Reply to: Company in admin and restarted

[Platypus]

True, i did agree to the terms and thats not my point really, if they decide to drop the agency (out of my control) then im left without a job and the agency has lost a contract as i wont work for them again.

The result will be -im out of a job, the company loses an experienced hand (in a tricky sector) the agency wont make any money. The agent wont get the contract back, i cant work for the company for months and the company will pay to find a new person.

Personally I'd go direct (after the company fires the agency) and if the agency finds out (unlikely) tell them to sue you. Since the company fired them, no action on your part lost the agency money so I don't see how they could win.

I'm obviously not a lawyer!

[northernladuk]

Get your client to read their contract with the current agency as if they went into administration and were brought out they are not likely to be the same company. Contacts tend to have clauses which make void in certain cases so it's possible that there is now no valid contract between the client and the agency so need to drop you both immediately.

This then leaves the way for you to go through the new agency.

I've now been with 3 clients who have dropped agencies but have kept the contractors they wanted. In all cases the client stood up to the agency so they didn't bother threatening the contractors once they realised they weren't going to win.

If the old agency is stupid enough to threaten you then a letter from a solicitor will convince them chasing you is a bad idea.

You would have thought when a business is transferred in this situation that part of the sale/transfer would be all existing contracts in place. If it didn't no one would ever be able to buy and sell a company in this situation as everyone from the contractors right down to the landlords etc would just void their contracts and come back with either a new price that is double the old or just bugger off. I bet this is a horrible bit of business law to wade though.

[SueEllen]

Get your client to read their contract with the current agency as if they went into administration and were brought out they are not likely to be the same company. Contacts tend to have clauses which make void in certain cases so it's possible that there is now no valid contract between the client and the agency so need to drop you both immediately.

This then leaves the way for you to go through the new agency.

I've now been with 3 clients who have dropped agencies but have kept the contractors they wanted. In all cases the client stood up to the agency so they didn't bother threatening the contractors once they realised they weren't going to win.

If the old agency is stupid enough to threaten you then a letter from a solicitor will convince them chasing you is a bad idea.

[Craig at Nixon Williams]

True, i did agree to the terms and thats not my point really, if they decide to drop the agency (out of my control) then im left without a job and the agency has lost a contract as i wont work for them again.

The result will be -im out of a job, the company loses an experienced hand (in a tricky sector) the agency wont make any money. The agent wont get the contract back, i cant work for the company for months and the company will pay to find a new person.

It sounds like the only way that the agency stands to make any further profit from either you or the end client is by cutting their margin...I have never had the pleasure of dealing with a recruitment agency so don't know how they negotiate etc. but that surely would seem a logical place to start!

[kal]

True, i did agree to the terms and thats not my point really, if they decide to drop the agency (out of my control) then im left without a job and the agency has lost a contract as i wont work for them again.

The result will be -im out of a job, the company loses an experienced hand (in a tricky sector) the agency wont make any money. The agent wont get the contract back, i cant work for the company for months and the company will pay to find a new person.

How about making the agent an offer to buy out the restriction clause, surely there is room for negotiation here?

[whiskeyfrank]

If it's a phoenix company you might be able to argue that it's a different client, though I'm not sure how well that would work.

It's a bit tough, but at the end of the day, you agreed the terms (as did the client).

True, i did agree to the terms and thats not my point really, if they decide to drop the agency (out of my control) then im left without a job and the agency has lost a contract as i wont work for them again.

The result will be -im out of a job, the company loses an experienced hand (in a tricky sector) the agency wont make any money. The agent wont get the contract back, i cant work for the company for months and the company will pay to find a new person.

[DirtyDog]

I assume that you have opted out? If so, was the opt-out done in writing before you were introduced to your client?

If you are not opted out, or you opted out after you were introduced to the client then the maximum length of a restrictive covenant is much less than 12 months!

Craig

Generally, in this case, there is a more effective restriction on the client changing the agency. Since that would almost certainly bypass anyone trying to claim restraint of trade, it all becomes a moot point.

[Craig at Nixon Williams]

I am not aware of any case law around Opt in/out status yet. Could do with some to clarify the situation once and for all though.

Agreed, there are quite a lot of grey areas where some case law would be useful! Until there is though, the sticky on CUK seems to be a great source of info on opt-in/opt-out!

[VectraMan]

If it's a phoenix company you might be able to argue that it's a different client, though I'm not sure how well that would work.

It's a bit tough, but at the end of the day, you agreed the terms (as did the client).

[Craig at Nixon Williams]

If you're opted out, was it done properly?

12 months is generally unenforceable though. 6 months maybe but it is against some human right to restrict trade for that length of time, particularly when you are doing short term contracts and there is no guarantee you will be needed for that length of time.

I'm no legal eagle but I'd agree with what NLUK has said here, a 12 month clause could easily be seen as a restraint of trade and therefore rendered unenforceable. If the agent is determined to go to town on this though, do you (or your client) really have the inclination to go through this?

It would be interesting to see the view of other contractors who have dealt with difficult agencies in the past...

Craig

[whiskeyfrank]

opted out.

The issue is they agent has been caught charging too much so know they are going to be dropped and replaced with one i have worked with before and to be honest were very good, in know that's unusual!

Now they know they will be dropped they dont care and will go all out to charge a fee for me.

[northernladuk]

I assume that you have opted out? If so, was the opt-out done in writing before you were introduced to your client?

If you are not opted out, or you opted out after you were introduced to the client then the maximum length of a restrictive covenant is much less than 12 months!

Craig

^This which is why I enquired the status. Good luck trying to make it stick though. I am not aware of any case law around Opt in/out status yet. Could do with some to clarify the situation once and for all though.

[Craig at Nixon Williams]

I assume that you have opted out? If so, was the opt-out done in writing before you were introduced to your client?

If you are not opted out, or you opted out after you were introduced to the client then the maximum length of a restrictive covenant is much less than 12 months!

Craig

[northernladuk]

The name/ownership change probably won't affect anything if they decide to take this far enough. They could life the corporate veil and prove it is the same entity in principle so agreements still stand.

12 months is generally unenforceable though. 6 months maybe but it is against some human right to restrict trade for that length of time, particularly when you are doing short term contracts and there is no guarantee you will be needed for that length of time.

I have been in a bun fight between agents and in my case the client sorted out. They obviously have leverage as they can dump the old agent altogether if they don't play ball. Not all clients will be so willing to get involved but it appears to be in their best interests to keep you.

What is your Opt in/out status?

[whiskeyfrank]

No one major its a 200 person sme assembly company in herts.

My contract has a restriction clause which I will go through again. The agent (who is a pain) has told me that if i swap to the new agent they will charge the company and me. They say they will charge them a years worth of profit, i like the business and dont want to see that happen. It may also end up in me losing my contract.

Now..

The company have said that they will have to terminate my contact and replace me with someone cheaper (agency margin, not my rate) if the agent wont let me move, either way im stumped. If they let me go I could start again at the business with a much lower charge out rate. If i cant move i cant work for them for 12 months so the company has no choice.

I have reduced my rate twice already, but the agent has refused to and they dont care they are too big to be bothered.

In effect if i cant move they will replace me, which seems stupid. This is happening real time BTW, just been told this.