View Full Version : New agency regs

4th October 2004, 09:01
So has anyone had to deal with dodgy agents through the new regs yet (like having money illegally with held from you).

Oak, it would be interesting to hear from an agents point of view the impact the new regs have had on them when contractors decide to go direct to the client instead of through the agent. Have you had any dodgy contractors do this yet?



4th October 2004, 11:55
Actually I try to avoid working with contractors at all and in fact have only placed a few. The reason for that is quite simple.

1)Many contractors are more hassle than they are worth (and having been a particularly stroppy one in my time I am well qualified to know:D ).

2)The risk of invoice factoring is too large for the commission charged. To place just 10 contractors, you'd need to cover around £200k before the client paid you some 3 months later.

3)Clients don't seem too interested in allowing fixed price placements (but I am working on this angle). This is pretty much the only way I'd want to work with contractors.

The agency regs are not a problem generally speaking and I agree with some of the clauses like reduced handcuffs although why people claiming to be professional businessmen would feel they need "protection" of this nature when negotiation is the only option for the vast majority of other businesses is frankly beyond me but if your pride can handle it then fair enough.

If a contractor or client tried to bypass me in defiance of the contract then I'd start sending them both invoices for the charges associated with that plus interest. Those invoices, if not paid, would simply increase and I'd hand the whole lot over to a debt collector in both cases.

Because I only try to deal with employees, this would usually not be a problem for me and if I use contractors I'd want to charge a fixed number of hours and therefore this also wouldn't be a problem.

Traditional agencies and contractors have made an utter mess of these regs.

Many contractors believe they smell blood and a chance to get something for nothing but naturally end up with a raw deal for their efforts through either the threat of reduced rates OR terrible contracts (seems to be plenty of evidence of both happening). Of course, the easy way out of the confusion is to sign the opt out and stop trying to beat the sharks at their own game.
Most agencies can't think above the bottom line and so don't even consider 2 things which would make the Regs obsolete without the need for an opt out:-
1)Do fixed price placements.
2)Ensure all contracts specifically state that thge client has no D+C of any nature whatsoever over the contractors.

Contractors and agencies who together fall into the above categories IMO deserve all the hassle and uncertainty that they get because they are both working against each other at the same time.

Interesting aside - REC who are an agency body, send their "consultants" out to agencies to "help them". According to a friend of mine who runs an agency, the guy they sent out apparently offered the following advice:-
"It's all about Sales. Concentrate on commission and making the placement at all costs".
...and that pile of worrying nonsense came from the organisation which regulates the industry:( .

4th October 2004, 12:40
Thanks Oak, btw...what does D+C mean?


Debbie Reinvented
4th October 2004, 19:20
probably Direction and Control .....

I'm sure the guys here will think of plenty of other explanations

5th October 2004, 12:31
D+C does indeed mean Direction and Control.

By the way, had traditional recruitment agencies not been such greedy, unprofessional and unscrupulous cowboys, there would have been no need for these regs in the first place. I'd also have a much easier job, when I talked to clients, if they didn't just assume I was just another one of the pack :rolleyes but such is life :D .

12th October 2004, 12:12
I just had a call from an agency with details of a potential contract. However, they are pretty much insisting (though they say they're not) that I opt out of these regs. They also require me to have Professional Indemnity Insurance, even though I'm a graphic designer and only "publish" sensitive client material if asked to do so by the client. The agency are offering their own insurance!

Should I just walk away from this agency?

Oaksoft - why do you avoid working with contractors? Or did I get the wrong end of the stick?

12th October 2004, 12:37
Are you trying to win a popularity contest Oaksoft.....or perhaps you are trying to compete with threaded :)

12th October 2004, 16:10

you can ask the agent what benefit there is to you in your opting out. There is noting stopping the agent offering you a better rate if you do so, nor in your expecting it.

Can't answer the point about PN. If the client want's you to have it, then the client want's you to have it. Just tell them for now that you'll get quotes elsewhere and see how good their quote is. Be aware that there is a history of bogus companies offering such insurance so cheaper isn't always better.

Oaksoft doesn't like working with contractors for permanent placements. As a long time contractor I can confirm that his concerns are often justified.


13th October 2004, 09:18

You can opt out of the regs now and then when offered the contract you can opt in. I would strongly suggest that you opt back in as this provides protection from dodgy agents (if you opt out you have no come back if they decide NOT to pay you).

They cannot stop you from opting back in...especially not when they have sent you the contract to sign and return to them :)



13th October 2004, 09:37
Hmmm, problem is that for this particular contract, the "hirers" insist on contractors opting out. Big company too, not that I'm naming any names, F*j*tsu. They're a big name, but sometimes they're the worst ones for paying up, aren't they?

13th October 2004, 09:45
I would find it strange that the client was insisting you opt out-it is not their decision to make. The agency isn't allowed to pressure you into opting out, so how can the client get away with it?

Anyone know?

13th October 2004, 10:09
yes, can't see what it is to do with the client. They don't need to know, just tell them that you've opted out even if it's not true. Absolutely nothing to do with them. I guess they may be asking cos' they've got a cosy little relationship with the agency....

13th October 2004, 12:12
"if you opt out you have no come back if they decide NOT to pay you"

I don't understand this claim one little bit.

You are signing a business to business contract for the supply of, in this case, some of your time.

A contract requires both parties to agree to make a 'consideration'. The contractor's consideration is (usually) their time, the agency's consideration is 'payment'. If there is no contractual right to payment, the contract is void for lack of consideration.

But my suggesting that there is no contract is silly, of course there is a contract, so there must be a right to payment (or some other consideration).

The contract may (or it may not) contain specific reasons why you might not get paid. But in the absence of meeting these *previously* *agreed* contractual conditions the contractor has the full right to be paid and can pursue that right through the courts.

This is exactly the same as the opted-in contractor will have to do if he is not paid. The exception being that the contractual conditions that payment will be withheld if (a) the contractor does not supply the necessary signed timesheet or other arbitrary documentation or (b) if the client hasn't paid the agency, are void if they appear in the contract. But other reasons for non payment (such as, if what you deliver doesn't work) may (only may) still be valid.

What is the effect of the non allowed clauses.
(a) there is legal opinion (in one of Egos' FI articles: www.egos.co.uk/Freelanc/freelanc.htm, (http://www.egos.co.uk/Freelanc/freelanc.htm,) can't be bothered to look up which one:-() that such a clause would not stand to scrutiny if challenged in the courts. You have done the work, you've delivered the goods, withholding payment for not delivering a signed timesheet appears to be an arbitrary fine for breach of contract out of proportion with the actual breach and as such is thus void.

(b) This is will probably not stand up to legal scrutiny either, but the far easier way is simply to refuse to accept it in the contract in the first place. You simply do not want to do business with an agency that insists on such a clause, opted in or not.


13th October 2004, 12:18
Dunno either,

ut the legal view appears to be that they have the right to insist on only deaing with opted out contractors if they should so decide.

If they do this, there's zip all that you can do to stop them.


13th October 2004, 12:31
Absolute and utter waddle Tim. Its the agents that are wanting you to opt out not the client. Whether you are opted out or in makes no difference what so ever to the client.

IF the agent is addiment this is the case then get them to put that in writing.

Under the new regs there are specific provisions that prohibit agencies from with holding pay from you. If you opt out you will lose this protection and it will probably cost you more than the money being with held to get it back off the dodgy bastards should they not pay you.

The regs also state that any money paid MUST be paid to you within 10 days and that they cannot make something like signed sheets a condition of being paid.

Once again...you would be a fool to opt out of a contract.


13th October 2004, 12:59
1) I did not say that the clients were insisting on opted out candidates only. Claire said it 5 posts before. All I did was copied it. I agree it is possibly not true, but that is not the point I was making.

2) I agree, your rights to force payment are (slightly) stronger if you opt-in. This is a very very very long way from "opted out you have no come back if they decide not to pay you". A right to be paid after 10 days is worthless if they decide just not to pay you, you still have to go to court to get your money. In any case you've mis-read, the right to payment "is no more than 10 days after the agency have received it", but as they will be paid on 30, 60 or 90 days this is useless to most people. You will want to have contractual rights to payment long before the agency have been paid, opted in or out.

There are good reasons to be opted in: you get some nanny clauses in your contract and some certainty that the job really exists (I wish that I could opt of the rest and keep this)at the expense of the agency being REQUIRED to validate my suitability for the job before being put forward, this not unreasonably IMO equate to the agency following up your references.

There are good reasons to be opted-out. The agency have lower costs and less risk, so they should pay me more. Whether such an expectation is workable in the real world I do not know.


13th October 2004, 14:52
Actually...you dont have to go to court. Your one and only call might be to the Department of Trade and Industry who regulate agents.


ps. Ok...the absolute utter waddle was for Claire :)

13th October 2004, 15:05
Er, thanks for all your opinions. I understand that agencies are not allowed to insist that I opt out. However in this case, they state that their client is insisting on it. Either way, I'm tempted not to go for it. The contract isn't a definite anyway, and they want me to get PI Insurance, which I don't believe I need for the type of work I do. Best to cut my losses and put my efforts into getting other contracts I think.

Thanks anyway. This is the first time I've used this site, and it's been very helpful, and quick responses too. :)

18th October 2004, 23:24
Some of the reasons I steer clear of contractors are stated in an earlier response above.

The other reasons are:-

1)Hassle over IR35 and agency regs.
2)Total lack of respect from both clients and contractors who see you as a pointless parasite.
3)Too much money required up front to pay the contractor.
4)Not enough profit for the risk.
5)Too much insistence on the agency staying in the loop rather than just taking a single fixed fee.

The list is almost endless.

Placing permies is much more pleasant particularly when you interview them as I do.
Clients see the value.
Permies are generally respectful.
Fees are fixed and one-off.

As tim123 says, I also am very skeptical about placing contractors in permy positions for very good reasons but that is quite another subject:D

6th November 2004, 19:41
I was with an agency for 18 months quite happily (c*mputer-pe*ple in dublin), then a new agent turned up and the relationship turned pear-shaped

Her attitude sucked when I asked for some simple IR35 friendly clauses added to the contract extension...none of this was done, and it was one excuse after another

A short time later she declared that my contract was not being extended, even though the support role I was performing in dublin clearly still needed to be performed. But by this time I had enough, and was happy to leave...

After leaving, I found that my last 2 signed and faxed timesheets, had not been paid. When enquiring about these I was sent the following...

"I have made several attempts to contact you both by telephone and by email.
I have received information that you are still on site. Until you clarify the situation I cannot release payment"

Despite not having been contacted at all, I patiently explained EAR in detail, and warned of legal action if payments continued to be witheld. Remember it was the agency that stated the contract was not to be extended.

Despite tantilising promises of payment, tempered with phrases like

"Thanks I'll forward to our legal department. Where are you now working?

I have not received payment, so will be letting loose with the DTI employment agency regulatory team, and legal action on monday (2+ months after the contract ended)

BTW I haven't signed a new contract, as having worked my *ss off for these blood suckers for 2 years, I wanted some time at home !

6th November 2004, 19:45
Interestingly, I found out from my old colleagues, a new contractor has been taken on to perform my old support role

Currently trying to find out if the same agent placed this new contractor

If so, anyone know if this situation is actionable ?

8th November 2004, 10:27
Do you mean that the agency should have offered the role to you in the first place?
I don't think so
They can place whoever they like - as long as the client's happy with their choice.
Now if you can prove that they lied to the client, for example, tell them that you were not willing to work there any more (and provided it isn't true), then maybe you have some sort of case.... but I guess that would be very hard to prove so I doubt you would have a case at all.

Now regarding oervdue payment... of course you have a very strong case there!

8th November 2004, 11:13
Your best bet will probably be the small claims court (county court) but before you do that do get proper legal advice (should cost no more than £100 for the 10-20 minutes of work required from them).

However, this does beg the question...why didnt you ask the client what was going on?


8th November 2004, 21:27
2 years of living out of a suitcase, to-ing and fro-ing between london and dublin every weekend was enough for me

remember also, 2 years ago rates were pretty poor, in all that time the agency never lifted a finger to increase the rate (or if they did it never got passed on)

just happy to be back home now !

However, I'm sure people really want to know how I get on with the DTI, and legal action against these crooks, watch this space...

BTW I hit them with a quote from the "late payment legislation" which allows me to charge 12% on money outstanding, will see if I have a nice little nest egg when this is all over

12th November 2004, 19:13
they coughed up in full...no apology, no offer of another contract elsewhere either LOL

15th November 2004, 11:02
Well its 12% over an entire year...so really you can only ping them 1% each month plus something like £60 collection cost on top of that. Hardly going to make them cough up.

Face it...agents are scum.


15th November 2004, 15:32
you missed the point of my 12% quote

yes I knew the 12% was per annum, but where else can you get anywhere approaching 12% these days ?

but the big issue was that the agency paid up without me going to any real effort. I suspect this was primarily due to the EAR position rather than them feeling sorry for me or being threatened with a 12% per annum charge

15th November 2004, 17:39
But it could have been because they felt sorry for you? :)