Why is a covering agreement important for self-employed people?

Many organisations use covering agreements to make collaboration with suppliers and service providers more efficient and manageable. But why is a master agreement important for self-employed people? What does it mean for your chances of getting assignments, your rates and your flexibility? A master agreement can affect the way you work and how you win assignments. In this article, we explain how this type of contract works, its advantages and points of interest, and how you can make the most of it as a self-employed person. So you know exactly what to look out for and how to make the best choices for your business.

What does a covering agreement mean?

A covering agreement is a framework contract that serves as the basis for a long-term cooperation between a client and a number of intermediaries or brokers. Instead of entering into agreements directly with individual contractors, a client enters into a framework agreement with a limited number of parties. These intermediaries then apply their own general conditions and can impose conditions from the master agreement on self-employed persons or other suppliers they work with.

This means that as a self-employed person, you do not enter into a master agreement directly, but you can be part of a network of suppliers through an intermediary or broker. Think, for example, of a large organisation selecting a limited number of parties as preferred suppliers for future projects without already knowing exactly what assignments are coming.

The difference from a ‘normal’ agreement

The major difference between a covering agreement and a ‘normal’ assignment or service agreement is in the scope. A normal agreement contains one specific assignment, with concrete details about the work, rates and deadlines. With a master agreement, only general terms and conditions are agreed between the client and the intermediary. The freelancer then receives a separate assignment through the intermediary, to which his own terms and conditions apply.

Advantages of a covering agreement for self-employed persons

The chance of an ongoing working relationship is perhaps the biggest advantage. Because intermediaries have long-term partnerships with clients, this increases the likelihood of you winning regular assignments. This ensures a more stable income stream. You need to spend less time on acquisition and you can focus more on executing the assignments.

Because the basic agreements are already established between the client and the intermediary, you as a self-employed person need to spend less time drafting contracts. You get an assignment under the intermediary's terms and conditions, which means you can start the assignment faster.

Clear frameworks

A covering agreement provides clear frameworks within which the cooperation takes place. This ensures more transparency about what you can expect from the intermediary and indirectly from the client. Clear agreements on, for example, exclusivity, liability and deadlines give you peace of mind as a freelancer that few misunderstandings will arise.

Stronger relationships with clients

When you are part of a covering agreement through an intermediary, you can get easier access to assignments from large organisations. This gives you the opportunity to build long-term relationships and prove yourself as a reliable contractor. By delivering consistent and quality work, you increase your chances of getting repeat assignments.

Do pay attention to set rates

One point of interest in a covering agreement is that the rates are often fixed for the entire term. Because you as a self-employed person are not directly part of the covering agreement, intermediaries can set their own conditions, including margins on your rates. It is important to agree on indexation or revision of rates during negotiations with the intermediary so that your rate stays in line with the market.

Some intermediaries have exclusivity clauses stipulating that you work exclusively for their clients for a certain period of time or that you cannot take orders from competitors. This can limit your flexibility and affect your overall order portfolio. Therefore, make sure the conditions around exclusivity are clear and that there are clear agreements on any compensation, such as a minimum number of guaranteed hours or a fixed amount per assignment.

Assignment guarantee

A covering agreement increases the chance of recurring assignments, but this does not mean that you automatically receive a minimum number of hours or assignments. The intermediary depends on the client's demand and cannot always guarantee that you will get enough work. Therefore, be alert to the contractual arrangements and make sure that a minimum purchase is included in the agreement with the intermediary, if applicable.

Risk of false self-employment

A covering agreement, if not carefully drafted, can give the impression that you are in an employment relationship, while you officially remain self-employed. This can have tax and legal consequences. It is therefore important that, as a self-employed person, you always keep your own business operations, for instance by making your own investments, determining your own working hours and not being completely dependent on one client or intermediary.

Always be proactive

Once you are included in a covering agreement through an intermediary, this does not mean you can sit back. Keep actively looking for new assignments within the framework of the agreement. Keep an eye on the intermediary or client's internal systems or platforms and always submit a proposal or offer in time. Active communication and regular follow-ups can ensure that you rise to the top of the list of chosen contractors.

Also invest time in building strong relationships with staff at both the intermediary and the client, such as the procurement department, project managers and other stakeholders. By presenting yourself as a reliable and knowledgeable partner, you increase the chances of being the first to be approached for new assignments.

Let your rates rise with quality

Negotiate rate revisions based on inflation or changing market conditions from the outset. Make sure your rate model is flexible enough to move with your expertise and the market. Arrange this in advance so that you are not stuck with outdated rates while your value as a professional grows.

Consider seeking legal advice before signing a contract through an intermediary. A lawyer specialising in self-employed contracts can help you avoid pitfalls, understand the terms and ensure your self-employed status is not compromised. This will give you extra security and protect your long-term interests.