Legal Query

[jimmymac1964]

Hi,

Some advice required if possible.

I am currently employed within IR35 regulations, working for a client through an umbrella company and an agency. As of now, I have completed six months of a 12-month contract. However, due to the recent changes in my personal circumstances, it has become necessary for me to seek alternative employment opportunities.

Upon reviewing my contract, I noted that it states, "No provision for early termination." In light of this clause, I am uncertain about my options for leaving the contract before its intended completion.

Considering my employment status within IR35, and thus having the same employee rights as a regular employee, I am wondering if I can provide notice to terminate the contract and subsequently negotiate a mutually agreeable timeline for my departure with the client. While I believe the client will be understanding of my situation, I am also keen on ensuring that I proceed in accordance with all legal requirements, and would like to safeguard myself legally in my dealings with the agency.

Would anyone know where I stand with leaving my contract early?

PS I also intend to seek advice from a legal representative to clarify my rights and obligations

Thanks

[northernladuk]

Hi,

Some advice required if possible.

I am currently employed within IR35 regulations, working for a client through an umbrella company and an agency. As of now, I have completed six months of a 12-month contract. However, due to the recent changes in my personal circumstances, it has become necessary for me to seek alternative employment opportunities.

Upon reviewing my contract, I noted that it states, "No provision for early termination." In light of this clause, I am uncertain about my options for leaving the contract before its intended completion.

Considering my employment status within IR35, and thus having the same employee rights as a regular employee, I am wondering if I can provide notice to terminate the contract and subsequently negotiate a mutually agreeable timeline for my departure with the client. While I believe the client will be understanding of my situation, I am also keen on ensuring that I proceed in accordance with all legal requirements, and would like to safeguard myself legally in my dealings with the agency.

Would anyone know where I stand with leaving my contract early?

PS I also intend to seek advice from a legal representative to clarify my rights and obligations

Thanks

You can't have your cake and eat it. You contract inside and get taxed like a perm or you go perm and get the rights. Forget anything to do with trying to compare yourself to a perm of the client. You aren't. You are taxed 'like a perm' and you get some rights for being employed by the brolly but you can't assume inside is the same as perm. It's simply not.

You have employment rights as an employee of your umbrella but you are on a short term contract assignment. There are two contracts in play here. The one between you and your brolly, the employment one or the one between your umbrella and the agency. The one you are talking about is the one between the agency and umbrella which has nothing to do with perm rights. Notice is on THAT contract, not your employment.

Most of us will kind of know where this is going to go just from your first seven words. 'I am currently employed within IR35 regulations@, which is complete popycock. You are employed by the umbrella but you are working on a temporary inside IR35 assignment. You need to be really pedantic about your terminology.

You really have to understand your situation so you can deal with issues like this. It's pretty key to everything and it's your job now so critical you understand who you are in the chain, who pays who and what you get. You are still a CONTRACTor so still need to understand how the different contracts work.

So back to your original question. Legally you cannot give notice. To do so would put you in breach and open yourself up to the agent demanding costs back from you for breach. You read the contract, understood it and then given the umbrella the nod you are OK with it so this shouldn't be a surprise to you. If you didn't, make sure you do in the future. This is your job.

So you can't leave... but really you can. No client wants someone there, employee or contractor that doesn't want to be there. Negotiation is the best way out of this. If can come to an amicable agreement they'll forget the contractual terms. Tell them why you need to leave, give them four weeks notice and promise to do a full and concise handover. The agent should be able to place someone in that time frame, possibly even earlier and then you can go. The agent 'may' attempt to withold your last invoice in lieu of the costs you caused them to incur but that's illegal. They should pay you and THEN come after you for costs. But it's first to blink. Sometimes you'll get your money, other times you won't.

Out of interest why can't you continue? I've applied for two inside roles where contractors are leaving and I'll bet everything I have it's to go to a better gig.

[woody1]

Just pull a sicky, then you'll find out how much they really want to hold you to the contract.

[northernladuk]

Just pull a sicky, then you'll find out how much they really want to hold you to the contract.

I know that was tongue in cheek but at least one of our more regular posters would tout this as a valid reason to leave. Pulling a sickie to end a contract is still breach as you are lying to avoid your obligations. He will also have to provide a sick not to his employer (the umbrella) after 7 days.

If there is a question mark over getting his last invoice paid if he tries to leave amicably he'll certainly not get his last invoice (or more if he's on long pay terms) paid if he tries something like this.

[Protagoras]

I have a simplistic take on this. Notwithstanding the ‘inside’ pseudo-employment thing, this is about a contract of employment between OP and the Brolly, being the only contract to which the OP is party.

As with all contracts, the best way to vary them is to negotiate. Hence speaking with the client, explaining the problem, and hoping that the client would be understanding and smooth the process. The client’s concern will be about delivery and continuity and it’s all about mitigating disruption.

As to the original question: some years ago, an employed colleague at a large consultancy obtained legal advice re quitting without giving the full notice – he wanted to go in one month, the contract specified three months. The legal advice he obtained was that if he went after only one month, his employer could obtain a substitute for the two months and that he could be pursued for any additional costs the employer incurred for the replacement resource. Faced with this prospect, he reluctantly worked the three months’ notice. In this case he was leaving to become a contractor!

Presumably, since the umbrella company has a contract to provide the agent with a resource at a given cost rate, the umbrella would need to secure alternative resource if their ‘employee’ resigned and may need provide this at a loss. The umbrella could therefore pursue the former ‘employee’ for losses, I suppose. But this is all theoretical since the appropriate way to handle this problem is through negotiation.

[woody1]

I'm actually surprised the client would agree to such a clause. What happens if the contractor turned out to be rubbish at the job or a PITA? Are they really stuck with them for a whole year?

Conversely, what would happen if the contractor genuinely couldn't work due to ill health? Or died?

[wattaj]

I'm actually surprised the client would agree to such a clause. What happens if the contractor turned out to be rubbish at the job or a PITA? Are they really stuck with them for a whole year?

These are generally one-sided arrangements to stop the contractor jumping ship mid contract... not that they do in my experience. Besides, who would want someone working for them that does not want to be there?

[northernladuk]

I'm actually surprised the client would agree to such a clause. What happens if the contractor turned out to be rubbish at the job or a PITA? Are they really stuck with them for a whole year?

Conversely, what would happen if the contractor genuinely couldn't work due to ill health? Or died?

Are you actually a contractor at all? You certainly don't sound like one.

The contractor not being able to give notice has nothing to do with wether the client can give notice. You can't have uneven terms and there are other ways out.

I think it's not just the OP that needs to learn what they do a bit better.

[woody1]

Are you actually a contractor at all? You certainly don't sound like one.

Was. Got out of IT contracting in 2006 to do something different. The only restrictive clause I remember back in the day was agreeing not to work for the client, for a period of time, after parting company with the agency.

[northernladuk]

Was. Got out of IT contracting in 2006 to do something different. The only restrictive clause I remember back in the day was agreeing not to work for the client, for a period of time, after parting company with the agency.

If you know so little and have been out of the game so long why are you posting daft questions?