Some IR35 unfriendly contract wording ....or not?

[Olly]

Hi,
I'm not currently contracting, so before NLUK or anyone else mentions it, I haven't got an accountant, QDOS, PCG or anyone else to ask. ( Sorry NLUK... :-P )

The contract for a role I'd like to start in a few weeks time contains the follow wording I thought was bit IR35 unfriendly, what's your view please?

Substitution
Whilst the contract includes "The Contractor’s obligation to provide the services shall be performed by such Representatives as the Contractor may consider appropriate, subject to the prior agreement of the Employment Business and Client, not to be unreasonably withheld."

...it also goes on to say...

"Not to sub-contract to any third party any of the services which it is required to perform under any Assignment"

Direction and control
"To be present during the times or for the total number of hours during each day and/or week of the Assignment as may be agreed with the Employment Business or the Client."

...though no such times/hours/days of week have been mentioned or agreed with either.

"To co-operate with the Client’s staff and accept the reasonable direction of any person in the Client’s organisation to whom it is required to liaise and comply with all reasonable and lawful instructions within the scope of the Assignment made by the Client. Nothing in this provision will affect the reasonable autonomy of the Contractor or its Representative in relation to determining the method of performance of the services."

hmmm...?

Thanks

[mudskipper]

You really need to get a professional review - QDOS or B&C are the usual recommendations.

[eek]

You really need to get a professional review - QDOS or B&C are the usual recommendations.

+1 You need professional advice so pay for that advice.

[malvolio]

And perhaps understand the difference between substitution and sub-contracting. If you send a substitute, you remain liable for them, their work and their fees. If you sub-contract the work you don't. So the 'no subcontracting' clause is entirely reasonable.

(And PCG's Guide to Freelancing is free, BTW. Go have a look)

[LisaContractorUmbrella]

Reads like any one of a dozen standard agency contracts - best advice would be to have a chat about the role and see whether you could, in reality, provide a substitute of your choosing and whether you will actually be given regular directions from a line manager or whether it will just be a case of having a meeting once a week to report on progress. Depending on the answers you get you can negotiate to have the contract reworded to reflect reality.

[Qdos Contractor]

Those specific clauses are ok and part of a standard contract numerous agencies use. You can tell that they were once negative, but have been altered over the years to make them compliant (I remember the original version).

As others have said it's important to ensure the contract matches the reality, and the actual working practices are key.

Ensure the contract is checked properly, as all sorts of things can be slipped into schedules and appendices even if the main T&Cs are ok.

[Kate Cottrell]

Hi,
I'm not currently contracting, so before NLUK or anyone else mentions it, I haven't got an accountant, QDOS, PCG or anyone else to ask. ( Sorry NLUK... :-P )

The contract for a role I'd like to start in a few weeks time contains the follow wording I thought was bit IR35 unfriendly, what's your view please?

Substitution
Whilst the contract includes "The Contractor’s obligation to provide the services shall be performed by such Representatives as the Contractor may consider appropriate, subject to the prior agreement of the Employment Business and Client, not to be unreasonably withheld."

...it also goes on to say...

"Not to sub-contract to any third party any of the services which it is required to perform under any Assignment"

Direction and control
"To be present during the times or for the total number of hours during each day and/or week of the Assignment as may be agreed with the Employment Business or the Client."

...though no such times/hours/days of week have been mentioned or agreed with either.

"To co-operate with the Client’s staff and accept the reasonable direction of any person in the Client’s organisation to whom it is required to liaise and comply with all reasonable and lawful instructions within the scope of the Assignment made by the Client. Nothing in this provision will affect the reasonable autonomy of the Contractor or its Representative in relation to determining the method of performance of the services."

hmmm...?

Thanks

Yes some very IR35 unfriendly clauses here. Providing your working practices (the reality of the day- to-day) support an outside IR35 position we at B & C would seek to amend these. On substitution the quote is very far from a positive clause giving you a right to substitute or describing the process.

On Direction and Control - the words not only suggest control over when and where but also "to be present" suggests also mutuality of obligation.

Your final clause has the words "accept the reasonable direction of any person" and "comply with all reasonable and lawful instructions" is shouting control and the final sentence giving you "reasonable" autonomy is again far from a positive clause stating a lack of control over the manner in which you provide the services. Always beware of the word "reasonable" which is a long way from having complete autonomy. Hope this helps.

[jamesbrown]

Indeed, seek professional advice, although as you can see from the above two responses, there's some variation of opinion based on the limited info provided.

Personally, I'd be concerned about the D&C element of what you've quoted. Of the what, when, where and how elements of D&C, the first clause controls where and when and the second controls what and how, potentially. To me, the second clause under D&C is completely redundant in a B2B relationship and aims to assert control. As others have mentioned, the working practices are paramount, but it doesn't help to have weak or negative clauses in the contract; best to get a full review and suggested alternative phrasing (that matches the reality, of course).

[northernladuk]

Hi,
I'm not currently contracting, so before NLUK or anyone else mentions it, I haven't got an accountant, QDOS, PCG or anyone else to ask. ( Sorry NLUK... :-P )

Get one and go ask the others

You are welcome

[tractor]

...

It's hard not to pay attention to the two professionals who have contributed thus far.

I have been contracting for a long time and have never felt the need to have contract reviewed, having successfully re-negotiated any clauses that I had an issue with. I have noticed though that recently, many agents are playing hardball to the extent they will let you walk away even at start deadline -1 hour. This is personal experience and anecdotal so I know that it is happening. So in future, I will be getting them reviewed particularly for the benefit you undoubtedly gain from an arms length professional conducting the negotiations.

I have a few questions if the professionals wouldn't mind answering;

1. Even though my negotiations up until recently (probably 20 or so contracts over the years not inc extensions) have been quite successful, I never get to speak to anyone other than the monkey. When you negotiate, do you actually get to speak to the organ grinder i.e. someone who is legally qualified?
   
2. Are you finding also that agencies are getting more difficult to negotiate with?
   
3. Are there times when you are unable to make a difference and of those times, are they always with the same agencies?

Thanks for your time