Variable day rate clause

[suityou01]

I never post in any other forum than General. The brainspaks that post in here I actually consider worthy of an opinion.

I ran this clause past 2 people I know that daily deal with contract negotiations and both of them concurred with me that this clause is a problem.

They also said that this was indeed an arse covering clause, but that it was wholy unnecessary in a business to business contract and questioned the maturity of said agency.


To that end the amended wording has been submitted (and agreed) to the effect that :

Any changes to the contract must be submitted as amendements, in writing, and agreed by both parties.
Any amendments may not be retrospective.

This seems to have quelled the fire and been approved by said agency.

Interestingly when this got bounced up to the director of said agency and we had a call on this, he proudly announce they have 250 Ltd company agents on their books. Interestingly, after some digging, approximately 0% of said contractors had this clause in their contracts and I was the first.

This is the same agency that tried to screw me down £30 a day over rate once ClientCo had accepted me as the successful applicant.

So, SimonMac, no, taking Telcos in your pants does not make you a proper contactor.

I believe in the time I have spent on here and on contracting as a whole I may be getting nearer to grazing the arse of being a proper contractor at some point hence.

[Incognito]

Agree with the above, doesn't seem too offensive

No variation of these Terms and Conditions shall be valid unless agreed in writing by a Director of The Pimp

Once signed, you can only agree variation with Director of said pimp.

except that The Pimp reserves the right to reduce the Fees to take account of any additional costs The Pimp may incur in relation to this Agreement as a result of any change in law or regulation or in its interpretation or administration by the English Courts or any regulatory authority (whether or not having the force of law)

Pimp covering its arse, any changes to the law which might cost them money and they'll take it out of your daily fee. As an example, if government suddenly implements a new IR35 replacement which creates the situation that Pimps are now seen as MSCs and you as an employee, then you'll be paying any costs they incur through a reduction in your fees, i.e. their NI contributions.

and to vary this Agreement in order to preserve the tax status of the Consultant Company and the Consultant set out in section (d) below.

You'll be liable for any costs they incur if they can and/or have to amend the contract to take you back outside of the new law to preserve your tax status, i.e. a contractor and not an employee.

That's my reading of it and I don't see that as 'direction and control', it's them minimising their exposure to any potential cost and would only be triggered if there was (a) a major decision against IR35 in the courts or (b) changes to existing legislation.

Disclaimer: The above is only my opinion and you should consult a legal expert before reaching any decision.

[BlasterBates]

I don't see that clause necessarily as a problem. He's allowing additional costs as a result of regulations or the law changing. He would therefore have to pull out a new law somewhere and demonstrate where it got changed, and what the costs were. Not sure why he's put it in, maybe he got a tax demand as a result of a contractor on some dodgy scheme.

So it isn't a carte blanche he's just covering himself from some tax or regulatory demand that he finds he has to deal with.

[minestrone]

Would just tell them straight off that contract is not getting signed.

[SueEllen]

Bad idea to post this in general - this should be in Business/Contracts.

I would get the contract reviewed to get stupid clauses like that removed.

[PSK]

It's usually difficult to be certain commenting on an extract of an agreement but my reading is a bit less worrying around the first part.

They probably don't have "the right to change the T's and C's at any time (including retrospectively) so long as a Director of the pimp agrees the change in writing", rather this part of the Clause is probably intended to manage the risk of one of their lower-ranking employees agreeing an unintended change with you (removing employees ostensible authority). It is probably that any changes the agent's employees and you agree have to be agreed by a Director, rather than the agent's company has complete unilateral power to change anything (which might not ever be legally achievable for a range of reasons).

The second issue does appear to give them the rights with the limitations they set out though 'preserving the tax status' may well be too nebulous a description for them to rely on in the unlikely event this went to court.

I've seen many contracts that go beyond what I'd expect for a business to business contract when contracting as a one person firm and had some difficult negotiations when my last engagement involved a model contract that was many steps too far away from what was acceptable. That said, what you've set out is what I'd want as an agent, given the overall HMRC and legal environment and the use some contractors make of limited companies.

Do you intend accepting it (or have you already) or negotiating with the agent?

good luck.

[DaveB]

Jack it Suity. It's not worth it.

I always make sure I am allowed to add a clause my Anton Lavey which says

'The candidate can do what thou wilt'

Sounds like direction and control to me.

[MarillionFan]

Jack it Suity. It's not worth it.

I always make sure I am allowed to add a clause my Anton Lavey which says

'The candidate can do what thou wilt'

[suityou01]

No variation of these Terms and Conditions shall be valid unless agreed in writing by a Director of The Pimp, except that The Pimp reserves the right to reduce the Fees to take account of any additional costs The Pimp may incur in relation to this Agreement as a result of any change in law or regulation or in its interpretation or administration by the English Courts or any regulatory authority (whether or not having the force of law) and to vary this Agreement in order to preserve the tax status of the Consultant Company and the Consultant set out in section (d) below.

So if I understand this right, they can change the T's and C's at any time (including retrospectively) so long as a Director of the pimp agrees the change in writing.

This not withstanding they can reduce my day rate as well, if there is any change in employment law that causes them to endure additional costs.

Am I being naive here, or should this be a business to business contract and the tax affairs of any employees are only the concern of the business in question and no any concern of the customer (in this case - the pimp)?

Seems very one sided.


Thoughts?