Is this even legal?

[Mejinks]

Good afternoon all, my first time here, so please be gentle.

I have been contracting on and off for a number of years now, and i have never come across this situation before.

Basically, I have just had a conversation with Alexander Mann who have a contract ready and waiting for me, however:

1. They can terminate my contract without notice, whereas I am not allowed to end the contract I HAVE to see it through til the end of October this year
2. I know how much the client is paying them. They are offering a rate which is 40% lower
3. I am not allowed to pick my own umbrella company, I have to use Parasol. They won't allow any different, despite the fact I refuse point blank to deal with them and the way they held back over £800 worth of expenses and then refused to send back my receipts and the distinctly dodgy way in which you get paid with "commission"
4. I have to opt out. There is "no exception to this"

If I don't agree to the above, I don't get the contract. None of the above is legal is it?

[SueEllen]

Good afternoon all, my first time here, so please be gentle.

I have been contracting on and off for a number of years now, and i have never come across this situation before.

Basically, I have just had a conversation with Alexander Mann who have a contract ready and waiting for me, however:

1. They can terminate my contract without notice, whereas I am not allowed to end the contract I HAVE to see it through til the end of October this year

Yes

2. I know how much the client is paying them. They are offering a rate which is 40% lower

Yes

3. I am not allowed to pick my own umbrella company, I have to use Parasol. They won't allow any different, despite the fact I refuse point blank to deal with them and the way they held back over £800 worth of expenses and then refused to send back my receipts and the distinctly dodgy way in which you get paid with "commission"

Yes

4. I have to opt out. There is "no exception to this"

No

If I don't agree to the above, I don't get the contract. None of the above is legal is it?

See my answers in brief.

Full answers are:
1. It's a business contract not an employment contract so the terms can be anything you both negotiate within reason due to case law etc.

2. If you know what the client is paying then negotiate for more money. This can be by informing the client what the agency is paying so the client tells them not to be so greedy. Though the client may just drop you as well as the agency.

3. The agency to safeguard themselves has to check that the umbrella company you are using is legit. If you don't like it then set up your own limited company.

It takes 24 hours to get the pdf through and once you get the paper incorporation certificate through the post, if you have a good credit rating setting up a business bank account can be done that day.


4. If you were met the client before signing the opt-out then it's not valid. It's also not valid if you were forced to sign it. You can either fight with the agency about this however as I suspect there are other clauses in your contract that are more of a problem then your opt-in/opt-out like a clause about going not going direct with the client for a year,which you should deal with.

Finally if there is nothing about the contract you like then hire your own lawyer to draw up a contract you like. If you use the search facility names come up.

[SimonMac]

Is the contract with Barclays by any chance?

[Mejinks]

Many thanks for taking the time to reply Sue Ellen. Could I potentially draw up my own contract and get them to sign it? Im certainly not happy about them taking 40% and I am certainly not happy with being forced to deal with Parasol. To me thats like going into Asda and them telling you that you could only buy own brand stuff and it was double the price. Surely its up to me which umbrella company I use?

[malvolio]

Many thanks for taking the time to reply Sue Ellen. Could I potentially draw up my own contract and get them to sign it? Im certainly not happy about them taking 40% and I am certainly not happy with being forced to deal with Parasol. To me thats like going into Asda and them telling you that you could only buy own brand stuff and it was double the price. Surely its up to me which umbrella company I use?

So you want the job but aren't happy with the rate nor the umbrella nor the agency nor the trading conditions. So why are you considering taking it?

Plan B. Stop faffing around with intermediaries, grow some balls and get your own company. AMS can't argue then. Doesn't help the margin, but if the rate that gets to your bank account isn't acceptable, don't take the job. Moaning about the agency margin is pointless unless you can source your own work.

[jmo21]

2. I know how much the client is paying them. They are offering a rate which is 40% lower

How did you find that out?

[pmeswani]

Surely its up to me which umbrella company I use?

That use to be the case. Not any more. I won't try and justify it, but you have a choice. Either use their preferred Umbrella, or set up a Ltd Company.

[SueEllen]

Many thanks for taking the time to reply Sue Ellen. Could I potentially draw up my own contract and get them to sign it?

You get a lawyer to draw up a contract from their contract and you both negotiate the terms. However the agency can refuse to negotiate but it's unlikely if there is a lawyer involved.

I know some agents actually ring up to check that the redrawn up contract has actually been done by a lawyer before agreeing to negotiate.

Im certainly not happy about them taking 40% and I am certainly not happy with being forced to deal with Parasol.

See other answers

To me thats like going into Asda and them telling you that you could only buy own brand stuff and it was double the price. Surely its up to me which umbrella company I use?

Nope.

If the umbrella company you choose to use goes bust or isn't a legit outfit then the agency ends up dealing with all the tulip.

[Wanderer]

1. They can terminate my contract without notice, whereas I am not allowed to end the contract I HAVE to see it through til the end of October this year
2. I know how much the client is paying them. They are offering a rate which is 40% lower
3. I am not allowed to pick my own umbrella company, I have to use Parasol. They won't allow any different, despite the fact I refuse point blank to deal with them and the way they held back over £800 worth of expenses and then refused to send back my receipts and the distinctly dodgy way in which you get paid with "commission"
4. I have to opt out. There is "no exception to this"

If I don't agree to the above, I don't get the contract. None of the above is legal is it?

It sounds to me like they are making you an offer an inviting you to negotiate. Their opening bid is that it is not negotiable which kind of sets the tone that they want to play hard ball.

So you gotta ask yourself, "Are you willing to turn down the contract offer". If the answer is no then you are in a pretty weak position. You should probably suck it up and get on with it. If you are willing to turn down the contract and walk away then read on...

Firstly, how much of this have they put in writing? Agents are really good at bulltulipting you on the phone (because they can deny the conversation later) but when you ask for written confirmation they get all coy because they are trying to pull a fast one by bluffing you into things. Be very careful here.

1. Make sure there is a force majeure clause in your contract and a right of substitution so you can subcontract it if required. They are setting you up to not get paid (you will be on 30 day payment terms, right?) if you don't complete the contract. I'd be inclined to accept that term but I would also demand to be paid for time worked in the event that I had to terminate the contract. If you are on 30 day terms, make sure you have the right to invoice WEEKLY so your maximum outstanding fees would be 5 weeks rather than 8-9 if you invoice/paid monthly.

2. Then they are taking too much cut, aren't they. I know someone who works through the same agency (albeit on a Preferred Suppliers List) and they take 7%. At very least, you want to negotiate this down to 20%, less if they are on a PSL. Get in there and negotiate, but keep two aces up your sleeve. First, you will walk if they don't agree your terms. Second, tell them you intend to give the client a "courtesy call" to explain that you aren't taking the contract because the agency are demanding a 40% margin on it. These two are the nuclear option, think carefully before you use them but be prepared if necessary. The agent will go utterly ballistic when you suggest that you will contact the client direct, especially if they are on the PSL for the client. It may be that the client know that the agent are taking such a big margin but it's likely that the client wont' be happy about this at all. I think it's only fair that the client know - others will disagree with this.

3. Parasol aren't such a bad brolly really, you could do worse. The agency just want to keep their admin hassle to a minimum so that's why you have to go with the recommended one. Ask them which other brollies are on their PSL, or phone up some other agent and ask - there may be an alternative and they are trying to bully you into using one of a range of options for brollies. But 11 years contracting, you should join the big boys and get a LTD company. If you are put off by the admin then join the PCG who will sort you out with a full package of everything you need and a good accountant. Or talk to one of the accountants who advertise/post here and they will get you set up quick smart and give you some good advice too.

4. This is illegal. I'll bet that they didn't tell you this in writing? I wonder why!! It's because the agent knows that if they got caught doing this then their boss will send them to the gulag for retraining. Go on, email them asking "Can you please confirm our conversation where you told me that the contract is offered on the condition that I opt out of the Conduct of Employment Agencies and Employment Businesses Regulations 2003". Ooooh, they won't like you asking that. I'll bet you have never seen someone back peddle so fast.

[Support Monkey]

[QUOTE=Mejinks;1315774]2. I know how much the client is paying them. They are offering a rate which is 40% lower[QUOTE]

So What? are they paying you enough money to make the contract worthwhile to you, if yes then whats the problem, agreed the markup is high but if it was 5% and your day rate was the same as it is at 40% whats the difference to you, you either negotiate or just accept it, there is also more room for negotiation at renewal time