Independent contracting---engagement
Many independent contractors obtain their work through third party organisations such as recruitment firms. This model is preferred by many "employers" seeking to engage temporary resources. The manner of engagement is usually a contract between the recruitment firm and the independent contractor. The nature of the engagement is therefore governed principally by the terms of that contract. In almost all cases the terms of the contract are drafted for and on behalf of the recruitment firm.

What this means is that while independent contractors are supposed to be working in a fair arrangement they are in fact operating under the terms prescribed and acceptable to the recruitment firm and, indirectly, the engaging organisation, of their services. Some contractors will have no problem with this as it is generally accepted that the buyer has all the power in any commercial transaction. Or do they?

Most people, as consumers, will be aware that it is in fact the seller of goods and services that have the power in commercial transactions. If you rent a property you sign the contract conditions determined by the landlord (moderated fortunately by legislation), if you want to use a mobile phone you sign the carriers agreement, if you take your car in for service you sign the service centres contract for work carried out. In almost all cases consumers are required to sign an organisations contract if they want to acquire those goods or services. Yet when it comes to providing your services to an organisation you have to sign their contract to sell your services. Surely there is a fundamental inequality in this situation.

Current legislation (the Independent Contractors Act) has shifted the balance for independent contractors back to some extent. The legislation has been tested twice and found in favour of the independent contractors. But the reality is that any independent contractor that uses the Act to protect their rights risks damaging their reputation, and their on going ability to obtain further work. This potentially renders the legislation irrelevant. Moreover, recruitment firms and organisations (including government) are undoubtedly aware of the legislation and are taking steps to ensure that they can avoid it.

In this type of environment, and in the absence of any moderating factors such as a standard form contract for engagement, the only way in which independent contractors can protect themselves is to adopt several simple practices for engagement.

Firstly, draft a set of conditions under which you will provide your services. It does not have to be a lengthy document but should cover all the aspects that you feel might affect your ability to earn an income. Provide that to the recruitment firm or organisation prior to commencement or signing a contract. While it will usually be ignored by the organisation it is at least on record that you have attempted to introduce your conditions for engagement. If you do end up in a dispute before a court the courts will generally look at the bargaining power of both sides, and if it is determined that you attempted to negotiate then this is generally taken into consideration. It also gives you some leverage in the event that a lawyer is engaged to negotiate a settlement.

Secondly, resist signing the contract of engagement prior to commencement. This may sound like a risky strategy but there are several reasons for this. The most important is that you do not want to be bound by the conditions of the recruitment firm before you have had some opportunity to address them What you are really trying to do is ensure that your conditions are operative. If you provide your conditions of service then they are in fact the operative conditions when you commence work. The subsequently negotiated conditions are ancillary to that (although still carry weight as a contract). Many organisations will not want to risk you commencing work without a contract that protects them from you and will generally insist that you sign their contract. You will also have a pressing need to commence work and be paid. In that environment you generally have no alternative but to sign.

But there is an alternative. Under the Fair Work Act s.342 makes it an offence for an employer who "refuses to make use of or agree to make use of services offered by the independent contractor". On the face of it this clause seems absurd in that it would seem ridiculous for an employer to be prosecuted for refusing to provide work. This may be the case in practice (until the clause is eventually tested) but the reality is that if there is an offer of employment (engagement) and some form of acceptance then the recruitment firm and/or organisation faces prosecution if they do not proceed.

The conundrum is how to make sure that there is an intent to proceed without signing the prejudicial contract so that your rights are protected and the work is provided when required. In an environment where independent contractors have little or no real rights under the contracts that they are required to sign the only option is to provide a "letter of intent" which contains your terms and conditions for engagement. This device is often used by consulting firms to protect themselves from clients that are either unwilling or unable to sign a contract of engagement. The letter serves as a contract to commence working without the actual contract in place. With this in place the organisation is legally bound, unless they specifically repudiate the terms of the letter. The letter of intent also serves to prevent the engaging organisation from refusing to proceed as to do so would expose them to prosecution under the Act.

This may all sound calculating but given the current environment in which many independent contractors operate it is necessary to enforce the little rights that they have. Until such time as contracts are mutually drafted and acceptable to both parties then there will always be a winner and a loser to any contractual agreement. Employment law is supposed to have legislation to protect workers rights but the fact remains that the use of those rights in any forum ultimately harms the employee rather than the employer. While the employer may suffer a minor penalty or payment of an employee entitlement they have the final trump card of damaging the employees reputation forever. This is equally applicable to independent contractors.

Of course the alternative is to trust the recruitment firm or engaging organisation and see how you go. But if your income is important then you need to protect it just the same as you would protect any other valuable possession. To simply leave things to chance and trust others with your career is not only foolish but bound to eventually damage you one way or another. The drafting of the documents mentioned in this article is not difficult but if you need assistance there are organisations that can assist - such as this one. Alternatively, give it a go yourself. As a simple starting point take one of the contracts that you have signed with a recruitment firm and consider what you would write to protect your interests. You will end up noticing how prejudicial their contracts are and realise that while you think that being a free independent contractor is the way to go the reality is that it is fraught with danger, unless you do something to protect yourself.

One matter that has recently come to my attention which affects IT contractors is the industry-wide practice of recruitment firms culling applications for positions upon the submission of a CV. I have been personally affected by cases where my CV was rejected with a standard form email in error. What appears to be happening is that the culling is being performed by a receptionist or other junior person simply running a global search tool over a CV and then dispatching a form email. In another instance a junior person "misunderstood" what they were doing and sent the "wrong" standard email. This practice if sending "unsuccessful" emails without any reasoning is common practice across the industry. In most cases the account managers don't even look at CVs submitted for roles.

Unfortunately this sort of conduct has an impact on peoples lives, restrains trade and denies employers of suitable candidates. I would suggest that this conduct warrants significant attention as it is quite obvious that the bar to entry into the "recruitment industry" is exceptionally low. How can someone with no prior career in IT be assessing what an employer requires? It is like someone with no medical career assessing what type of doctor a hospital requires. It may not be a difficult process but the reality is that this filter mechanism is nothing more than guesswork.

Recruiters will assert that they are inundated with applications and are just trying to be more efficient. This is no excuse. The reality is that these organisations operate on a shoe string and hire the cheapest and minimum number of resources to do work that is beyond their capabilities. In the end it is real people that are being affected by their incompetence.

The contractor industry is not one where professionalism is respected. I think that any other professional (Doctor, Barrister, Accountant etc) would be outraged if their extensive and eminent career was treated so flippantly If you can think of any way to approach this issue then please advise. I would think that this needs to be on the agenda of the ICA for action.

If a person applies for a job anywhere the resume/application may trigger an automated response. If the company has ceased taking applications for whatever reason then they may get an automated "unsuccessful" response. The fact that your application was unsuccessful may, or may not, have anything to do with the quality of your resume it may simply be a matter that applications have closed.

From our side of the fence we complain about the number of people who do not fulfill the promise of their resume. I could take to task on the assertions made about recruitment agencies but suffice it to say that they like all of us are subject to the scrutiny of their peers and those who do not realise the expectations of their customers will fall by the wayside.

If you do not wish to work through an agency then don't---the choice is there for you to make.

That's not the half of it. Recruiters take a cut just to find a role and then do nothing. They've stitched up the game so that we can't apply for roles. I have had agents cut my contract to put someone in at less money so they make more profit. Most won't disclose their fees or lie to you. I lost a job because I was $5 too expensive and the agent told me they only had a $15 margin but had $25. As for Arno's comment, how can you justify sending an unsuccessful email? Can't they send an 'applications closed' email? Or close the application process---maybe they need to know how to use IT to do this. I would like to avoid agents, but how? Should I ring around every business and ask it they need someone?

PS Most contractors would love to go direct, but employers don't want to go there. Much easier to go through a recruiter when you want to get rid of them!!!

The Recruitment industry, with few exception, is every bit as poor as it appears.

Firstly there is no minimum criteria to running a recruitment agency. The RCSA (industry body) has no authority over its members or effect on non-members; it simply promotes a code of practice.

Secondly there is no minimum criteria to becoming a recruiter---while it is possible for a non-technically (e.g. IT) trained person to recruit, there is no qualification for recruitment. There is no skill-education career path into recruitment; two key feeders of recruitment staff are administration and industry operators seeking, for example, more family-friendly hours. Looking into standard recruitment company practices, the majority of their functions are administrative not skill-based. Many recruiters base their recruitment selection on "scientific" methods such as behavioural interviewing. Yet those who use these tools do not have behavioural training.

Thirdly, the recruiters' customers are not applicants or contractors. It is not so much that recruitment staff operate on a shoestring, as it is recruitment companies do not dedicate resources to applicants. The organisations they work for are the customers, applicants and contractors are a commodity. While this is no excuse for the discourtesy of a form or cursory response, the logic follows that nothing is owed the applicant either. Complaints about poor recruitment company treatment of applicants has been a loud and long criticism acknowledged by the industry, thus a decision not made to change this is a deliberate one.

Four, the relationship recruiters develop with their customers contribute to removing accountability for equal employment opportunity from both parties. The customer makes a request for staff, the recruiter interprets its preferences. This additional layer of communication incorporates tacit directions, sometimes not even just to filter certain people out, but to allow only certain people to filter in. An article in last week's media reported that applicants with Asian surnames have only one quarter likelihood of being employed compared to a person with an Anglo name.

Unfortunately the promulgation of poor recruitment practices has conditioned a generation of perfunctory applications, and this in turn has lead to an even greater barrier to be erected between recruiters and the applicants. The opportunities are missed by all.

Many of the criticisms made here of recruitment companies may be applied to any employer. Ask any unemployed person about the quality of their responses after submitting job applications. If one applies for a job and doesn't get it for whatever reason then their application, to me, is unsuccessful. It is true that people don't like automated responses---they also don't like automated telephone answering services---sadly this is the way that business cuts costs. We have certainly lost the element of the "personal" and this may well become increasingly so rather than less so and returning to the "old ways".

If companies are choosing to engage recruitment agencies to find their staff, it must be supposed that they are happy to do this and that their needs are being addressed. If this were not so, why would a company approach a recruitment agency? What company would endure poor provision of staff, unsatisfactory staff or inappropriately qualified staff and still retain the services of the recruitment company that supplied them?

I also sense an underlying issue here in the discussion relating to employment and contracting. I might add that if the recruitment company is deploying contractors to "employers" there may begin to develop a grey area in which the contractor may well emerge as an employee. If the person is truly a contractor, then he is protected by whatever contract exists and that he signs. If the contractor contracts within the framework of a contract with escape routes for the hiring company (so that he can be "returned" to the recruitment company when no longer needed)---surely the contractor would have known that from the onset and have agreed to it. Part of being a contractor is the acceptance of the business model and of the risks associated with being in business and with its attendant risks of making a loss. Employees are protected by the laws relating to employment and contractors are protected by the contracts that they enter into ... I would suggest that contractors carefully read and understand the ramifications of any contract they enter into and ensure that they are reasonably happy with its contents---especially the key components.

There seems to be an attempt to tar all recruiters with the same brush and this is intrinsically unfair. There will be good operators and there will be poor operators---you will find them and you will gravitate to the good ones and the others will disappear. This is rather similar to contractors themselves.

Arno raises the issue of independent contractors working under, and being protected by, contract. This is the key issue we are exploring under our Integrity of Contract campaign. We are currently drafting a discussion paper to explore the issue which will be released on our website when finalised.

As the initiator of the thread I must add that my comment was to highlight the deficiencies in the recruitment system. I acknowledged the pressure that the recruitment industry is under but it does itself no favours in a market that predominantly tolerates its existence.

The simple fact is that employers choose recruitment firms because it gives them a degree of separation from legal reprisal. The very existence of the recruitment industry is an affront to a fair and just society. How can the current government claim to champion the rights of employees (and independent contractors) when it allows the sham of the recruitment process to exist. Even the Fair Work Act will be subverted by this sham with many recruiters able to escape under the "small business" exemption. Make no mistake---employers use recruiters to evade the law. When an organisation terminates a contractor's contract who does the contractor take action against? The recruitment firm? Have a look at their contracts which preclude almost every right a contractor might have, and then they can also claim that they didn't terminate the contract---convenient or deliberate? Can we sue the engaging organisation? Nope---privity of contract.

It is risible that this subterfuge can continue without the Government barely raising an eyebrow. Why? Because they want to use the same system to escape the law. The public service thrives on this model as it is the only way that they can eliminate staff without any consequences. The system is a joke and it needs to change but there are no more honourable men going into politics---just narcissistic megalomaniacs. What chance do contractors have under such a system?

Finally, if recruiters are telling the truth and there are hundreds of applications for every job, then why are there only two responses to this issue? As they say, you don't get what you want, you get what you deserve and it is the apathy among contractors that allows parasites to prey on our efforts. If we banded together, then organisations would have to come to us on our terms. If we want the system to improve, WE need to improve it and not rely on the lazy efforts of public servants or the blind eye neglect of politicians. Is the current system what we really want?

The suggestion by Electra that independent contractors band together to tackle the recruiter issue looks like the right way to go. I would add the suggestion that an important strategic priority for the 'banding community' should be to address how to encourage strong, business-level relationships with client enterprises. The current way of doing business through recruiters suggests a low level relationship based on the assumption that the client knows what he or she wants done and is just looking for a competent pair of hands to do the work. It would be in the interests of independent contractors to develop a profile of far more significance.

Of course not all clients will warm to it, but scope will be there in many cases to understand the client's business and see possibilities to bring real benefits, perhaps involving substantial projects. Selling such ideas to the client will require a relationship of trust which includes the maturity to talk about the good of the business up to the CEO. Over time, independent contractors would get work creating measurable value for clients, but beyond that become established in the client's mind as 'partners'. They would be the natural place for the client to turn when help is needed. Why, at that stage, should recruiters even get a look in?

Most of the skills needed to do this could be built up by practice and working together to share experience and review and analyze cases as they arise.

A breathtaking comment ... "The very existence of the recruitment industry is an affront to a fair and just society."

The rub is that contractors are apparently faring very poorly ( according to these observers) under the existing systems with all their failings and yet in spite of this Independent contractors are increasing in numbers and are relatively happy (according to ICA reports).

Should contractors avoid recruitment agencies? I would suggest yes they should. They are not being recruited as such---they are in a different place. Should they sign a contract in which they are not satisfied---no they shouldn't. Does the "economic imperative" force them to sign unsatisfactory contracts---yes it does. The free market is a wild place and the law of the jungle applies. We all wanted this freedom but now we all want protection. We all want income and we all wanted the freedom to choose our terms---but so do the other businesses which engage contractors. It comes down to who needs who the most. We want to shortcut the job finding process by going to recruitment firms but we don't like their terms. Many of us don't want to advertise our services as this costs too much but we still want work. Contracting is a business and must be approached with this model in mind. There are costs and there are risks and both must be assessed and interpreted.

Let's form a union!

I was sent the link to your discussion by a friend of mine, and would like to contribute to the discussion.

I started a blog about 6 months ago to interrogate and challenge the recruitment practises of not only recruitment companies but also direct employers. One post "10 Things We Hate About Recruitment Companies" has been a hotbed of controversy, with recruiters and jobseekers alike engaged in lively debate. I also have a website where jobseekers can download free information (provided by other jobseekers) about the recruitment practises of recruitment companies and direct employers. It's a bit like Choice magazine, but for jobseekers. Interestingly, recruitment companies feature prominently, and usually in the negative sense.

I recently wrote to Julie Mills, CEO of the RCSA asking her to address the concerns of jobseekers who are fed up with being treated so badly, and her response is also included on the blog.

I am also in the process of creating an online survey so that there is empirical evidence regarding the Jobseeker Experience that can be reported and commented on. To date, there has only been anecdotal evidence (albeit lots of it) to back up claims of general mistreatment. Generally, the experience of jobseekers is pooh-poohed as whining/sour grapes by recruitment consultants, so my aim is to provide the market with this information, which will generate real discussions and change. If I could send you the link when it is live for you publicise with your members, I'd greatly appreciate it.

All these "experts" on the recruitment industry seem to think that all recruiters are crooks.... they ought to take a look at some of their brethren before casting stones.

With regards to the vetting of CVs---if the client states a mandatory requirement for a particular hard skill-set and the candidate is lacking these, someone tell me what the crime is if they are excluded. My agency is receiving around 4500 applications per month---many are not even close to spec and others will say that they can upskill....

Sure, there are some dodgy recruiters still out there (I was hoping the new 457 laws would have cleaned out all the Wide-Boy recruiters), with ads clearly copy 'n pasted from corporate sites and harassing candidates for their referee contact details so they can try to get leads. But this is not representative of the entire industry. Personally, I have been in the industry longer than many and have been active in trying to lift the game. I act openly and honestly with clients and candidates and do not mind sharing details of margin and also details of insurances and liabilities that we take on.

Has anyone thought that many firms use agencies to weed out the crap, time-wasting punters who call 4 times a day to check on progress, tell you their life stories and the injustices they suffered, etc, etc.? We insulate the employer and filter out inappropriate candidates.

Well, it's good to see one person supports the idea. Quite simply contractors are commoditized because they have not managed to create a model for representation. Some professions, such as IT are still very young. The legal and medical professions have had hundreds of years to create a model that places sentries at the perimeter of the profession in the form of GPs and solicitors. If you want access to a specialist then you go via a defined route. Employers (probably not an accurate term) can cherry pick all the technical expertise they need and they don't even need to do so directly. The need is there, hence the presence of opportunistic parasites like recruitment firms. Of course there is the option for contractors to merge into consulting firms but this is difficult, costly and ultimately counter-independence. As an example if contract project managers formed a truly representative body then organisations would have to deal with people that understand what the organisation requires rather than the current state of an uneducated guess. Surely this type of system cannot be too hard to create? Or would the ACCC try and break it up as collusive?

As Arno pointed out..."there seems to be an attempt to tar all recruiters with the same brush and this is intrinsically unfair. There will be good operators and there will be poor operators---you will find them and you will gravitate to the good ones and the others will disappear. This is rather similar to contractors themselves." Regardless of how you have found recruiters to be, the way they operate is not going to change any time soon. Which is why there are now a number of alternatives available for all independents to tap into. So on a positive note... In order to assist all independents to not go down the recruiter path, I offer the following three alternatives:

1. Register with a Corporate Talent Agent that specializes in your skill set.

For example, aCE talentNET specialises in matching consulting talent with clients people projects, specialising in the Organisational Development space. By being part of such a network, support to generate projects for yourself revolves around:

• Receiving instant notification of projects seeking specific consultants, either via email or phone.
• Being approached for Key Note Speaking action, in your area of expertise
• Accessing to a Knowledge Bank, with search capability, of the latest ideas/trends in Organisational Development via the regularly updated blog, and eNewsletters on a regular basis
• The opportunity to network with fellow consultants, and to professionally develop your consulting skills
• Providing additional resources to deliver a project of your own

All you bleeding hearts (probably recruiters) that claim there are "good" (define good) and bad operators out there need to get real. Sure you filter (arbitrarily exclude) candidates and negotiate (screw down) potential applicants for your clients but then you sign up (strip legal rights) the candidates. You then do nothing and when the client has obtained what they want and dump the contractors you scurry around for a replacement to keep your margin.

Yes you find jobs for us - oh thank you. Most of the time its nothing more than a poison challis. Alternative is to become an employee and earn half as much and still deal with recruitment firms.

Sounds to me like a no win situation.

Contractors want to earn the best rate for their services. Recruiters want the highest margin for their services. Could this possibly result in a conflict?

Contractor A wants $60 per hour. Contractor B wants $50 per hour. Agent knows business will pay $70 per hour. Guess who gets an interview.

Business now wants to save money. Agent finds Contractor C for $40 per hour. Guess what happens to Contractor B.

Not that hard to work out how the system works.

I'm in the position where I've turned down a contract extension because the Agent won't honour their original commitment. When I was presented for the role we agreed a rate, in writing. When I was offered the role the Agent negotiated me down $6/hr because I wouldn't be in a 'specialist' role. On day one the client placed me in a 'specialist' role, by week 4 I was a team lead of 'specialists', with a happy client. Reaction from the Agent---silence. Before the end of this contract they offered (via phone) a long extension but only +$2/hr which I've refused. I've been ICT contracting for 20 years and I know that I'm asking the correct market rate, so is the client refusing to meet the market or is it the Agent?

I won't be using this Agent again.