Many thanks for your patience. So from what I understand you have been out of contract since October 2015 in a sense that the initial period as per the terms expired and you had not signed another contract in its place. However, you have carried on working with the company, doing the work and invoicing them. The issue with that is you could be seen to have accepted an implied extension of the original contract through your actions. It is not necessary for a contract to have been drawn up and signed for it to be valid, an implied contract could exist simply through the actions of the parties. Therefore, unless you had started doing something completely different for them or the terms under which you worked had changed significantly then it could well be implied that the initial contract had carried on on its existing terms.
In terms of the restriction in the contract, agencies 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 (or transfer the contractor to another agency) 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.
So in your case you may have to wait for 8 weeks from the date of formal termination of contract (on the assumption that it had continued under an implied extension because you continued working under its terms). Saying that the only way for the company to challenge this is to go to court, show that the was still a contract in place, that the restriction was reasonable and that it should apply in the circumstances. They may never go that far, they could threaten you all they want but until they make a claim and win, they cannot do anything to you.
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