Re-employment as a contractor following redundancy

[Wezzytec]

I was made redundant (mandatory, not voluntary) from a permanent role, providing service to a single client. The client were unhappy with the decision and requested my previous company bring me back in a short-term contract role, provided through a 3rd party company, which I did.

Subsequently, a separate contract role has become available, different to my original role, but through my initial company. The client pushed hard for me to fulfil that role. I would again be provided by the same third party company. However, this has now been been blocked by HR in the initial company.

Are they allowed to do this, given that:
- I was made redundant mandatorily (not voluntarily)
- I will be contracting back through a 3rd party
- I have already been brought back for a period
- This new role is different to the role I was made redundant from.

Any advice, please?

[cojak]

I was made redundant (mandatory, not voluntary) from a permanent role, providing service to a single client. The client were unhappy with the decision and requested my previous company bring me back in a short-term contract role, provided through a 3rd party company, which I did.

Subsequently, a separate contract role has become available, different to my original role, but through my initial company. The client pushed hard for me to fulfil that role. I would again be provided by the same third party company. However, this has now been been blocked by HR in the initial company.

Are they allowed to do this, given that:
- I was made redundant mandatorily (not voluntarily)
- I will be contracting back through a 3rd party
- I have already been brought back for a period
- This new role is different to the role I was made redundant from.

Any advice, please?

The simple answer is yes - HR is allowed to do this.

There is a policy that many companies have, that they do not re-employ people who have left the company (for any reason).

So I'm afraid that you need to look for another contract.

[northernladuk]

They are allowed to engage with who they want, how they want. You don't get a free pass just because you are an ex employee. I'd imagine bringing an extra person back on would leave a perm sitting doing nothing and hit their margins so they'll push back with everything they've got. The client might be a bit hacked off but as long as they get the service they want in the long run they'll live with it. No one is indispensable.

Coming back and doing the same role you were made redundant from is a potential IR35 nightmare. I hope you did it properly.

And P.S. If you come back as a contractor you are not re-employed. You need to get this through your head quick as I'd guess you've already got an IR35 issue that you've no idea about.

You've just got to move on and don't get emotionally attached to gigs else contracting is going to be a bum deal for you.

[SueEllen]

Loads of companies who supply clients have anti-competition clauses in their contracts with the client. This prevents the clients hiring current and recent former employees of the company directly and indirectly for a time period. This time period can be anything from 3 to 12 months.

It use to be (and still can be) that the clauses were very badly written so weren't legally enforceable. An example is BT preventing their former employees working for any of their clients for 6 months. This meant they could be safely ignored by the company's employees and clients.

However now companies have become wise to this and have better worded clauses in their contracts so they are actually legally enforceable. So in the BT example the wording would change to prevent former employees working for any business client they had a direct working relationship within the last 6 months.

I suggest you check your own employment contract with your former employer to see what the time period is before you can engage with your former employer's clients.

[eek]

Loads of companies who supply clients have anti-competition clauses in their contracts with the client. This prevents the clients hiring current and recent former employees of the company directly and indirectly for a time period. This time period can be anything from 3 to 12 months.

It use to be (and still can be) that the clauses were very badly written so weren't legally enforceable. An example is BT preventing their former employees working for any of their clients for 6 months. This meant they could be safely ignored by the company's employees and clients.

However now companies have become wise to this and have better worded clauses in their contracts so they are actually legally enforceable. So in the BT example the wording would change to prevent former employees working for any business client they had a direct working relationship within the last 6 months.

I suggest you check your own employment contract with your former employer to see what the time period is before you can engage with your former employer's clients.

That isn't the issue here - the original employer has already let the OP and the end client continue they working relationship so those clauses have been bypassed.

The issue here is that their original employer now has a new opportunity to fill at the end client and the OP is out of the running due to internal HR politics.

[malvolio]

That isn't the issue here - the original employer has already let the OP and the end client continue they working relationship so those clauses have been bypassed.

The issue here is that their original employer now has a new opportunity to fill at the end client and the OP is out of the running due to internal HR politics.

So, being a good businessman, the OP should be approaching the end client since he has experience and history with them, and ignoring their old company altogether.

If there are issues over handcuffs, that will be between the two client companies, and if the OP is the preferred solution that will be resolved. But as of now, the ex-employer is out of the picture.

[Wezzytec]

Many thanks...

Many thanks all, for your advice. You are right that I need to get into a different mind-set for contracting!!

I, due to my previous role, am very aware of IR35 and ensured that I was outside it for my short-term contract.

Fortunately I am not subject to a handcuff agreement (I have that in writing from my former employer) and my end client is now looking at potential ways to employ me. I will give it a week or two to see if they can come up with anything then start looking elsewhere.

Thanks all.

[northernladuk]

I, due to my previous role, am very aware of IR35 and ensured that I was outside it for my short-term contract.

I really struggle to believe that. An employee comes back as a contractor to finish a job off? That's the definition of IR35 right there.

Fortunately I am not subject to a handcuff agreement (I have that in writing from my former employer) and my end client is now looking at potential ways to employ me. I will give it a week or two to see if they can come up with anything then start looking elsewhere.
Thanks all.

Are they going to employ you or engage you as a contractor?

[oilboil]

Many thanks all, for your advice. You are right that I need to get into a different mind-set for contracting!!

I, due to my previous role, am very aware of IR35 and ensured that I was outside it for my short-term contract.

Fortunately I am not subject to a handcuff agreement (I have that in writing from my former employer) and my end client is now looking at potential ways to employ me. I will give it a week or two to see if they can come up with anything then start looking elsewhere.

Thanks all.

The only three people who assure you that you are outside IR35 are

1) HMRC - and they are biased
2) You - having objectively assessed the rules and working practices - and you are biased
3) AN IR35 contract review specialist - and you'd need to tell them the truth about how you actually behave not what the contract says

Your end-client/pimp/agent can't tell you it is outside of IR35, they can only tell you what they expect to be the case, you still need to review that and apply reality to the situation. They can however tell you they beleive it is an inside role and refuse to contract unless through a payroll mechanism (or refuse to help you in any future HMRC investigation)

Two people can technically do the same role and because one embeds themselves into the way the organisation works and becomes integral and the other maintains a proper commercial relationship instead they can both have different determinations on their IR35 status

[eek]

The only three people who assure you that you are outside IR35 are

1) HMRC - and they are biased
2) You - having objectively assessed the rules and working practices - and you are biased
3) AN IR35 contract review specialist - and you'd need to tell them the truth about how you actually behave not what the contract says

Your end-client/pimp/agent can't tell you it is outside of IR35, they can only tell you what they expect to be the case, you still need to review that and apply reality to the situation. They can however tell you they beleive it is an inside role and refuse to contract unless through a payroll mechanism (or refuse to help you in any future HMRC investigation)

Two people can technically do the same role and because one embeds themselves into the way the organisation works and becomes integral and the other maintains a proper commercial relationship instead they can both have different determinations on their IR35 status

All the above of course only holds true until April when the determination of what roles are inside and what are outside moves to the end client.