Complicated Contract Setup

[smartn]

I started contracting a couple of months ago via an umbrella company. The contract was to be 6 months and operate as follows :-

I signed a contract with an umbrella company.

They in turn signed a contract with a 3rd party (lets say Company B) which I did not see or sign for the assignment I was to complete as the umbrella told me my contract was with them and I didn't need to see or sign any other contracts.

Company B then held a contract with another company Company C.

Company C then held a contract with end client D.

I've been working at the end client for about 6 weeks when I got a phone call from Company B saying they were terminating my contract with a months notice as Company C had terminated there contract with end Client D.


End Client D want to employ me through another company but Company B are saying there is a clause in there contract with the umbrella company restricting me from working through another company for 6 months at End Client D.

I appreciate this seems a very complicated setup but can not understand how if i leave the umbrella company I can be held to a clause they signed which I was never shown or indeed signed up to.

If anyone can

A) Understand what I have actually written here!
and B) Offer some informed advice as to my situation

It would be really very much appreciated.

Alternatively can someone please point me in the direction of a good contract solicitor who is not too expensive (I don't earn a lot by IT contracting standards!)

Many Thanks.

[Crossroads]

To paraphrase and hopefully make it a little more readable, is your setup along the lines of:

You have/had a contract with (are employed by) an Umbrella Company. Your employer has a contract to provide services to another company (B) (perhaps a small consultancy/bodyshop?) that in turn has a contract with C (perhaps a larger bodyshop?) that provides services to the end client (D). Company C has been terminated by the end client, therefore company B no longer has any need for your services.

It probably isn't relevant, but how did you find the role - were you recruited directly by the Umbrella, or by company B?

IANAL but if Company D are willing to take you via a new bodyshop you probably have very little to worry about... but what does YOUR contract with the Umbrella make any reference to not engaging directly or indirectly with the end client?

Exactly what have company B said? Do you want to remain on good terms with Company B?

[jmo21]

Usually there should be a clause that covers this scenario all the way down the chain.

Are you SURE your contract with the brolly doesn't have one?

Also, your contract chain is less complicated/more common than you think eg you-Brolly-Agency-Consultancy-Client

[smartn]

To paraphrase and hopefully make it a little more readable, is your setup along the lines of:

You have/had a contract with (are employed by) an Umbrella Company. Your employer has a contract to provide services to another company (B) (perhaps a small consultancy/bodyshop?) that in turn has a contract with C (perhaps a larger bodyshop?) that provides services to the end client (D). Company C has been terminated by the end client, therefore company B no longer has any need for your services.

It probably isn't relevant, but how did you find the role - were you recruited directly by the Umbrella, or by company B?

IANAL but if Company D are willing to take you via a new bodyshop you probably have very little to worry about... but what does YOUR contract with the Umbrella make any reference to not engaging directly or indirectly with the end client?

Exactly what have company B said? Do you want to remain on good terms with Company B?

Hi,

Reading back what I wrote this morning it could have been clearer. Note to self to not post important things at 1am! Many thanks for your prompt reply.

To answer your questions

Company C wasn't actually terminated by the end client. Company C terminated the contract with the end client hence company B no longer required my services.

I was originally recruited by Company B

Company B are quoting a clause they have in the contract with the umbrella company along the lines that I am not able to work for any company that Company C had dealings with.


'The Consultancy shall not and shall procure that the Consultancy Staff shall not for a period of six months following the termination of the Assignment supply the services of the Consultancy Staff directly, or through any other person, firm or company, to any Client for whom it has carried out the Assignment at any time during the previous six months'

The above clause is from the umbrella companies contract with Company B and nothing I have signed.

I'm never likely to use Company B again so although I wouldn't want to fall out with them and am grateful for them finding me the contract in the first place, it wouldn't be the end of the world if I did upset them.

[smartn]

To paraphrase and hopefully make it a little more readable, is your setup along the lines of:

You have/had a contract with (are employed by) an Umbrella Company. Your employer has a contract to provide services to another company (B) (perhaps a small consultancy/bodyshop?) that in turn has a contract with C (perhaps a larger bodyshop?) that provides services to the end client (D). Company C has been terminated by the end client, therefore company B no longer has any need for your services.

It probably isn't relevant, but how did you find the role - were you recruited directly by the Umbrella, or by company B?

IANAL but if Company D are willing to take you via a new bodyshop you probably have very little to worry about... but what does YOUR contract with the Umbrella make any reference to not engaging directly or indirectly with the end client?

Exactly what have company B said? Do you want to remain on good terms with Company B?

Many thanks for the prompt reply. In answer to your questions :-

The end client didn't terminate. It was actually Company C which is folding. I was recruited by company B. Company B have quoted the following from the contract my umbrella have with them :-

“The Consultancy shall not and shall procure that the Consultancy Staff shall not for a period of six months following the termination of the Assignment supply the services of the Consultancy Staff directly, or through any other person, firm or company, to any Client for whom it has carried out the Assignment at any time during the previous six months.”

I'm changing to operate through a limited company going forward so will have no future relationship with the umbrella.

I do have the following clause in my work assignment schedule for the umbrella :-

'comply with all the obligations imposed on us or on you in the Client contract (including any restriction in the Client Contract affecting your future dealings with the End Client)'

however the client they have is company C which will no longer exist.

[Fred Bloggs]

I am not a lawyer, but I think you will find that is an unenforceable contract restriction. Take legal advice, but I think you'll be saying "see you in court pal". And then go and earn your dollar.

[smartn]

I am not a lawyer, but I think you will find that is an unenforceable contract restriction. Take legal advice, but I think you'll be saying "see you in court pal". And then go and earn your dollar.

Thanks for your post. Do you know of any good (relatively cheap!) law firms I could run it by without the legal bills costing more than I earn!

[Fred Bloggs]

Thanks for your post. Do you know of any good (relatively cheap!) law firms I could run it by without the legal bills costing more than I earn!

I have never used him but many say the man to go to is Roger Sinclair. He trades under the name Egos and is easy to find on Google. Give him a call and see what he reckons.

[smartn]

I have never used him but many say the man to go to is Roger Sinclair. He trades under the name Egos and is easy to find on Google. Give him a call and see what he reckons.

Many thanks. He looks good but £300 + VAT an hour and probably at least two hours work! I'd need to work 6 days to cover that. Anyone with any cheaper options?

[MrButton]

Do you have IPSE membership? They may be able to advise.