Is this contract drifting into IR35?

[Limited]

when I say 'normally', what I really mean is that I have the right to do so in the contract. This is to cover the situation where I don't have a chance to arrange other work in time, so have suffered loss of earnings

In reality I would never push this as it wouldn't be the best for the relationship with the client and only used if they really took the p1ss.

I've seen this sort of thing before as a permie working for a consultancy. Always in contract, sometimes threatened, hardly ever used

[Denny]

when I say 'normally', what I really mean is that I have the right to do so in the contract. This is to cover the situation where I don't have a chance to arrange other work in time, so have suffered loss of earnings

In reality I would never push this as it wouldn't be the best for the relationship with the client and only used if they really took the p1ss.

I've seen this sort of thing before as a permie working for a consultancy. Always in contract, sometimes threatened, hardly ever used

Your client is not responsible for you not being able to arrange work in time, and to hold him responsible in this way is not good business practice.

Not having a chance to arrange other work in time is not the same as actually losing out on client business whereby proveable material losses are an issue as conducive with the kind of business you're in. Otherwise, we would all be able to do this. Contract ends but we insist on a fee from our direct clients or EB because we don't have something else lined up straight away afterwards.

You're on dodgy ground with this arrangement as you are setting up your commercial relationship with this client in such a way as to negate risk with the client picking up the costs and risk on your behalf. That is employment.

[boredsenseless]

Your client is not responsible for you not being able to arrange work in time, and to hold him responsible in this way is not good business practice.

Not having a chance to arrange other work in time is not the same as actually losing out on client business whereby proveable material losses are an issue as conducive with the kind of business you're in. Otherwise, we would all be able to do this. Contract ends but we insist on a fee from our direct clients or EB because we don't have something else lined up straight away afterwards.

You're on dodgy ground with this arrangement as you are setting up your commercial relationship with this client in such a way as to negate risk with the client picking up the costs and risk on your behalf. That is employment.

And his statement of 'loss of earnings' doesn't really hold up either since a company makes revenue not earnings employees make earnings - I'm seeing the true situation here through the fog now.

[Limited]

thanks for your replies Denny. Without wishing to go off-piste a bit on this subject...

the situation I was thinking about is where you are actually turning down or delaying other work so you have suffered a loss and if, for example, you are told the day before that the agreed start date has been moved

So this isn't a notice period, or responsibility to renew a contract or anything like that, just a responsibility to stick to the dates that have been agreed. If I'd cancelled my dentist appointment this morning I would still have to pay for it.

[Limited]

And his statement of 'loss of earnings' doesn't really hold up either since a company makes revenue not earnings employees make earnings - I'm seeing the true situation here through the fog now.

That may be my mistake, but surely you don't have to be a company to not be an employee

[Denny]

thanks for your replies Denny. Without wishing to go off-piste a bit on this subject...

the situation I was thinking about is where you are actually turning down or delaying other work so you have suffered a loss and if, for example, you are told the day before that the agreed start date has been moved

If you turn down other work, then that's part and parcel of being in business. That's why you need to have other subs in place to pick up the work you can't do yourself. Unless you can demonstrate that you were charged yourself for turning down other business that operates on a different model, then you could only pass on these actual costs to your client.

I don't buy the second argument either. If you already know that your commercial relationship with your client is based on flexibility on when the work will start then you can hardly claim they've let you down when they move the start date. This arrangement seems to be part and parcel of your agreed commercial relationship that doesn't go outside the usual expectations.

Whatever way to try and dress it up, it seems to me that you are actually being hired as a flexible temp worker in practice, to carry out any work on site they choose to give you when it comes up at any given time at their own convenience and that they expect you to be available when it suits them and not you (implied MOO), even if that is not your intention or the stated intention of the client to hire you as a temp worker. That's why they have agreed to pay you for time you've been inconvenienced for. If you want to remain outside IR35 legitimately you will have to start putting your foot down and either accept the risks involved with shifting dates and not charging without just cause, or set up a different commercial relationship with the client. You can't have it both ways.

[Limited]

well I wouldn't be the only consultancy charging a cancellation charge

a quick google of

"consultancy charging for cancellation"

shows that it appears in the T&Cs of quite a few companies

[Denny]

well I wouldn't be the only consultancy charging a cancellation charge

a quick google of

"consultancy charging for cancellation"

shows that it appears in the T&Cs of quite a few companies

I'm sure it does for those consultancies that routinely have multiple clients for fixed price pieces of work which is part and parcel of their business model. I'm not this is the case here though.

[Limited]

I'm sure it does for those consultancies that routinely have multiple clients for fixed price pieces of work which is part and parcel of their business model. I'm not this is the case here though.

maybe but their reasons for doing it are the same -
compensate for loss of opportunity / reduced utilisation of consultants
make sure customers treat bookings seriously

I'm just doing the same over here

I do routinely have multiple clients, just don't (often) do fixed price work - projects are usually too short and too badly defined until we get started

[el duder]

stop being so damned paranoid.