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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 49077
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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I am a contractor working for an end customer at a client

Customer Question

I am a contractor working for an end customer at a client site. I'd like to work in a totally different team in the end customer on a perm basis however my agency in the UK (whom I have a contract with) have a clause which states I cant work for the end customer for 6 months after the termination of my contract unless they consent, and they are refusing to consent as they'd like me to work another 6 month contract extension first. Is there a way out of it?

Submitted: 1 month ago.
Category: Employment Law
Expert:  Ben Jones replied 1 month ago.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

Expert:  Ben Jones replied 1 month ago.

So do you work as a self employed contractor or as a paid employee?

Customer: replied 1 month ago.

Its complicated. I work in the Netherlands and have a management/payroll company. My contract with them doesn't have an issue with this. I'll try to explain it.. So my agency in the UK is C***********s, I work onsite at ***** in the Netherlands for *********** and I'm payrolled by 6*************s have sent me paperwork for a 6 month extension however I don't want to sign it. Its the ****** contract that has the restriction in it.

Customer: replied 1 month ago.

(I am looking at a permanent role with ********* in a totally different job role, hence I'd like their consent/or to not be tied by that restriction)

Customer: replied 1 month ago.
I've attached the specific clause. Does the 50% part of it make it unreasonable /unenforceable? :/
Expert:  Ben Jones replied 1 month ago.

OK, thank you for your response. Leave it with me for now and I will review the relevant information and laws and get back to you at the earliest opportunity. There is no need to wait here as you will receive an email when I have responded. Also, please do not respond to this message as it will just push your question to the back of the queue and you may experience unnecessary delays. Thank you.

Expert:  Ben Jones replied 1 month ago.

Many thanks for your patience. Employment agencies make their money by hiring out workers to end user clients. So if the end user wants to directly employ the worker and therefore bypass the agency’s involvement, the agency would understandably not be too happy about that. They usually try and prevent that by including certain clauses within their contracts (either with the worker or the end user, or both) that prevents this or places restrictions on how and when it can happen, most commonly by introducing transfer fees or penalties (known as temp to perm fees).

As far as the law is concerned, this situation is dealt with under The Conduct of Employment Agencies and Employment Businesses Regulations 2003. They do not prohibit the use of transfer fees but they do place restrictions on how they can be applied.

To be able to charge fee the contract must also have a clause allowing for an extended hire period. Therefore, the end user would have a choice of either continuing to employ the worker for an extended period of time through the agency or pay the transfer fees to employ them straight away.

It is important to note that if 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 after these time limits have passed the end user can do as they wish and they would not be bound by any restrictions from the agency.

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 to end the worker’s obligations to the agency immediately and be able to hire them as soon as possible

2. Continue with the extended hire period and hire the worker through the agency and once that is over to employ them directly

3. Stop using the worker through the agency and wait for the specified 8 or 14 week period to pass before hiring them directly.

I trust this has answered your query. Please take a second to leave a positive rating by selecting 3, 4 or 5 stars above - this is an important part of our process and recognises the time I have spent assisting you. If you still need me to clarify anything else, please reply on here and I will assist as best as I can. Thank you

Expert:  Ben Jones replied 1 month ago.

Hello, I see you have read my response to your query. Could you please let me know if it has answered your original question? You can either reply on here with a quick ‘Yes, thanks’, or select 3, 4 or 5 stars on this page. I can still answer follow up questions if needed to clarify anything for you. Many thanks

Expert:  Ben Jones replied 1 month ago.

Hello, not sure if you are having trouble seeing my posts? Do you need any further assistance or are you happy with the response to your query? I look forward to hearing from you. Thanks