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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 48718
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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I am a labour only agency and supply scaffolders to big

Resolved Question:

i am a labour only agency and supply scaffolders to big companies,
can the company poach my agency employees?
should i draw up a terms and conditions about poaching my agency staff and is it allowed
only recently they have been going to the men direct and offering them to go on their payroll.
they are asking my company everyday for the operatives personl e-mails etc
i am registered with the vat cis and hmrc and run everything to the book but this is causing me grief.
they charge me a 10% PROCUREMENT FEE for any equipement they supply plus vat .
Submitted: 1 year ago.
Category: Employment Law
Expert:  Ben Jones replied 1 year ago.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today. Employment agencies like yourself have traditionally been eager to protect the revenue they get from supplying temporary workers to end user clients. They normally do so by including certain "restrictive covenants" or clauses within their contracts to either prevent a contractor from taking up direct employment with an end user, usually for the duration of the contract plus an extended period after termination, or which imposes a substantial fee if they do. The civil courts have on many occasions deliberated whether such "restrictive covenants" are fair and reasonable and there is still no single definitive answer.

Under UK and EU legislation there have been attempts to allow workers to seek employment wherever they choose, without restriction, thus removing any restraint of trade prohibitions. The most relevant piece of legislation in this respect is Regulation 10 of The Conduct of Employment Agencies and Employment Businesses Regulations 2003.

Where a temporary contract between an agency and an end user contains provisions to charge fees in a situation where the worker is taken on by the end user, it must now also provide the option of an "extended period of hire" where the end user client continues to pay the agency margin while engaging the worker directly (or through another agency).

Where there are provisions for the payment of a fee and/or an extended hire period, the Regulations state that they are unenforceable beyond 8 weeks from the termination of the contract (or, if longer, 14 weeks from the start of the contract).

So effectively this creates a situation where an end user client who wishes to employ a contractor directly will have 3 options:

1. Pay the transfer fee stipulated in the contract.

2. Pay the extended hire fee stipulated in the contract.

3. Terminate the contract (presumably with due notice) and wait for the specified 8 or 14 week period to end.

It is up to you if you wanted to include a clause requiring them to pay a transfer fee or extended hire charges and this is all you can realistically impose. You cannot prevent someone from moving to the client but you can potentially get some compensation for it.

I hope this has answered your query. I would be grateful if you could please take a second to leave a positive rating (3, 4 or 5 stars) as that is an important part of our process and recognises the time I have spent assisting you. If you need me to clarify anything before you go - please get back to me on here and I will assist further as best as I can. Thank you

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