Non-Contractual Restrictive Covenants

[Teria92]

Hi all - first time poster, wonder if you can help me with this.

I'm employed as a Marketing Consultant in Scotland for Company A. At work, I have a client (Company B) who unexpectedly last week asked me to join them as a permanent employee, rather than as an external contractor. I've had a think about their offer, and I'd like to accept.

I've had a look at my contract of employment with Company A - there are no restrictive covenants which prevent me from working with Company B. However, the Managing Director of Company B has flagged to me that their contract with my employer (Company A) has a term which states that to hire me, Company B would be due to pay my current employer a recruitment fee, equal to my current annual salary - £35,000.

This is unaffordable for Company B. As such, they are now considering withdrawing their offer - meaning I'd need to stay with Company A.

I have some questions:

1) Is such a term enforceable by Company A?
2) Can anyone think of any way around this if not?

Thanks in advance

[atticus]

Q1. Such terms are enforceable. There is nothing "non-contractual" about this. It is a term of the contract between the two companies. Such terms are common: your employer does not want its clients poaching its staff. As to the £35,000, this is a matter between the two companies.

Q2. Can Comany B do some kind of a deal with Company A?

[Teria92]

Thanks! I meant non-contractual in the sense that its not in my own contract - just to clarify! I'm not quite sure if there's a deal to be done - looks like I'll need to revert to Company B.

[Manxman]

It's entirely a matter of negotiation between your employer and the client company. Basically it comes down to how much the client company wants you and how much they are prepared to pay. (I suspect £35k is not actually unaffordable to company B. More likely you aren't worth that much to them. Not trying to be unkind - simply trying to be realistic)

[Teria92]

I mean, to be fair - they only have 8 employees, so I trust them when they say 35k is unaffordable.