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breaktwister
16th February 2017, 00:57
A good idea to draft and present a CoA to a senior resource at the end-client to try and frontrun the ESS tool? Are they still used as I haven't seen much written about them recently?

The idea would be to get the most senior end-client rep (preferably Director or Head of) who has personal knowledge of your working practices, to sign off on the CoA. When the ESS tool is release it may be completed by HR or Legal in most cases due to the risks involved,and if so, and it works out badly, you can argue that the CoA takes precedence. Why wouldn't it if it was signed by someone closest to the the facts?

Of course you might be met with refusal to sign and a lot depends on the governance in place at the end-client and your relationships with the senior resources there, but I think it is worth a shot. I can't see any downside in asking but wanted to post here in case I am missing something.

Template can be found here: https://www.qdoscontractor.com/ir35/ir35-resources

northernladuk
16th February 2017, 02:02
I really don't understand your posts. They appear to start of as a question and then almost end as a statement of fact.

Confirmation of Arrangements are a decent idea for any contract not just PS and it's been done plenty on here so possibly for the main part of the forum.

They are notoriously difficult to get signed the people that know your working practices are not in a position to sign anything for the client and the ones that are don't know your working practices. Get it slightly wrong and it's not worth much.

One other thing just to be mindful of is Right of substitution. If the client isn't actually happy with RoS even though it's in the contract you might blow your own defense if you ask them and they say no. You can use RoS as a defense even if you haven't used it but you believe they would. If you know they won't it means you know the clause is a sham. Sometimes it might be better not knowing possibly?

Plenty of threads on them here.
https://www.google.co.uk/search?q=confirmation+of+arrangements+site%3Aforum s.contractoruk.com&oq=confirmation+of+arrangements+site%3Aforums.cont ractoruk.com&aqs=chrome..69i57.18818j0j4&client=ms-android-samsung&sourceid=chrome-mobile&ie=UTF-8

breaktwister
16th February 2017, 10:23
I really don't understand your posts. They appear to start of as a question and then almost end as a statement of fact.



I'm not a regular forumite so apologies if my posts are hard to follow. To me they make sense and I am surprised at any confusion. What is wrong with posing a question, then going on to give a personal viewpoint therefore inviting discussion?

breaktwister
16th February 2017, 10:29
One other thing just to be mindful of is Right of substitution. If the client isn't actually happy with RoS even though it's in the contract you might blow your own defense if you ask them and they say no. You can use RoS as a defense even if you haven't used it but you believe they would. If you know they won't it means you know the clause is a sham. Sometimes it might be better not knowing possibly?



I see your point but I would rather not be surprised. This is one of the reasons why I would like to front-run the ESS tool. I am through a PSC which has a contract with a recruitment agency and I have no sight of their master agreement with the end-client. If I go to my end-client with a CoA and they say "what do you mean substitution?" I believe I would be entitled to end the contract immediately, claim conflict or other mistake in the commercial contract chain and withdraw before the ESS tool comes out and they run it.

malvolio
16th February 2017, 10:53
I see your point but I would rather not be surprised. This is one of the reasons why I would like to front-run the ESS tool. I am through a PSC which has a contract with a recruitment agency and I have no sight of their master agreement with the end-client. If I go to my end-client with a CoA and they say "what do you mean substitution?" I believe I would be entitled to end the contract immediately, claim conflict or other mistake in the commercial contract chain and withdraw before the ESS tool comes out and they run it.
I, on the other hand, am not. Your contract with the agency is nothing to do with their contract with their customer. OK, there may well be conflicting clauses in between the two - in fact there are in almost all contracts since they are serving different purposes - but that of itself does not void either one. The whole point of a CoA is to document the actual working practices on the ground in the event that such a contradiction appears in a case

And from there it follows that line management won't be allowed to sign them because they will inevitably conflict with the negotiated client/agency contract agreed with the client's procurement team, who in turn will talk to Human Remains rather than the line manager to determine who does what under what circumstances.

So if you want out, start negotiating. Fighting the contract simply won't work

Patrick@Intouch
16th February 2017, 11:04
The only way to agree on an understanding of working practices is to have a conversation about this with the most senior person that you can get hold of.

Obvious problems with conflict between the most appropriate person possibly not being senior enough and a senior enough person not having knowledge of your working practices have been well documented.

Don't forget though, it is the right to substitute, not the fact of ever having done it, which is the pertinent fact here. In this way, working practices can't take precedence over the contract.

Actual working practices that may help though will most likely relate to supervision, direction and control. These are certainly areas that you can discuss and document and should do so in preparation for future conversations about your status.

breaktwister
16th February 2017, 12:02
Don't forget though, it is the right to substitute, not the fact of ever having done it, which is the pertinent fact here. In this way, working practices can't take precedence over the contract.



In Autoclenz the Court of Appeal said "only one party need to claim that a clause in the contract does not reflect their intentions in order for the clause to be considered a sham".

Autoclenz Ltd vs Belcher & Ors (2009) - Brookson Ltd (http://www.brookson.co.uk/knowledge-centre/limited-company/ir35-employment-status/ir35-case-law/autoclenz-ltd-vs-belcher--ors-2009/)

The danger is that, even though a PSC contract with an agency might allow for substitution, the PSC does not know what is in that master agreement between agency and end-client, and regardless of what it actually says, if the end-client decides that it was not really their intention the clause could be regarded as a sham.

breaktwister
16th February 2017, 12:04
In Autoclenz the Court of Appeal said "only one party need to claim that a clause in the contract does not reflect their intentions in order for the clause to be considered a sham".



To me this seems to be a position relevant to employment law only. It cannot possibly be the case in general contract law that one party can simply say "well I didn't really intend that" to escape their obligations under the contract.

breaktwister
16th February 2017, 12:09
In Autoclenz the Court of Appeal said "only one party need to claim that a clause in the contract does not reflect their intentions in order for the clause to be considered a sham".



Sorry for the multiple posts but I would also like to say that sometimes the Court makes statements that are really only applicable to the unique facts of the case before them and cannot be taken as a general statement to be applied to any and all cases. I'm going to have to dig out the actual Court transcripts of this case to consider the quoted statement.

breaktwister
16th February 2017, 12:14
The only way to agree on an understanding of working practices is to have a conversation about this with the most senior person that you can get hold of.



Conversation isn't enough. It doesn't protect you if they put something contradictory into the ESS. CoA needs to be signed or the contract cancelled IMO.

northernladuk
16th February 2017, 12:16
To me this seems to be a position relevant to employment law only. It cannot possibly be the case in general contract law that one party can simply say "well I didn't really intend that" to escape their obligations under the contract.

I see what you are saying and it's been asked a number of times. What happens if the client isn't willing to honour a clause that is in the contract between you and the agent? Bottom line is I don't think it really matters. Once the problem has been identified it's too late. Your IR35 status is in jeopardy. Arguing with the agency over the contract or trying to strong arm the client in to meeting a clause they are likely not to know exists just won't come to anything.

The only time it would be worth entering in to this argument in detail is when you need to use it, they won't let you and you are set to lose a lot of money.. and even then it's going to be so messy it's unlikely to go anywhere.

We are on the back foot anyway to be fair

Speaking to CUK, the former Inland Revenue tax inspector said that, in her experience, "most substitution rights are unrealistic where there is an agency in the middle."

and even Kate says it's becoming less and less of an issue.

Kate Cottrell said: "We are seeing more and more IR35 investigation cases where a claimed substitution clause has simply been treated as one clause amongst many carrying little weight in the [employment] status argument."

Maybe, with it being so problematic and HMIT having such a blanket assumption it should not longer really be one of the main pillars...

breaktwister
16th February 2017, 12:37
The only time it would be worth entering in to this argument in detail is when you need to use it, they won't let you and you are set to lose a lot of money.. and even then it's going to be so messy it's unlikely to go anywhere.



There are risks involved in both approaches. I guess it is up to the individual contractor to assess which risk they want to take. I see the options as:

1) Put a CoA to your client and if they don't sign it you can jump ship immediately. The reason being that this would be an indication that your PSC-to-agency contract is commercially unsound. This mitigates the risk that ESS will be used to attach a determination to your PSC for 16/17 as you won't be under any contract with anyone at the time ESS is released.

2) Just hope ESS determination is not attached to your records at the end-client or agency and if it is that HMRC will never fully investigate and if they do then the end-client somehow back-tracks from their ESS input?

I know which option I prefer.

malvolio
16th February 2017, 13:19
To me this seems to be a position relevant to employment law only. It cannot possibly be the case in general contract law that one party can simply say "well I didn't really intend that" to escape their obligations under the contract.
As an aside, in the SLS case (? where the contract started outside but then was declared inside) the RoS was dismissed by the judge as irrelevant since the client rep - who had no knowledge of the actual details of the engagement - was adamant that it would not be honoured, despite it being in both client and agency contracts. The case wasn't appealed so no precedent set, but it does show that contracts are not necessarily binding.

breaktwister
16th February 2017, 14:39
As an aside, in the SLS case (? where the contract started outside but then was declared inside) the RoS was dismissed by the judge as irrelevant since the client rep - who had no knowledge of the actual details of the engagement - was adamant that it would not be honoured, despite it being in both client and agency contracts. The case wasn't appealed so no precedent set, but it does show that contracts are not necessarily binding.

The problem that we have with this whole shambles is that HMRC want to apply employment law between business entities that have commercial contracts with each other. The recent Finance Bill section that allows this (I am sure there is similar wording in previous Finance Acts) is s61M that instructs Courts to "consider the relationship IF the worker was directly engaged". So you can have a chain of quite legal properly constructed commercial contracts yet the Courts are told to ignore this reality and apply a theoretical assumption. Barking mad if you ask me and quite possibly illegal given that the right to own a business is protected under Article 1 Protocol 1 ECHR

eek
16th February 2017, 14:43
The problem that we have with this whole shambles is that HMRC want to apply employment law between business entities that have commercial contracts with each other. The recent Finance Bill section that allows this (I am sure there is similar wording in previous Finance Acts) is s61M that instructs Courts to "consider the relationship IF the worker was directly engaged". So you can have a chain of quite legal properly constructed commercial contracts yet the Courts are told to ignore this reality and apply a theoretical assumption. Barking mad if you ask me and quite possibly illegal given that the right to own a business is protected under Article 1 Protocol 1 ECHR

That's already been fought and lost with the CIS changes in 1999 and 2005....

breaktwister
16th February 2017, 15:09
That's already been fought and lost with the CIS changes in 1999 and 2005....

I know very little about CIS but am interested in how the A1P1 argument was dealt with. Will do the necessary research.

northernladuk
16th February 2017, 15:24
I know very little about CIS but am interested in how the A1P1 argument was dealt with. Will do the necessary research.

I can't help you are spending too much time looking at complex details that won't really come to anything. It can be interesting yes but will it be useful for your situation?

breaktwister
16th February 2017, 15:38
I can't help you are spending too much time looking at complex details that won't really come to anything. It can be interesting yes but will it be useful for your situation?

Not my personal situation at this time, I will be submitting a CoA to my end-client this afternoon and will see what results.

hollyblue
3rd March 2017, 21:07
I, on the other hand, am not. Your contract with the agency is nothing to do with their contract with their customer. OK, there may well be conflicting clauses in between the two - in fact there are in almost all contracts since they are serving different purposes - but that of itself does not void either one. The whole point of a CoA is to document the actual working practices on the ground in the event that such a contradiction appears in a case

And from there it follows that line management won't be allowed to sign them because they will inevitably conflict with the negotiated client/agency contract agreed with the client's procurement team, who in turn will talk to Human Remains rather than the line manager to determine who does what under what circumstances.

So if you want out, start negotiating. Fighting the contract simply won't work

I have just had my CoA agreed. I've just binned off my current role and was going to sit on the bench for a few weeks over 6.4.17 but agency put me forward for a new PS role, I had interview, they offered the job, I accepted subject to my terms of engagement being agreed, I set out some 13 points covering MOO, D&C and RoS, the agency put them forward and they were agreed by my engager! Job done ? Therefore if the agency is willing to put the terms forward to the engager for agreement one can assume that my terms aren't in conflict with the terms between engager and agency?

Only problem is engager only agreed them up to 6th April as nervous about what the post April 6th world looks like! But its a start, I'm hoping to get my foot in the door for a few weeks before 6.4.17 and then they'll agree them after as well. It also sets out a record for the person completing the tool to work from rather than guessing how I conduct myself.

Not saying its going to work necessarily but if its not agreed / determined outside by 6th April it'll be a short lived placement! Good Luck

jamesbrown
3rd March 2017, 21:19
As an aside, in the SLS case (? where the contract started outside but then was declared inside) the RoS was dismissed by the judge as irrelevant since the client rep - who had no knowledge of the actual details of the engagement - was adamant that it would not be honoured, despite it being in both client and agency contracts. The case wasn't appealed so no precedent set, but it does show that contracts are not necessarily binding.

JLJ.