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1️⃣ Purpose of Clause 6.3
This clause is aimed at maintaining professional boundaries and preventing conflicts of interest between the Contractor and Employer (and vice versa) by prohibiting “poaching” of personnel. It ensures continuity and fairness in human resources across the project.
- 1999 Edition: Focuses solely on preventing the Contractor from recruiting the Employer’s staff.
- 2017 Edition: Introduces mutual restrictions, where both parties (Contractor and Employer, including the Engineer) are forbidden from recruiting from each other’s personnel.
🔁 Evolution from 1999 to 2017:
- The update reflects a fairer, more balanced approach.
- Prevents resource destabilization from either side, which is especially relevant in large-scale infrastructure projects.
2️⃣ Breakdown of Clause 6.3
📘 FIDIC Yellow Book 1999 – Clause 6.3: Persons in the Service of Employer
“The Contractor shall not recruit, or attempt to recruit, staff and labour from amongst the Employer’s Personnel.”
✅ Clear Obligation: Only the Contractor is restricted.
📗 FIDIC Yellow Book 2017 – Clause 6.3: Recruitment of Persons
“The Contractor shall not recruit, or attempt to recruit, staff and labour from amongst the Employer’s Personnel.
Neither the Employer nor the Engineer shall recruit, or attempt to recruit, staff and labour from amongst the Contractor’s Personnel.”
✅ Mutual Obligation: Balanced restriction on both parties.
3️⃣ Key Interpretations and Implications
📌 Key Takeaways:
- Mutual non-poaching rule in 2017 ensures workforce stability.
- Reflects growing emphasis on HR ethics and project harmony.
🚨 Risks of Non-Compliance:
- May lead to conflict, project disruption, and potential claims under Clause 20 (Claims).
- Repeated breaches could escalate to disputes under Clause 21 (Dispute Resolution).
✅ Benefit: Prevents loss of critical talent mid-project.
4️⃣ Cross-Referencing with Other Clauses
Understanding how Clause 6.3 interacts with other parts of the contract is essential to appreciate its operational effect in a real-world project. Below is a more detailed look into relevant cross-references:
🔗 Clause 4.3: Contractor’s Representative
This clause mandates the Contractor to appoint a qualified representative who acts on their behalf. The appointment requires the Engineer’s consent.
- If the Contractor violates Clause 6.3 by hiring someone from the Employer’s staff, the Engineer might reject this appointment or request removal.
- The term “qualified” includes ethical hiring practices. An appointment made in breach of Clause 6.3 could be challenged.
Implication: Unauthorized hiring could delay the approval of key roles, affecting overall project governance.
🔗 Clause 6.9: Contractor’s Personnel
This clause gives the Engineer the authority to object to or require the removal of any Contractor’s Personnel who:
- Misbehave,
- Are incompetent,
- Persist in any conduct that breaches the Contract.
Hiring someone from the Employer’s side in violation of Clause 6.3 may fall under “persistent misconduct” or contractual breach. The Engineer can instruct the Contractor to remove such a person.
Practical Example: If a construction manager is recruited by the Contractor from the Employer’s team, the Engineer can issue a removal notice under Clause 6.9, especially if the individual had access to sensitive data.
🔗 Clause 6.12: Key Personnel (2017 only)
Introduced in the 2017 edition, this clause requires that Key Personnel (as identified in the Contract Data) cannot be replaced without the Engineer’s approval.
- If a Key Person was recruited in breach of Clause 6.3, the Engineer is unlikely to approve their appointment.
- This adds another layer of protection and procedural checkpoint that reinforces Clause 6.3.
Implication: Any breach becomes self-defeating if the unauthorized recruit cannot be officially appointed.
🔗 Clause 20: Claims, Disputes and Arbitration
Breach of Clause 6.3 could lead to formal claims:
- Contractor may claim loss of key personnel.
- Employer may claim breach of ethical obligations.
This clause governs how such issues are brought forward, evaluated, and resolved.
Implication: Repeated breaches may escalate to a formal dispute, triggering Dispute Adjudication Boards or arbitration.
🔗 Clause 3.1 and 3.2: Engineer’s Duties and Authority
The Engineer is the gatekeeper of compliance and can issue instructions if Clause 6.3 is breached. For example:
- Can deny consent to personnel appointments.
- Can demand written explanation or mitigation steps.
Implication: Engineer acts as the first line of enforcement for Clause 6.3.
Summary Table of Interactions
| Clause | Interaction with Clause 6.3 | Enforcement Mechanism |
|---|---|---|
| 4.3 | Appointment of representatives | Engineer’s consent required |
| 6.9 | Objection/removal of personnel | Engineer can demand removal |
| 6.12 | Approval of Key Personnel | Breach prevents approval |
| 20 | Dispute over recruitment | Formal claim process |
| 3.1/3.2 | Engineer as compliance enforcer | Instructions and clarifications |
5️⃣ What-If Scenarios?
🧠 Scenario 1: What if the Engineer recruits the Contractor’s chief electrical engineer mid-project?
➡️ This is a breach of Clause 6.3 (2017).
The Contractor can:
- Request the Engineer to rescind the offer.
- Lodge a formal notice and potentially claim disruption under Clause 20.
🧠 Scenario 2: The Contractor hires an ex-Employer employee who resigned a month ago.
➡️ Interpretation may vary:
- If that person is no longer part of “Employer’s Personnel” at the time of hiring, it may not breach Clause 6.3.
- However, check if the Employer defines “Personnel” to include recently separated staff.
6️⃣ Suggestions for Clarity and Improvement
A well-drafted clause should not only reflect contractual intent but also leave minimal room for interpretation. Let’s delve deeper into how Clause 6.3 could be improved:
🔍 Ambiguities Identified:
- Term “Recruit” is Not Defined
- It’s unclear whether indirect recruitment (through a third party or headhunter) would constitute a breach.
- Does simply making an offer count as a violation, or does the person need to accept the role?
- No Defined Timeframe for Restriction
- There’s no specification on whether hiring an ex-employee of the Employer, say one month after resignation, violates the clause.
- No Explicit Penalty or Remedy
- The clause doesn’t state the contractual consequence of a breach, leaving enforcement unclear.
💡 Suggested Improvements:
- Define “Recruit” Clearly “Recruit” could be defined as:
“Any attempt to solicit, offer employment to, or engage directly or indirectly, including through recruitment agencies or third parties, any person employed by the other Party during the term of the Contract and within a period of [6] months after such person’s termination.”
- Introduce a Grace Period
“The restriction under this Clause shall remain in effect for a period of [6] months after the termination of employment of the person concerned.” This helps prevent poaching while not permanently limiting employment opportunities.
- Clarify Remedies The clause could specify that a breach would:
- Entitle the non-breaching Party to seek removal of the personnel.
- Trigger a monetary penalty or claim for damages.
🧠 Real-World Example:
Imagine a Project Director who previously worked for the Employer joins the Contractor mid-project. This could raise issues:
- Confidentiality risks.
- Perceived bias or favoritism.
- Reduced trust between the Parties.
Enhanced Clause 6.3 Could Say:
“Neither Party shall, during the course of the Contract and for a period of 6 months thereafter, directly or indirectly solicit or employ any person who is or was employed by the other Party unless such employment is agreed in writing by both Parties.”
This makes the clause clearer, time-bound, and enforceable.
7️⃣ Final Takeaways
✅ Clause 6.3 has evolved from a one-way restriction to a mutual obligation, reflecting modern contractual fairness.
📌 It plays a key role in workforce stability, dispute prevention, and contractual ethics.
🚨 Recommendation: Employers and Contractors should train HR teams on these provisions and include them in onboarding documents to prevent accidental violations.