Reply to: Contract Wording

[NHS1979]

Just want to say thanks to Andy for all your help - you're a legend

[MeMeMe1966]

http://forums.contractoruk.com/publi...-client-4.html

post number 34.

[New]

For info,

I've just found the same clause dropped into an updated T&C for suppliers to a UK Uni. (just below the clause that says their determination on IR35 is final.)

Cake and eat it!

[Andy Hallett]

When someone posts their contract wording on here and you recognise it ignore them, as they will be told early in the thread to get it reviewed by a legal advisor.

Though this thread was amusing...

Noted.

[SueEllen]

As always I always value feedback on how we can be a better company.

When someone posts their contract wording on here and you recognise it ignore them, as they will be told early in the thread to get it reviewed by a legal advisor.

Though this thread was amusing...

[Andy Hallett]

Contract Wording

Yeah he's got work managing an agency. He'd put you on to the account managers and drones and you are back to square one.

If you had made that comment a few years ago I might have [secretly] agreed with you.

We've been on a journey the last few years to put our customers at the heart of everything we do. We have introduced an NPS system and things like promotions and appraisals take these scores and comments into account, not just how much cash someone has brought it.

We also have been very careful about the culture we create. This extends to the people we hire, the values we hold and the opportunities we give to our people. This Employer Value Proposition means that we look past the bottom line.

Companies that simply focus on profit will be average. Companies that focus on their customers and their staff are generally the most successful, the profits logically follow. With 5000 U.K. recruitment firms starting each year it is a congested market.

So whilst I agree not everything we do will be perfect, we are closer that when I first started posting on here 4-5 years ago and will continue on that journey. As always I always value feedback on how we can be a better company.

[northernladuk]

Yeah but he's got work managing an group of agencies. He'd put you on to the account managers and drones and you are back to square one. But I know what you mean.

[WordIsBond]

I always go direct, and currently have more work than I can handle. But I'd just like to say that if I'm ever looking to go through an agent or place one of my employees through an agent, this thread, while quite amusing, also makes me think Andy Hallett is the first person I'd contact to see if he's got anything on.

[jamesbrown]

Which strongly implies that the OP should not accept these clauses

That much is given. To a large extent, the question over what is enforceable is a sideshow. You don't really want to get into a position where that needs to be tested. If they agreed only to a re-wording would you then accept it? I probably wouldn't TBH, as a matter of principle. But remember, the current situation with IR35 is that YourCo is ultimately liable and it can take necessary precautions to indemnify itself (if it really wants to). If anything, the new PS rules are more favourable than the current rules if a PSB has deemed a contract outside. It's going to be inherently difficult to reverse that at tribunal, unless the PSB has been negligent (in which case they are liable anyway).

[NomDePlum]

All clauses are enforceable if both sides have agreed to them... It's whether or not they are risky or onerous to one side, in which case they should be negotiated down before signing the contract.

And, as has also been alluded to (if indirectly), the agencies and clients need to protect themselves from the cowboys on our side as well; especially those who prefer not to engage on an out-and-out B2B basis and think they want (or need) things like gentle notice periods and guaranteed work.

Which strongly implies that the OP should not accept these clauses and should ask for their removal surely given Andy's explanation as they seem to be pretty much catch-all.

In the case I asked about specifically (off-payroll) your answer implies that these clauses move the liability from end-client to the Ltd company particularly if there is a similar clause in the higher contract between the end-client and the Agent. Or am I reading this wrong?

If so then pretty scary and not really something that can be explained away by just citing 'Cowboys' as the end-client and agency now have at least as much responsibility in these regards now as anyone.

[jamesbrown]

All clauses are enforceable if both sides have agreed to them... It's whether or not they are risky or onerous to one side, in which case they should be negotiated down before signing the contract.

And, as has also been alluded to (if indirectly), the agencies and clients need to protect themselves from the cowboys on our side as well; especially those who prefer not to engage on an out-and-out B2B basis and think they want (or need) things like gentle notice periods and guaranteed work.

In terms of whether a contract clause is enforceable, it really depends. The courts often "look through" sweeping clauses to establish what the parties really intended. I can look out some case law on this if you want. It isn't enough that both parties sign a contract. To take a simple example, you cannot enforce something that contravenes statute law. To take a more complex example, an indemnity clause or a handcuff clause has a greater risk of being "looked through" if it is written to catch all circumstances or a concrete loss is difficult to identify. That doesn't mean such clauses are completely ineffective, only that they may be re-interpreted by the courts with a much narrower (commercial) scope than the clause originally envisaged. Again, though, I am not a lawyer, just someone who takes a passing interest in the law.

[malvolio]

That sounds like a 'Yes' to also being related to off-payroll liabilities Andy. Am I mis-interpreting that? Also there was a previous comment that alluded to these clauses being pretty ineffective/unenforceable. What's your take o that?

All clauses are enforceable if both sides have agreed to them... It's whether or not they are risky or onerous to one side, in which case they should be negotiated down before signing the contract.

And, as has also been alluded to (if indirectly), the agencies and clients need to protect themselves from the cowboys on our side as well; especially those who prefer not to engage on an out-and-out B2B basis and think they want (or need) things like gentle notice periods and guaranteed work.

[NomDePlum]

As someone alluded to above, these are quite wide and general clauses. This feedback will prompt me to review these clauses to make them more relevant if appropriate.

At this point I will take all of your advice, and now seek qualified legal opinion.

That sounds like a 'Yes' to also being related to off-payroll liabilities Andy. Am I mis-interpreting that? Also there was a previous comment that alluded to these clauses being pretty ineffective/unenforceable. What's your take o that?

[northernladuk]

Perhaps one of the most interesting and insightful posts I have read on this board (Sorry NLUK).
.

[jamesbrown]

Perhaps one of the most interesting and insightful posts I have read on this board (Sorry NLUK).

Since I entered the industry in 1999 not a huge amount has changed in respect of how agencies operate, what has changed is the amount of 'contractors'. Maybe I hark back to days when the internet was all fields, but generally your Ltd company professional was of a specialist nature. What has happened over the years is that contractors have become part of the fabric of some organisations and used as quasi-permanent staff. You've seen a proliferation, along with a convergence on reward.

I suspect your view about having true B2B contracts is one largely lauded by specialist contractors, but would be shunned by many contractors who seek employment style protection (eg Agency Regs) over risk based engagements.

I agree that agencies haven't changed with the times. Last year in the UK there were 5000 agencies set up! The vast majority of these will be treading the tried and tested paths.

My next project, which was delayed by 9 months whilst I led our programme on IR35 Psec changes, is to look at new contracting models and how we can provide these new offerings. As I alluded to in an earlier post, our role is to create a marketplace and supply the demand for skills within it.

It will be interesting to see how it pans out. The competing forces of the gig economy versus the government view of 1970's employment provide an interesting macro-economic challenge as well.

Agree with this too. I think it's all pointing in one direction, in the long-term. The sort of BoS/BAU contracting that has become prevalent in recent years (and I don't say this in a sneering way) is increasingly likely to be filled by FTC or, at least, "employees for tax purposes". On the other hand, consultancy/expert contracts are going to need to be much more tightly formulated with B2B terms (with all associated risks). At the same time, the ability to arbitrage different forms of working are likely to be greatly reduced (which would be fine if it were done in an honest way, i.e. not via "employees for tax purposes").