Contractors' Questions: Can agents take a fee for direct work?

Contractors' Questions: I have received the terms and conditions for my first IT contract. The following clause bothers me: "The Supplier shall not during the Contract Term ... either directly or indirectly ... provide any services to the Client or End User in any capacity except by contract through the Agency unless the Supplier shall first have paid to the Agency a fee of 20% of the total remuneration ..." Is it legal, or at least fair, to expect the contractor to pay a fee to the Agency if the Client engages him independently?

Expert's Answer: As you say, this is a recruitment fee and it is certainly more usually for an employer to pay such a fee.

Having said this, there is nothing legally wrong with the clause; it gives you the choice either to continue working through the agency or pay the recruitment fee.

I suggest you go back to the agency and negotiate on this point. They might agree to change this clause to the Client paying the fee, or alternatively agree to reduce the amount of the fee.

If they refuse to amend it, you will have to choose whether to sign up with this agency or go to another if your intention is to look for a full-time job in the long run.

The expert was Gary Cousins, a solicitor at legal advisors Cousins Business Law.


Thursday 8th Jul 2010
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