Query on another contractor charging you "introducer fees"

[DirtyDog]

There is a big difference between an introduction fee and an ongoing rate for (you would expect) services offered. An agent will carry out certain pieces of work such as identity checking and eligibility etc. They also have many other business processes as an agent to carry out. This person does squat. They should have gotten a finders fee and that's that. As to why the friend didn't query this a long time then god only knows what is going on.

I should be living in a 14 carat yacht with 100 concubines, but I'm not.

The director of the company they are legally responsible for running should have read the contract that they were signing, but they didn't.

Who gives any of us the right to dictate what a business should or shouldn't get? There may well be a moral obligation not to do this (and that is the only point where "should" comes into it), but there certainly isn't a business reason not to do it, and assuming the contract was drawn up properly and was signed without any deviousness, then there isn't a legal reason not to do it, either.

[GazCol]

There is a big difference between an introduction fee and an ongoing rate for (you would expect) services offered. An agent will carry out certain pieces of work such as identity checking and eligibility etc. They also have many other business processes as an agent to carry out. This person does squat. They should have gotten a finders fee and that's that. As to why the friend didn't query this a long time then god only knows what is going on.

I don't doubt that it's morally wrong - but, if the OP's friend was happy to sign these terms when the contract was first offered I doubt they've got a leg to stand on from a legal perspective.

I can't imagine the client co is fussed either, it's not as if they're losing out financially and they'd want to distance themselves from any legal disputes involving contractors.

[northernladuk]

Isn't the introducer just getting the agent's cut?

Is this a case of your friend being happy with the rate offered and the amount retained when starting the contract and now unhappy because they've worked out how much they're out of pocket by after 5 months?

There is a big difference between an introduction fee and an ongoing rate for (you would expect) services offered. An agent will carry out certain pieces of work such as identity checking and eligibility etc. They also have many other business processes as an agent to carry out. This person does squat. They should have gotten a finders fee and that's that. As to why the friend didn't query this a long time then god only knows what is going on.

[kevpuk]

Hard to believe that £100/day was going to 'introducer'.....harder to believe that this was signed up to......hardest to believe that it has gone on for 5 months/£10k

[GazCol]

Isn't the introducer just getting the agent's cut?

Is this a case of your friend being happy with the rate offered and the amount retained when starting the contract and now unhappy because they've worked out how much they're out of pocket by after 5 months?

[jmo21]

I would be very interested to hear what the client says about that. If I knew someone was taking such a cut from my contractors putting the work at risk because the income to the contractor just isn't worth it I would be livid. No one thought to mention this to the client at all? I would say the 'introducer' is living on borrowed time.

This.

The guy is going to get fired.

[prozak]

Jeesus!

First thing to do is go to the end client!

Chances are your friend will have a contract and the leech wont.

[northernladuk]

NLUK, while I greatly appreciate your post (and your view on the reasonableness of the contract mirrors my own), I suspect I won't take you up on the advice of dropping my friend It's a seriously dorky thing to have done, for sure, however. I can't imagine having signed this or put up with it for several months myself.

I wouldn't describe signing away over 20% of your contract costing over 10k as dorky but I get your point.

PS Apparently the "introducer" has done this with several other people with the same client, and in some cases the contractors report to him - and therefore he would be in a position to recommend their dismissal if they didn't sign or challenge the contract. In all cases the introducer has been in a position of influence over rates, extension offers etc, so I don't believe the negotiating position has been equal for any of them.

I would be very interested to hear what the client says about that. If I knew someone was taking such a cut from my contractors putting the work at risk because the income to the contractor just isn't worth it I would be livid. No one thought to mention this to the client at all? I would say the 'introducer' is living on borrowed time.

[Lambert Simnel]

Hi folks. Many thanks for the replies.

To confirm on a couple of points - yes, it is a contract position, and yes, the agreement is between companies (though as my friend is the director of her company, I would have thought she's ok signing away the company's money).

Sounds like a lawyer is indeed the next step.

NLUK, while I greatly appreciate your post (and your view on the reasonableness of the contract mirrors my own), I suspect I won't take you up on the advice of dropping my friend It's a seriously dorky thing to have done, for sure, however. I can't imagine having signed this or put up with it for several months myself.

PS Apparently the "introducer" has done this with several other people with the same client, and in some cases the contractors report to him - and therefore he would be in a position to recommend their dismissal if they didn't sign or challenge the contract. In all cases the introducer has been in a position of influence over rates, extension offers etc, so I don't believe the negotiating position has been equal for any of them.

[LisaContractorUmbrella]

If the 'introducer' is acting as an agency then they will fall under the Conduct of Employment Businesses and Employment Agencies regulations which do not allow agencies to charge for work finding services - their money is made from taking a margin from the rate charged to the end client - definitely one for a lawyer IMHO

[DirtyDog]

Hi, could do with some advice.
A friend was contacted by someone she had previously worked with about a possible job.

Job or contract role? There is a big difference between the two.

The interview went well, and the previous colleague gave a strong recommendation. An offer came in from the client company, was signed, and work started. The introducer, who had tried to introduce my friend as part of his own consultancy (but wasn't allowed to by the client company) then asked my friend to sign some additional paperwork (hinting that this was required for the job) which was a separate contract charging £100/day to my friend as "introducer fees". Rather idiotically, she signed it without properly reading or digesting it.

5+ months down the line, and she's paid over £10 grand to the "introducer". This appears to have been done entirely without the knowledge of the client company. This seems, to me, to be an unfair contract. The introducer wasn't acting as an agent, and was unlikely to have declared his likely financial interest in the interview candidate to the client company. There was a one-off introduction, for which some recompense is perhaps reasonable (though I've never asked for more than a beer when in the same circumstances) but surely not an ongoing commitment of £100/day to the end of the contract (plus any extensions)?

Sounds like the introducer is trying to act like an agency without actually being an agent. I can't see how it's an unfair contract, though, just because your friend didn't read it properly and doesn't like it.

How equal were the negotiating positions? If they were reasonably equal (eg your friend could have refused the contract or negotiated, being in a position of strength in already having secured the role), then your argument that the contract is unfair falls a little flat. Unfair contracts between businesses are a lot harder to prove than one between business and consumer.

What's the best way of checking the validity (preferably without endangering the contract with the client)? Just take the introducer contract to a lawyer and talk it over with him? Go to the client company's recruiters and ask them for advice? Just take a baseball bat to the introducer's legs?

Advice most welcome.

Speak to a lawyer and find out whether there is anything wrong with the contract. I can't see any benefit of discussing it with the client recruitment people - it's nothing to do with them what other business arrangements your friend enters into.

[northernladuk]

Get a lawyer to look at the contract and find something wrong with it, which if it isn't done properly shouldn't be hard. When the contract has been binned then small claims or sue for some of the money back, accept a reasonable settlement and then move on.

Isn't there a rule limiting unfair contracts and a one element of that is if it is grossly balanced against what is deemed reasonable for the situation. If this is a contract of introduction then I am sure it wouldn't be hard to argue a rolling charge of this amount isn't introduction, it's also supply or something like that. The amounts you are talking about go way and above what would be reasonable for introduction so I am sure the contract can be shown to be in breach.
Depending on the outcome of that I would then follow up and sue for the unreasonable part. I am thinking about the bank charges carry on a couple of years ago that they nearly had to pay them all back as they were deemed unreasonable?

Also you need to be sure on is how they signed it. As a person or as a company (assuming they are a LTD). I am sure if she she signed the clients contract as a limited but this introduction one as a person maybe there is some get out to hide behind the company. You personally and the company are two distinct entities so maybe try argue you that you as a person cannot sign away company income or summat.

Anyway, the upshot is first stop is a contract lawyer. I suspect he will pull this one apart...

I have to say though... what the **** does your friend smoke? It's one thing to not digest a contract properly but if I see £100 a day I would be out of there at that point. There are mistakes and there is signing tulip with £100 a day on it. You don't need to digest it to know you are gonna get screwed. I mean, that would be 25% of most our rates. I cannot believe for one minute alarms bells didn't ring. There is no excuse for doing that...

Secondly... ten ******* K????? 5 months down the line? You are having a laugh... Your 'friend' didn't think to actually do something about this earlier?

Best advice here is drop this friend like a hot coal and get some decent ones IMO. This person is a walking liability.

[Boney M]

I would say it was unfair terms if it was as a introducer. What any of us would need to see would be the contract in its entirety to comment properly.

Me personally I would hand my notice in quick sharp citing issues at home or something so you leave on good terms for a reference and look for a new role

[Lambert Simnel]

Hi, could do with some advice.
A friend was contacted by someone she had previously worked with about a possible job. The interview went well, and the previous colleague gave a strong recommendation. An offer came in from the client company, was signed, and work started. The introducer, who had tried to introduce my friend as part of his own consultancy (but wasn't allowed to by the client company) then asked my friend to sign some additional paperwork (hinting that this was required for the job) which was a separate contract charging £100/day to my friend as "introducer fees". Rather idiotically, she signed it without properly reading or digesting it.

5+ months down the line, and she's paid over £10 grand to the "introducer". This appears to have been done entirely without the knowledge of the client company. This seems, to me, to be an unfair contract. The introducer wasn't acting as an agent, and was unlikely to have declared his likely financial interest in the interview candidate to the client company. There was a one-off introduction, for which some recompense is perhaps reasonable (though I've never asked for more than a beer when in the same circumstances) but surely not an ongoing commitment of £100/day to the end of the contract (plus any extensions)?

What's the best way of checking the validity (preferably without endangering the contract with the client)? Just take the introducer contract to a lawyer and talk it over with him? Go to the client company's recruiters and ask them for advice? Just take a baseball bat to the introducer's legs?

Advice most welcome.