Contracting agencies and "exclusivity" clauses

I

invest-or

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I'm currently IT contracting though an agency (my contract is with the agency). There is a clause in the contract stating that when the contract ends, I cannot work for the same end-client either directly or through another agency for a certain period of time (e.g. a year).

I've heard rumours that due to an EU directive, a new law will come into effect in Ireland soon making such clauses illegal.

I've looked through

Labour Services (Amendment) Bill 2009
http://www.oireachtas.ie/viewdoc.asp?DocID=12946&&CatID=59

Employment Agency Regulation Bill 2009
http://www.oireachtas.ie/viewdoc.asp?DocID=12489&&CatID=59

but can't find anything relating to this issue.

Anyone got any more details (e.g. links) on this?
 
If the clause wasn't there, what would stop you just working for the client directly and the agency would not get their fee?

I would be very surprised if it was illegal.

However, I thought it would be more normal for the agency to have a contract with the client to say that if the contractor worked for them again, then they would pay the agency.

Brendan
 
in the first instance i would bring it to the attention of the client, i'm sure they will not be impressed by this, I have worked in this area and these restrivtive practices are usually frowned upon by clients once they are made aware of them...

From a legal point of view there's nothing illegal abpout putting whatever you want in a contract, question is can it be enforced, now at some levels in Org, these are required but not at the contarcting level, a restrictive clause like this is very hard to enforce as in your situation... the agency would have to issue court preoceedings if you went contracting either direct or through another agency with the same client...if they did would have catostrophic effects on their business IMO...

PM me if you want to discuss in more detail...
 
Sorry if I'm hijacking slightly here, but do you think the situation is similar when a person wants to leave their employer to start their own business and is considering approaching some of their employer's customers that they have worked directly with and built up a strong relationship? Some job contracts state that if you leave their employment you cannot approach customers for a period of few years after.

Does those type of clauses stand up legally?
 
Hi Sartay,

Yes that is different and in my exp very enforceable and have seen companies pursue employees that have done this and get injunctions etc...

saying that it really depends on the nature of the business and what your new entity is offering compared to the employer, however in some business's there are work arounds...
 
This may be the EU directive I had heard about

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32008L0104:en:NOT

Article 6

Access to employment, collective facilities and vocational training

...

2. Member States shall take any action required to ensure that any clauses prohibiting or having the effect of preventing the conclusion of a contract of employment or an employment relationship between the user undertaking and the temporary agency worker after his assignment are null and void or may be declared null and void.
Click to expand...
 
invest-or said:
I'm currently IT contracting though an agency (my contract is with the agency). There is a clause in the contract stating that when the contract ends, I cannot work for the same end-client either directly or through another agency for a certain period of time (e.g. a year).
Click to expand...

To be more precise, my contract says that at the end of say a 12 month contract, I can't work directly for the client for the following 12 months unless I first pay 25% of the agreed remuneration for the 12 months to the agency.

While this would be a big sum of money for me to hand over to the agency, If I got a good rate from the client (e.g. what they are currently paying the agency) I could recoup the money in a year or two (and thereafter be significantly better off), so I may consider that.

But if I did this, and a few months down the line the government passed a law making such "exclusivity" clauses invalid, I would feel a proper chump!
 
Brendan Burgess said:
If the clause wasn't there, what would stop you just working for the client directly and the agency would not get their fee?
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The client almost certainly doesn't want to engage contractors directly. That's why they work through the agency in the first place.
 
Investor,

First of all you have to establish if the client will take you on directly, prob not as Complainer has pointed out, now you could set up a Ltd Company and get the client to engage "them", you'd be crazy to give the agency any money....
 
First of all you have to establish if the client will take you on directly, prob not as Complainer has pointed out, now you could set up a Ltd Company and get the client to engage "them", you'd be crazy to give the agency any money....
Click to expand...

The client is happy to consider enaging my services directly, I've already checked that.

I presume if I did pay a lump sum to the agency, that amount would be a legitimate tax deductible expense? Therefore the maximum amount I'm "risking" is approx half that (at current tax & levy rates).
 
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