if they have engaged you direct and pulled the carpet from under you at the last minute you will expect that cut to be covered by the client and not by you.

You have already indicated it isn't the norm that the client does this and they obviously have a deal with AM so I would say chances of changing going direct are slim to nil but make sure you are not losing out on rate.

As long as it isn't delaying anything I don't see a problem with waiting for the AM one and getting that reviewed.

They will have AM on as a preferred solution so they have a one stop shop for issues. Going direct means the client is legally responsible for each contract as well as all the issues of dealing with umpteen small companies. Much easy to outsource all these dealings and a majority of the responsibility to AM. In my contracting career this is the norm with direct clients being in the minority. Just a bit odd they have advised one thing and then pulled it. I wonder if this is a mistake made by one person not knowing the standard process rather than process problem at the client.

Thanks for the reply. I appreciate your time on this and it's definitely put my mind at rest. I definitely think it's a case of the manager going direct and getting told by HR that it's not the norm. I was quick to point out that the day rate I recieve stays the same and that was agreed over email. So as long as the agency come up with a proper contract and don't play daft buggers if it needs changing then it should be happy days!

[northernladuk]

Did they mention anything about a rate change by introducing an agent? AM will expect a cut and if they have engaged you direct and pulled the carpet from under you at the last minute you will expect that cut to be covered by the client and not by you.

You have already indicated it isn't the norm that the client does this and they obviously have a deal with AM so I would say chances of changing going direct are slim to nil but make sure you are not losing out on rate.

As long as it isn't delaying anything I don't see a problem with waiting for the AM one and getting that reviewed.

They will have AM on as a preferred solution so they have a one stop shop for issues. Going direct means the client is legally responsible for each contract as well as all the issues of dealing with umpteen small companies. Much easy to outsource all these dealings and a majority of the responsibility to AM. In my contracting career this is the norm with direct clients being in the minority. Just a bit odd they have advised one thing and then pulled it. I wonder if this is a mistake made by one person not knowing the standard process rather than process problem at the client.

[MJL2012]

It sounds like HR have stuck their noses in so that they look as if they're in control.

I would just stick to your guns re. passing the contract to QDOS but play hard ball if AM tell you that they don't change their contracts. Tell the manager you're dealing with what is going on.

Thanks very much for that. I found this which probably sums it up where they're coming from.

It was the manager who agreed the terms with me and it was only when I started talking about signed contracts and IR35 compliance that HR got involved. She was probably in the wrong to offer me it direct so will see how it pans out this week. Yeah a QDOS approved contract will be a condition of me going through the agency. Thanks again.

[cojak]

It sounds like HR have stuck their noses in so that they look as if they're in control.

I would just stick to your guns re. passing the contract to QDOS but play hard ball if AM tell you that they don't change their contracts. Tell the manager you're dealing with what is going on.

[MJL2012]

Hello All, Hope your'e all well today!

I'm very wet behind the ears with all this and was wondering if anyone could please offer some advice.

I'm due to start my first contract in a couple of weeks and basics of start date, day rate etc have been agreed over email with the client. The client has seemed happy to deal direct with me but it's not usually how they do things. I've set my company up etc and presented them with an IR35 compliant template contract kindly supplied by SJD. This has been sent to HR and they're now suggesting an alternative of me signing up to Alexander Mann Solutions and them sorting an IR35 compliant contract out and handling everything through them. I've informed the client that I'll be getting a contract specialist (Qdos) to be looking at the contract anyway.

Anyone got any clues on why they'd prefer this option? It's going to cost them more and there's someone else involved so doesn;t make sense. Think they've got the heeby jeebies about something in the contract? Any ideas on how to resolve with the HR department?

Thanks in advance!