IT Contract. Leaving Agency to work direct with client

contract2008

I'm an IT contractor with a limited company.
I work for a client via an agency.
Another director of the ltd company works directly for the client.

My contract with the agency is up for renewal.

Is there any way I can work for the client on contract without going through the agency?

My current contract states that I can't work for the client for 12 months after termination without going through the agency. Is this legal?

If I were to form a new limited company would that make any difference?

On a final note, any chance there is a loophole in the wording of the contract.

... can't work for the client blah blah..."for a period of 12 months from the termination of this contract or the expiry of any subsequent extension to this contract"

The contract has been extend 3 times.

How would the wording above be interpreted?
12 months from the end of the first contract or until the end of any extension (i.e. I'm free now)

or

12 months from the end of the first contract or 12 months from the end of any extension (i.e. I'm stuck with them)

rick_fantastic

will the company be paying your paye and prsi or contracting for your own ltd?

contract2008

rick_fantastic wrote: »

will the company be paying your paye and prsi or contracting for your own ltd?

No, the company won't be paying paye/prsi for me. They will pay a ltd company, either the existing one or if necessary a new one. I would be a director of the ltd company.

Beano

you're stuck with them. I was in the same situation as yourself a few years ago. I'd been contracting somewhere thru an agency and moved to another contract for a few months that i got through a personal contact. WHen that contract ended the original company wanted me back. Luckily for me the agency had stopped trading in Ireland in the meanwhile so i was able to go back to the first company without giving an agency a cut.

ntlbell

if both you and the company keep your trap shut how are they suppose to know?

dodgyme

what % does the average agency take in IT?

contract2008

dodgyme wrote: »

what % does the average agency take in IT?

they're currently taking about 14% for me.

AARRRGH

Is the contract between you and the agency, or your company and the agency?

contract2008

ntlbell wrote: »

if both you and the company keep your trap shut how are they suppose to know?

the agency have had other people work for the company in the past and may try placing others. Couldn't rely on it being kept quiet

contract2008

dublindude wrote: »

Is the contract between you and the agency, or your company and the agency?

Both I guess. I signed it twice, "on behalf of the consultant" (me) and "on behalf of xxx ltd" (me as a director)

AARRRGH

contract2008 wrote: »

Both I guess. I signed it twice, "on behalf of the consultant" (me) and "on behalf of xxx ltd" (me as a director)

Sly feckers!

I recommend you ask this question in this forum: http://www.askaboutmoney.com/forumdisplay.php?f=40

Solicitors read that forum.

DublinWriter

I've been in similar positions myself.

All agencies put that standard clause in their contracts.

The 12 month period it would cover would be from the last day you worked for the agencies' client.

I've yet to hear of any agency suing a contractor for this. I was also told by a solicitor friend of mine that any judge would throw such a case out of court. Take that with a pinch of salt.

Other option might be to work under another umbrella company, but they would be taking a cut so you're back to square one.

The one thing to remember is that in I.T. terms, Dublin is more like a village than a city and everyone tends to know everyone else. You might damage your rep long term with all the agencies as the reps tend to move companies quite a lot.

Typical commission charged by Irish agencies varies from 12% to 30% in some cases. 15% seems to be the norm, in the UK it tends to be 10%.

While I dislike agencies as much as the next person, there's a lot to be said for getting your money in on time. I've worked for several clients directly and trying to get money out of your average Irish SME is like trying to extract blood from a stone.

p15574

I know of a case where this happened and it ended up in the High Court with an attempt at an injunction taken out, very expensive all round - barristers don't come cheap! An agency might want to make an example, to deter other people from doing the same. The legal view was that a 12 month term was 'anti-competitive' and restrictive'. The injunction wasn't given (and this case would now form a precedent), but a settlement was made to avoid a full trial, as the agency had deeper pockets and it had already cost a huge amount by then. Very expensive, and a lot of bad feeling. Subsequently, the agency changed their contracts to, I think, specify 3 months instead. So, there is a school of thought that the term in your contract is excessive - but I'm not sure it's worth fighting over.

Perhaps some middle ground might be to take a contract elsewhere for, say, 6 months, and THEN go back to the client? Still within the 12 months in the contract, but if the 12 month term is illegal anyway, then...

Jo King

There is not much of a precedent in that case if it did not go to a full trial. An injunction will only be given if damages are not an adequate remedy. In the case of an agency the likelihood is that damages would be an adequate remedy, since the payment of money would put them in the position they would have been in, if the contract had not been breached.

contract2008

Thanks for the replies.
Sounds like I'm stuck then.

Nobody thinks the wording of the contract offers a way out?

Its a shame, without the agency it would be worth staying.

flash harry

yeah its a shame you signed a contract under no duress and now want to screw the agency out of their cut, poor you.....

Yes I am a recruiter and this really annoys me - dont use agencies at all if you like but when you make an agreement stick to it or your just pathetic...

Jumpy

A recruitment consultant calling someone pathetic.
Must....stay....calm.

flash harry

Jumpy wrote: »

A recruitment consultant calling someone pathetic.
Must....stay....calm.

haha tarred!!!!!

but seriously, what do people expect on this stuff?? You sign a contract, stick to it or honour the clauses

By the way typically restraints of trade will not be enforced over 6 months

tvr

Although that term is written in your contract and in the case of "gardening leave" and "non complete clauses" although they are written in Irish contracts, its is very hard to enforce these tems under Irish Common Law. Don't get me wrong you would be brought to court probably by your agency and have to pay expenses etc (eg ruling both parties have to pay there own fees) but ask any good barrister they will get you off it no problem.