Reply to: Suing Agency for Contractual Breach

[northernladuk]

You might be right. But myself, I'm pretty convinced by the initial post and my own recent experience that agencies making IR35-friendly clauses up from nothing is quite widespread.

Though I obviously can't say for sure - only someone who's worked at many agencies dealing with contracts on both sides would be able to quantify at all how common this dishonest behavior is. But the old-timers commenting here already seemed to show little surprise about it...

The fact we've two posts going right now with people commenting that their determination from the agreed situation does not meet the clients expectation would support your view. I also agree.

[CodeDonkey]

I don't think it's that simple. Each contract covers a fixed period of time, e.g. 2012-2014. If the contract specifies RoS, then there is no evidence to the contrary, that the client would have rejected RoS during that contract period. If they had a policy to completely reject RoS, it wouldn't have made it into the contract. Plus the people making the SDS now are probably not the sample people who would have made a RoS call, back during the 2012-2014 period. SDS should really be considered as relevant from the day they come out and forwards, not retrospectively. Even for a current contract, e.g. Bob in HR three months ago may have accepted RoS, but today Peter in HR has done a SDS and decided they won't.

You might be right. But myself, I'm pretty convinced by the initial post and my own recent experience that agencies making IR35-friendly clauses up from nothing is quite widespread.

Though I obviously can't say for sure - only someone who's worked at many agencies dealing with contracts on both sides would be able to quantify at all how common this dishonest behavior is. But the old-timers commenting here already seemed to show little surprise about it...

[krytonsheep]

but for veterans who have always avoided RoS discussions with their clients, the stakes could be considerably higher.

I don't think it's that simple. Each contract covers a fixed period of time, e.g. 2012-2014. If the contract specifies RoS, then there is no evidence to the contrary, that the client would have rejected RoS during that contract period. If they had a policy to completely reject RoS, it wouldn't have made it into the contract. Plus the people making the SDS now are probably not the sample people who would have made a RoS call, back during the 2012-2014 period. SDS should really be considered as relevant from the day they come out and forwards, not retrospectively. Even for a current contract, e.g. Bob in HR three months ago may have accepted RoS, but today Peter in HR has done a SDS and decided they won't.

[CodeDonkey]

Nice to know we were right to say resign before any determination is made

Indeed. And I almost listened... but curiosity killed the cat.

Are you staying or have you resigned?

Legged it. I did entertain the thought of staying with a rate increase and trust that no-retrospective-investigations promise. But the combination of the contract discrepancy and Qdos's response to it made me further appreciate the issue of promises-with-reservations.

[eek]

No I haven't seen their contract, and neither the client nor the agency is willing to share the details of it with me. That's kind of the core of the problem. At this point, there's little else I can do than take the client's claim - that there's no room for substitution in their contract with the agency - at face value. And brace for impact should worst come to worst.

So my conclusion is unless you *are* very assertive about your RoS while on the ground, you are gambling that it's not just something the agency put in on your side to make the contract terms look "IR35-friendly". A very risky thing to do when it can have major consequences and even invalidate your insurance.

Nice to know we were right to say resign before any determination is made

Are you staying or have you resigned?

[CodeDonkey]

Have you seen the agency / end client contract? It's perfectly possible that the existing contract included a RoS clause, all the SDS is showing is what the client wants from April not what the deal is now.

And if the end client wants employees I see no reason for him not have employees - we won't be doing that as I want decent people not just the local "talent" except those we are going to have to train up.

No I haven't seen their contract, and neither the client nor the agency is willing to share the details of it with me. That's kind of the core of the problem. At this point, there's little else I can do than take the client's claim - that there's no room for substitution in their contract with the agency - at face value. And brace for impact should worst come to worst.

So my conclusion is unless you *are* very assertive about your RoS while on the ground, you are gambling that it's not just something the agency put in on your side to make the contract terms look "IR35-friendly". A very risky thing to do when it can have major consequences and even invalidate your insurance.

[eek]

In the same boat here. First-timer who never used the somewhat-fettered-RoS in the contract, and naively figured the agency's contract would be reflected in their terms with the client. Only found out as part of an SDS that the agency had just put that clause in as window-dressing...

Have you seen the agency / end client contract? It's perfectly possible that the existing contract included a RoS clause, all the SDS is showing is what the client wants from April not what the deal is now.

And if the end client wants employees I see no reason for him not have employees - we won't be doing that as I want decent people not just the local "talent" except those we are going to have to train up.

[CodeDonkey]

In the same boat... and Qdos's response to it is the nail in the coffin

In the same boat here. First-timer who never used the somewhat-fettered-RoS in the contract, and naively figured the agency's contract would be reflected in their terms with the client. Only found out as part of an SDS that the agency had just put that clause in as window-dressing...

And pardon if this is derailing the thread a bit, but an additional consequence of being caught in this trap is that everyone's favourite insurance TLC35 will also not go by the agency contract terms, but only consider your actual right of substitution as defined by the client.
A heavy-hearted call to Qdos confirmed this to be the case. That you signed the contract in good faith believing the substitution clause was actually valid has no relevance in Qdos's eyes.

And this is indeed a very different story to what Qdos themselves have been saying over the past years on these forums:

https://www.contractoruk.com/forums/...-each-gig.html

"No, we are just asking whether, to the best of your knowledge, you would be able to send a substitute in reality. Obviously substitution is probably the biggest unknown quantity with IR35, but the statement allows us to pick up anyone who categorically knows they don't have a RoS."

https://www.contractoruk.com/forums/...ml#post2177322

"Some questions - like substitution - are obviously a bit of a grey area and we're simply asking you to confirm they are accurate to the best of your knowledge."

And nope, I don't think anyone will be able to sue Qdos either - because "helpful clarifications" from an anonymous user account here on contractoruk are not the same as the deliberately vague insurance terms written on your insurance papers. But misleading those posts are, no doubt.

Anyhow, those TLC35 customers who like me were unwise to stick around for an SDS will probably have had this more grim clarification from Qdos already.

But those who didn't and haven't questioned their clients specifically about RoS in the past could still be in for a very nasty surprise if the HMRC ever do get in touch with you. If Qdos do not recognise agency contract RoS when a discrepancy is discovered early, I bet they are unlikely to do so during an enquiry as well.

So keep that in mind when planning for the future. At least us n00bs who haven't been contracting too long won't have years of earnings to lose here... but for veterans who have always avoided RoS discussions with their clients, the stakes could be considerably higher.

[Henrik67]

Ah, so your contract says that you have ROS but client have told you no and that you're now wedge between the cheeks of IR35 slowly drifting inwards?

Thanks, that's a fair summary

[Henrik67]

It's your business to run with the proper diligence... will be their argument.

You have to ask yourself why RoS got brought up? If you don't do anything about it it stands as it's there to be used. If you are a bit of a plonker you chat about it with the client and they confirm they won't and you've shot yourself in foot as you know now it's a sham (like PC did). Or did you try use it and client says no in which case, yes, that is a very unfortunate bummer.

Thanks, yeah exactly. It is the elephant in the room no one wanted to mention! It just seems stupid that contracts are worthless

[Henrik67]

Agent is used to putting ROS into contracts to shut whinging permietractors up after qdos tell them so, 99.9% don’t ever use so agent is happy

You are the 0.01%


Sent from my iPhone using Contractor UK Forum

Thanks for the reply. The ROS was in the contract from the off - I had never contracted before so surely it was reasonable to assume the contract had some validity - am I supposed to find someone in the client org to run through the contract T&Cs with?

[northernladuk]

Thanks. It was a theoretical point and I was thinking in regards if a person had to make payments to HMRC could they then sue the agent for misrepresentation. It's a nonsense that the agent isn't on the hook

It's your business to run with the proper diligence... will be their argument.

You have to ask yourself why RoS got brought up? If you don't do anything about it it stands as it's there to be used. If you are a bit of a plonker you chat about it with the client and they confirm they won't and you've shot yourself in foot as you know now it's a sham (like PC did). Or did you try use it and client says no in which case, yes, that is a very unfortunate bummer.

[LondonManc]

Ah, so your contract says that you have ROS but client have told you no and that you're now wedge between the cheeks of IR35 slowly drifting inwards?

[GhostofTarbera]

Suing Agency for Contractual Breach

Thanks. It was a theoretical point and I was thinking in regards if a person had to make payments to HMRC could they then sue the agent for misrepresentation. It's a nonsense that the agent isn't on the hook

Agent is used to putting ROS into contracts to shut whinging permietractors up after qdos tell them so, 99.9% don’t ever use so agent is happy

You are the 0.01%


Sent from my iPhone using Contractor UK Forum

[Henrik67]

Your working practices trump the contract. The contract is between you and the agent. The working practices are with the client. The agents just don't bother doing enough diligence to check the two align. It is what it is and has always been.

You can't sue them as it will cost you many times more than you lost and it's a pretty small technicality. Just not worth the effort. You can cause a fuss and point it out but that will probably be the start of the end of that gig for you.

What losses are you going to sue them for?

Thanks. It was a theoretical point and I was thinking in regards if a person had to make payments to HMRC could they then sue the agent for misrepresentation. It's a nonsense that the agent isn't on the hook