Restrictive covenant

[ukiha2011]

Hello All,

I'm new to this forum but not a new contractor. I have been a contractor on/off for the past 10 years, though I've rarely worked through an agency until recently.

My situation is this:
I am currently with an agency, I am using an Umbrella company.
My client wants to ditch the agency because they're taking a whopping cut c.30% from me and want to reduce their costs. The client tried to negotiate with the agency to reduce this cut without impacting on my rate without success - in fact the agent wouldn't budge (as usual the agency only has their interests at heart), I'm on a low rate as it is, the agent had the cheek to tell me that the client wanted to reduce my rate by 50% but the client told me he wanted to reduce his cut by 50%.

The client has suggested I go through another consultancy they deal with as their resource which they supply me back to the them. I'll be also resigning from the umbrella and operating through my own limited company.

The only paper work I have from the agency is an assignment sheet with no T&C's on it just the client location, billing details etc...

There isn't much from the Umbrella company either.

So will I get caught by this covenant or will it be the client?

thanks for your help in advance.
ukiha2011

[SueEllen]

I was going to give you a long explanation.

In short the restriction should be between the end client and the umbrella company who are your employer.

If the end client decides to do away with the services of the first agency and manages to get you via another agency, then the unless the first agency has something in the contract clearly preventing them from doing this they can't do so.

[Wanderer]

My client wants to ditch the agency because they're taking a whopping cut c.30% from me and want to reduce their costs. The client tried to negotiate with the agency to reduce this cut without impacting on my rate without success - in fact the agent wouldn't budge (as usual the agency only has their interests at heart), I'm on a low rate as it is, the agent had the cheek to tell me that the client wanted to reduce my rate by 50% but the client told me he wanted to reduce his cut by 50%.

So if you work through a different agency, do you get more money or does the client pocket the saving they make? If you are taking a risk by colluding with the client to cut the agent out of the picture then there has to be something in it for you to cover your risks. Get negotiating!

The only paper work I have from the agency is an assignment sheet with no T&C's on it just the client location, billing details etc...

If you are absolutely sure about this then there is no restriction on you that I can see and the restriction is between the client and the agency. If the client is going to come to some arrangement with the agency (or perhaps shaft them) then it's nothing to do with you. That said, don't go telling the agency what you are doing, simply don't enter into any further discussions with the old agent once you've resigned.

For getting set up with a LTD, have a read up on some of the links on the right and then find yourself an accountant (a few of them post here and seem to be well thought of) or join the PCG and they will get you up and running.

[ukiha2011]

Thanks for your responses.

My end client is looking for the paperwork as I am typing this.

Wanderer
- I get a better rate and the client makes a saving.
- The consultancy who I would like to work for will be providing a support contract with the end client. They're going to be taking a small fixed fee just to cover small amount of admin charges.
- My contract ends, end of this month.