NSW Employment Law - Contractor Directly for Company - Have to Pay Consultant?

[Anu]

I was working as a contractor for a company through a consultant from 17th Feb 2014 till 11th Dec 2015. During this period, I decided to contract directly with the company. From 12th Dec 2015, I started working directly with the company as a contractor. But, the consultant has complained that as per Australian Employment Law, I cannot work directly with the company and I have to pay 18000 AUD to the consultant. The consultant relies on the clause in the contract (which had an end date of 11th Dec 2015) that I should not enter into any agreement without prior consent from the consultant.

I am not sure on what to do and any guidance from you will be much appreciated.

 

[Sophea]

It depends on the wording of your contract with the consultant: If it states you are not to enter into an agreement without the prior consent of the consultant then you can't during the term of that contract. However, the contract may also extend that obligation for a period of time after the contract with the consultant is finished. That is legal, it is called a restraint of trade clause. Read your contract carefully.

 

[Anu]

There is nothing mentioned about what can be done after the contract end date and I did not terminate the contract early. I started the new contract with the company directly after the old contract got over.

 

[Sophea]

I would think that any restraint of trade that continued beyond the date of the contract would have to be in clear terms stating how long the restraint is in force. Just write back telling him that he is not entitled to his commission because his contract did not specify that you were not to contract with the company after the termination of your initial contract. He might just be trying it on you.