Temp to perm fees

[Drbhob]

Hi all

Please help me decipher the following section of my agency employer’s terms and conditions - background:
I’m a Healthcare assistant who used to work under IR35 until the rules changed. Now I have been working in the same company for more than 12 months through an agency, but the company has recently recruited a lot of staff which will soon see agency work drying up.
The company have stated that due to their internal policies, they will not pay agency fees for recruiting my position as they are paying well above the market rate for their own staff, in fact way more than I get paid as an agency carer, which is rare in this industry, hence my attraction to a permanent role with them, along with great training opportunities, pension, insurance and other benefits.
The manager has stated that unless I come to an agreement with the agency which will see me transfer for no fee, their hands are tied. The company is willing to wait ta few weeks for for a reasonable cooling off period but I can’t seem to decipher what that period is from the t&c’s below.
This is what the agencies t&c’s state:-

“In the event that the Client engages on a full-time, part-time or casual basis, be it only for one day, any Temporary Worker supplied within the previous 3 months by the Agency to the Client without informing or gaining consent of the Agency prior to the engagement of the Temporary Worker and the Agency subsequently discovers this fact, the Client agrees that the introduction has been effected by the Agency irrespective of any other circumstances surrounding recruitment of that Temporary Worker by the Client, and the Agency reserves the right to charge the Client a fee of 300 times the Temporary Workers’ hourly charge rate.

6.2 ‘Temp-to-Perm’ In the event that the client engages a temporary worker on a ‘Temp to Perm’ basis, then this will be for a period of 10 weeks, from agreed start date. The client will be charged per hour and invoiced weekly. The charge rate will be the rate that the position is recruited at and will be agreed prior to the ‘temp to perm’ booking. The worker shall be required to work a minimum of 38.5 hours per week over the 10 week period. A separate ‘Confirmation of Assignment’ will need to be signed prior to commencement of any ‘Temp to Perm’ placements. In the event that a client engages a worker on the ‘Temp to Perm’ scheme on a part time basis it must be mutually agreed in writing between the Client and the Employment Business. If the worker then goes full time after the start of and during the duration of the ‘Temp to Perm’ period the Employment Business will charge the Client the minimum charge of 38.5 hours per week for the period previously agreed in writing between the Client and the Employment Business.

‘Temp-to-Third Party’ In the event that the temporary worker supplied to a Client is introduced by the Client to a third party which results in the Engagement of the temporary worker by the third party during the Assignment or within whichever is the longer of either:

• 14 weeks from the start of the first Assignment (each new Assignment where there has been a break of more than 42 days (6 weeks) since the end of a previous Assignment shall also be considered to be the ‘first Assignment’ for these purposes); or

• 8 weeks from the day after the last day the Temporary Worker worked on the Assignment

the Client shall be liable, to pay a Transfer Fee the amount of which is to be agreed between the Employment Business and the Client.”

My questions are,
a) what is the quickest route to taking a perm role without the employer incurring agency fees?
b) do the temp to perm conditions mean that the employer can take me on for a guaranteed 10 weeks through the agency, without them incurring further fees if they take me on after the 10 weeks?

Any responses will be greatly appreciated

 

[NicoJ]

The manager has stated that unless I come to an agreement with the agency which will see me transfer for no fee, their hands are tied.

YOU have no right to discuss terms with the agency in this respect. It is not your contract.

If they want you they would be discussing the contract with the agency. The fact that they won't means that they don't care whether they keep you or not. Sorry to be blunt.

To answer your questions:
a) resign and wait out the 3 months per the contract.
b) yes, but the rate will be negotiated with the agency (they will try their best to recoup the one off fee that they would have charged).

 

[Drbhob]

Thanks, that’s what I thought I understood (re:3 months). I was slightly confused by the 8 weeks and 14 weeks mentioned.
The employer really wants me to stay but as I said, their internal policies will not allow for this payment, they are a charity (my role is not that essential, there’s loads of other people applying for this post as it pays very well for this industry).
They are prepared to either continue to employ me through the agency (at the same rate) while I complete recruitment, or offer it to someone else and terminate me once they have recruited for the role.
My loss really, not theirs.

 

[NicoJ]

Thanks, that’s what I thought I understood (re:3 months). I was slightly confused by the 8 weeks and 14 weeks mentioned.
The employer really wants me to stay but as I said, their internal policies will not allow for this payment, they are a charity (my role is not that essential, there’s loads of other people applying for this post as it pays very well for this industry).
They are prepared to either continue to employ me through the agency (at the same rate) while I complete recruitment, or offer it to someone else and terminate me once they have recruited for the role.
My loss really, not theirs.

The 14 / 8 weeks is if the charity introduces you to a third party (so a supplier for example) who then employs you.
If they want to keep you then they need to speak to the agency. The agency have had 12 months of fees so may be willing to discuss an alternative arrangement to transition you.

 

[Drbhob]

Thanks for your very helpful responses, the Charity has said they will write to the agency proposing they let me go without a fee as a one off gesture of goodwill considering their long standing relationship, considering the fact that the agency has taken fees at an average of 48hrs/week for a year and a half without any real admin costs as I was arranging my own shifts directly with the Charity, and the Charity was providing my training as well.

 

[NicoJ]

Thanks for your very helpful responses, the Charity has said they will write to the agency proposing they let me go without a fee as a one off gesture of goodwill considering their long standing relationship, considering the fact that the agency has taken fees at an average of 48hrs/week for a year and a half without any real admin costs as I was arranging my own shifts directly with the Charity, and the Charity was providing my training as well.

I hope it works out for you. Best of luck.

 

[IanSuth]

Ex recruiter of 27 years here with industry qualifications and who was involved in impleneting the procedures when they came in - the simple way of putting the various bits of legislation is this

Your current place of work have the right to request a free transfer to them subsequent to continuing period of hire at the same rates you are on now (that is enshrined in law)

Your agency is not allowed to place impediments in the way of you moving to permanent employment

The amount of time you have to lay fallow/go somewhere else is 14 weeks from the start of your assignment or 8 from the end whichever is longer - so in your case where you have been there a year it is 8 weeks from when you finish.

So basically either the site/agency come to an agreement over a reduced fee or an extended period of hire at the same rates followed by a free transfer or you leave that site wait 8 weeks then go back free of fee

relevant bits of the law below - i bolded the 14 weeks

The Conduct of Employment Agencies and Employment Businesses Regulations 2003

These Regulations revoke the Conduct of Employment Agencies and Employment Businesses Regulations 1976, the Employment Agencies Act 1973 (Charging Fees to Workers) Regulations 1976 and the Employment Agencies Act 1973 (Charging Fees to Au Pairs) Regulations 1981.

www.legislation.gov.uk

Restriction on charges to hirers​

10.—(1) Any term of a contract between an employment business and a hirer which is contingent on a work-seeker taking up employment with the hirer or working for the hirer pursuant to being supplied by another employment business is unenforceable by the employment business in relation to that work-seeker unless the contract provides that instead of a transfer fee the hirer may by notice to the employment business elect for a hire period of such length as is specified in the contract during which the work-seeker will be supplied to the hirer—

(a)in a case where there has been no supply, on the terms specified in the contract; or

(b)in any other case, on terms no less favourable to the hirer than those which applied immediately before the employment business received the notice.

(2) In paragraph (1), “transfer fee” means any payment in connection with the work-seeker taking up employment with the hirer or in connection with the work-seeker working for the hirer pursuant to being supplied by another employment business.


(4) Any term of a contract between an employment business and a hirer which is contingent on any of the following events, namely a work-seeker—

(a)taking up employment with the hirer;

(b)taking up employment with any person (other than the hirer) to whom the hirer has introduced him; or

(c)working for the hirer pursuant to being supplied by another employment business,

is unenforceable by the employment business in relation to the event concerned where the work-seeker begins such employment or begins working for the hirer pursuant to being supplied by another employment business, as the case may be, after the end of the relevant period.

(5) In paragraph (4), “the relevant period” means whichever of the following periods ends later, namely—

(a)the period of 8 weeks commencing on the day after the day on which the work-seeker last worked for the hirer pursuant to being supplied by the employment business; or

(b)subject to paragraph (6), the period of 14 weeks commencing on the first day on which the work-seeker worked for the hirer pursuant to the supply of that work-seeker to that hirer by the employment business.

(6) In determining for the purposes of paragraph (5)(b) the first day on which the work-seeker worked for the hirer pursuant to the supply of that work-seeker to that hirer by the employment business, no account shall be taken of any supply that occurred prior to a period of more than 42 days during which that work-seeker did not work for that hirer pursuant to being supplied by that employment business.

 

[IanSuth]

Quick extra question comment

As you have been there >12weeks are you getting the same holiday entitlement as the perm staff (you should be) and make sure that if/when you transfer you request to be paid any unused holiday accrued (and ask for the calculation of it to be spelled out in writing)

Many agencies run a policy or only paying that if requested

Any more questions just ask and I will be happy to advise as best i can - for those wondering. At average industry rates an agency makes about the same from a perm fee as from 6 months of temp margin. Obviously temps have a much higher admin overhead in dealing with timesheets/wages/holiday admin and also in finance costs as you tend to be paying out up to about a month before you receive payment. Therefore i would say c8 or 9 months is the point at which you have made your moneys worth as it were.

 

[Drbhob]

I hope it works out for you. Best of luck.

Quick extra question comment

As you have been there >12weeks are you getting the same holiday entitlement as the perm staff (you should be) and make sure that if/when you transfer you request to be paid any unused holiday accrued (and ask for the calculation of it to be spelled out in writing)

Many agencies run a policy or only paying that if requested

Any more questions just ask and I will be happy to advise as best i can - for those wondering. At average industry rates an agency makes about the same from a perm fee as from 6 months of temp margin. Obviously temps have a much higher admin overhead in dealing with timesheets/wages/holiday admin and also in finance costs as you tend to be paying out up to about a month before you receive payment. Therefore i would say c8 or 9 months is the point at which you have made your moneys worth as it were.

Thank you

Very informative and gives me room to wiggle when I try to negotiate.
Especially since Agency have decided to play hardball.
Anyone with suggestions on how to cool the tempers with an offer that will work without a lump sum payment?, as the Charity will not pay this, but are willing to negotiate on an agreeable transition, where the agency (and I) can still earn something without me taking a long cooling off period.
And when is it considered a breach of contract? ie, can I attend the interview before 8 weeks and not be in breach or is it only considered as such if I commence FT employment before the 8 weeks?

Thanks once again for for all your help.

 

[IanSuth]

yes turn around and say

"What period of extended hire on the same terms would be needed for a free temp to perm conversion and can you show us where that is listed in the originally agreed terms of business ?"

Ideally terms should be signed but usually for a temp there is a statement on the timesheet saying something like "by signing this you are agreeing to our published terms of business" so you need to see the set of terms agreed between the charity and the agency. If there is no mention of that extended period of hire then as the law says

(1) Any term of a contract between an employment business and a hirer which is contingent on a work-seeker taking up employment with the hirer or working for the hirer pursuant to being supplied by another employment business is unenforceable by the employment business in relation to that work-seeker unless the contract provides that instead of a transfer fee the hirer may by notice to the employment business elect for a hire period of such length as is specified in the contract during which the work-seeker will be supplied to the hirer

So it needs to state it in the terms and be clear as to the period of extended hire or any solicitor would laugh at them even sending a letter before action.


As for this bit
And when is it considered a breach of contract? ie, can I attend the interview before 8 weeks and not be in breach or is it only considered as such if I commence FT employment before the 8 weeks?

The only thing that matters from a legal standpoint is that there is an 8 week gap before you enter their employment (either direct or via another agy) - you dont need to attend any interview anyway, they know you. The law says that is the trigger. But that is from last day of hire so ENSURE if you go down that route you demand a p45 immediately you stop work and then use the date on that as the beginning of the 8 weeks, if they are being pratts about it i wouldnt put it past them deliberately dating it so by you starting on a particular Monday you are 1 day inside the 8 weeks

PM me the name of the agy and i will see what i know about them

 

[Drbhob]

yes turn around and say

"What period of extended hire on the same terms would be needed for a free temp to perm conversion and can you show us where that is listed in the originally agreed terms of business ?"

Ideally terms should be signed but usually for a temp there is a statement on the timesheet saying something like "by signing this you are agreeing to our published terms of business" so you need to see the set of terms agreed between the charity and the agency. If there is no mention of that extended period of hire then as the law says

(1) Any term of a contract between an employment business and a hirer which is contingent on a work-seeker taking up employment with the hirer or working for the hirer pursuant to being supplied by another employment business is unenforceable by the employment business in relation to that work-seeker unless the contract provides that instead of a transfer fee the hirer may by notice to the employment business elect for a hire period of such length as is specified in the contract during which the work-seeker will be supplied to the hirer

So it needs to state it in the terms and be clear as to the period of extended hire or any solicitor would laugh at them even sending a letter before action.


As for this bit
And when is it considered a breach of contract? ie, can I attend the interview before 8 weeks and not be in breach or is it only considered as such if I commence FT employment before the 8 weeks?

The only thing that matters from a legal standpoint is that there is an 8 week gap before you enter their employment (either direct or via another agy) - you dont need to attend any interview anyway, they know you. The law says that is the trigger. But that is from last day of hire so ENSURE if you go down that route you demand a p45 immediately you stop work and then use the date on that as the beginning of the 8 weeks, if they are being pratts about it i wouldnt put it past them deliberately dating it so by you starting on a particular Monday you are 1 day inside the 8 weeks

PM me the name of the agy and i will see what i know about them

Got it, thank you so much, this has been a great help indeed!
Will feedback outcome.

 

[Drbhob]

yes turn around and say

"What period of extended hire on the same terms would be needed for a free temp to perm conversion and can you show us where that is listed in the originally agreed terms of business ?"

Ideally terms should be signed but usually for a temp there is a statement on the timesheet saying something like "by signing this you are agreeing to our published terms of business" so you need to see the set of terms agreed between the charity and the agency. If there is no mention of that extended period of hire then as the law says

(1) Any term of a contract between an employment business and a hirer which is contingent on a work-seeker taking up employment with the hirer or working for the hirer pursuant to being supplied by another employment business is unenforceable by the employment business in relation to that work-seeker unless the contract provides that instead of a transfer fee the hirer may by notice to the employment business elect for a hire period of such length as is specified in the contract during which the work-seeker will be supplied to the hirer

So it needs to state it in the terms and be clear as to the period of extended hire or any solicitor would laugh at them even sending a letter before action.


As for this bit
And when is it considered a breach of contract? ie, can I attend the interview before 8 weeks and not be in breach or is it only considered as such if I commence FT employment before the 8 weeks?

The only thing that matters from a legal standpoint is that there is an 8 week gap before you enter their employment (either direct or via another agy) - you dont need to attend any interview anyway, they know you. The law says that is the trigger. But that is from last day of hire so ENSURE if you go down that route you demand a p45 immediately you stop work and then use the date on that as the beginning of the 8 weeks, if they are being pratts about it i wouldnt put it past them deliberately dating it so by you starting on a particular Monday you are 1 day inside the 8 weeks

PM me the name of the agy and i will see what i know about them

I asked for a copy of my contract with the agency as I don’t recall having received one, and it now appears they misplaced it and there is no actual signed copy as they have now asked me to sign another one. I am holding off as I’m not sure of the implications and especially their rush to have me sign it given the current standoff.

 

[IanSuth]

I asked for a copy of my contract with the agency as I don’t recall having received one, and it now appears they misplaced it and there is no actual signed copy as they have now asked me to sign another one. I am holding off as I’m not sure of the implications and especially their rush to have me sign it given the current standoff.

Probably a good idea but this is about the contract between the agency and the charity not you and the agency

That is where the extended period of hire clause has to be listed for the temp to perm fee to be enforceable

 

[Drbhob]

Probably a good idea but this is about the contract between the agency and the charity not you and the agency

That is where the extended period of hire clause has to be listed for the temp to perm fee to be enforceable

These are the two clauses referring to temp to perm in their contract with the employer:

6.1 In the event that the Client engages on a full-time, part-time or casual basis, be it only for one day, any Temporary Worker supplied within the previous 3 months by the Agency to the Client without informing or gaining consent of the Agency prior to the engagement of the Temporary Worker and the Agency subsequently discovers this fact, the Client agrees that the introduction has been effected by the Agency irrespective of any other circumstances surrounding recruitment of that Temporary Worker by the Client, and the Agency reserves the right to charge the Client a fee of 300 times the Temporary Workers’ hourly charge rate.

6.2 ‘Temp-to-Perm’ In the event that the client engages a temporary worker on a ‘Temp to Perm’ basis, then this will be for a period of 10 weeks, from agreed start date. The client will be charged per hour and invoiced weekly. The charge rate will be the rate that the position is recruited at and will be agreed prior to the ‘temp to perm’ booking. The worker shall be required to work a minimum of 38.5 hours per week over the 10 week period. A separate ‘Confirmation of Assignment’ will need to be signed prior to commencement of any ‘Temp to Perm’ placements. In the event that a client engages a worker on the ‘Temp to Perm’ scheme on a part time basis it must be mutually agreed in writing between the Client and the Employment Business. If the worker then goes full time after the start of and during the duration of the ‘Temp to Perm’ period the Employment Business will charge the Client the minimum charge of 38.5 hours per week for the period previously agreed in writing between the Client and the Employment Business.

Thanks

 

[Newchodge]

The worker shall be required to work a minimum of 38.5 hours per week over the 10 week period

I can't see that being enforceable. Contracted to work, yes, but forced to work after they have fallen under a bus?

 

[IanSuth]

I can't see that being enforceable. Contracted to work, yes, but forced to work after they have fallen under a bus?

And no where in it is the legally required "elect for an extended period of hire under the same terms"

However equally the clause above would suggest they as an agency expect to make enough £ from a 385 hour booking to allow someone to go perm so as the OP said she has worked for a year, they are going to find it very hard to justify why they feel suddenly in this case they are due a lump sum despite incorrect provisions in their terms and an indication 385 hours is enough

I have the advantage of being pm'd the agency name and have looked through their full terms (helpfully on their website) they do not appear to be a member of any of the professional bodies so there is no easy arbitration service - i think they are some people who have fallen into it and dont know exactly what they are doing.

If you can persuade the charity to take the risk I would get them to say "as you do not have the legally required clause regarding extended hire period in your terms any clause regarding transfer fees is unenforceable as laid out in the Conduct or recruitment agencies and employment businesses regulations 2009" and see what they say

 

[Drbhob]

And no where in it is the legally required "elect for an extended period of hire under the same terms"

However equally the clause above would suggest they as an agency expect to make enough £ from a 385 hour booking to allow someone to go perm so as the OP said she has worked for a year, they are going to find it very hard to justify why they feel suddenly in this case they are due a lump sum despite incorrect provisions in their terms and an indication 385 hours is enough

I have the advantage of being pm'd the agency name and have looked through their full terms (helpfully on their website) they do not appear to be a member of any of the professional bodies so there is no easy arbitration service - i think they are some people who have fallen into it and dont know exactly what they are doing.

If you can persuade the charity to take the risk I would get them to say "as you do not have the legally required clause regarding extended hire period in your terms any clause regarding transfer fees is unenforceable as laid out in the Conduct or recruitment agencies and employment businesses regulations 2009" and see what they say

Result!!!!
Spoke to the Agency and informed them of their options:
A) 8 week cooling off period and I leave for free
B) 8 week extended hire at same rate effective tomorrow
No prizes for guessing which option they chose.
Thank you @IanSuth and all who have contributed.