15 March 2011

Do your contractors view you as an ally or an enemy?

Last Monday, 7 March 2011, just after 5pm AEDST, you were probably wondering what that very loud noise was that echoed around the country. It was the ‘oh, sh*@' being uttered by every recruitment company owner, manager and temp/contract recruiter who was, at that moment, reading the most recent story posted on the website of recruitment industry news service, ShortList.

The story entitled; Candle case strikes at the heart of recruitment contracts, detailed the Australian Federal Court's decision to rule invalid the restraint clause signed by a Candle ICT contractor preventing her from working directly with a Candle client (Woolworths), with whom she had previously worked at for 15 months as a Candle contractor.

Counsel for the contractor successfully argued that as Woolworths terminated its direct relationship with the contractor, that Candle's restraint, and subsequent actions, were restraining her trade, and in breach of trade practices and contract law, and the Independent Contractors Act.

As the ShortList article accurately states in its opening sentence this is ‘... a case that casts doubt on one of the core elements of virtually every recruitment company's contract with its temps'.

Yikes!

As the ShortList article goes on to say;

' ... the contractor was suing Candle for lost income from an expected six-month contract, as well as potential extensions, totalling more than $400,000. Candle was cross-claiming for lost margins of $4,959.90.

"(The judge has) ... concluded that (the contractor) is entitled to succeed and that Candle's cross-claim should be dismissed."'

The real significance of this case (and potential precedent) can only be understood once a final decision is handed down. Further submissions are due this coming Friday, 18 March 2011.

But one thing I can say for sure; regardless of whatever legal contract you have with your temps and contractors, your business health as a temp/contract recruiter relies upon being viewed by your temps and contractors as their biggest asset in, not barrier to, finding meaningful, ongoing, well-paid contracting work.

People don't take legal action against genuine allies, only perceived enemies.

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