Is this legally binding

DamoKen

Hi, was talking to a guy I know the other day. He's an IT contractor, arrived recently enough from Poland and started his first contract 3 months back.

It's a government contract that is up for tender every 3 years. The large well known consultancy he was contracting through unfortunately lost the tender this time but fortunately the winning bidders, another large consultancy approached him shortly afterwards asking would he like to stay on?

Here's the tricky part. The Polish guy originally applied for jobs via a number of recruitment agencies and the contract he got was through one of these. This agency apparently has a built in stipulation stating if he goes for the same job with another agency he needs to pay 20% of his annual salary as compensation...for what I'm not really sure as all they did was forward his cv.

They don't actually own the contract directly with the government, in fact they have no involvement at all so it is impossible for them to get him a job there as the other consultancy do not deal with recruitment agencies, they hire directly. So basically, unless he's willing to pay a 5th of his salary to them, they are effectively barring him from taking a job they are unable to offer him in the first place.

My gut feeling is they have no case, nor would be stupid enough to pursue it, but before I tell him to just go for the offer thought I'd double check.

Any advice welcome

Cheers

seamus

My understanding is that he was employed by company A on a fixed term contract, that he obtained through an agency? That contract ended and then he was approached by company B to join them?

The new job is not the "same job". It's the same work, but for a different company. His job with the company the agency originally placed him with, has ended.

So they have no claim over his salary in his new role.

DamoKen

seamus wrote: »

My understanding is that he was employed by company A on a fixed term contract, that he obtained through an agency? That contract ended and then he was approached by company B to join them?

The new job is not the "same job". It's the same work, but for a different company. His job with the company the agency originally placed him with, has ended.

So they have no claim over his salary in his new role.

Hi Seamus, yeah that's it in a nutshell and would have been my understanding as well. Company A no longer has the contract so is unable to offer a renewal, Company B who have no connection with the agency can offer a new contract in the same position.
Therefore I would think the agency has no reasonable claim of a contract broken.

Thanks

Damien

Mr. Incognito

Google Restraint of Trade Clause.

They are generally unenforceable but he will need to take legal advice based on a proper review of the contract

johnnyskeleton

DamoKen wrote: »

Here's the tricky part. The Polish guy originally applied for jobs via a number of recruitment agencies and the contract he got was through one of these. This agency apparently has a built in stipulation stating if he goes for the same job with another agency he needs to pay 20% of his annual salary as compensation...for what I'm not really sure as all they did was forward his cv.

Not giving legal advice but I really dislike this attitude. If they didnt do anything other than forward his CV, why did he agree to pay 20% of his salary to them? Why indeed would he offer them anything other than a fee for what they do for him? It sounds like your friend is withholding significant facts from you, and I would be suspicious of him saying things like "sure they only forwarded my CV"

DamoKen

johnnyskeleton wrote: »

Not giving legal advice but I really dislike this attitude. If they didnt do anything other than forward his CV, why did he agree to pay 20% of his salary to them? Why indeed would he offer them anything other than a fee for what they do for him? It sounds like your friend is withholding significant facts from you, and I would be suspicious of him saying things like "sure they only forwarded my CV"

No, situation is as described. Similar to a role I was in a few years back with a similar clause although not as draconian as with the agency he went through. Lot of toing and froing, initially I didn't want to sign with it left in but I was assured that it was only if I stayed in the same role with a competitor or the client while they still held the contract. Hence looking to see if the same should apply here.

Sum total of that agencies work in getting me the role? Well as I was referred by a mate already there contracting through them they didn't even need to find me. All they had to do was call the client to arrange the interview. After that I got two emails, one to tell me the interview time, and one with the contract once I'd got it. Not one call (or returned call/email to the numerous attempts I made to try and find out what was going on). Think the amount of work he said they did is very very believable in our industry.

As to why he signed? First contract in Ireland, interviewed over the phone from Poland so thought it was standard. If he didn't sign, no job, simple as that.

Was only by chance he even mentioned he was turning down the offer with the new company due to it. As I said he thought this was standard.

/Edit: Just a note on this question "Why indeed would he offer them anything other than a fee for what they do for him?". This isn't how contracting works and something I try not to think about. The daily rate we're offered for a role is not what the client pays. It's what's left after the agency takes their cut. Some are fair, some are downright greedy (know a contractor who found out by accident the agency he was with were taking €150 PER DAY of his rate). Fact remains that no matter how little work they may have done, they will get a cut of your salary every day for the lifetime of your contract. There is no one off finders fee.