Contract - Early Termination

**BrilloPad** · 26 July 2008, 20:04

Originally posted by can1605 View Post

I would be grateful for any help on this:

I entered into my contract on the assumption that it would run for three months. The contract end date reflects a three month period. There is a notice period within the contract of one week

It now transpires from talking to the end client that it is their intention to terminate early: 3/4 weeks before the end date - so what was effectively a three month contract has now become two months. The reason this has come about is that they have decided to bring another contractor in, which means my workload has effectively halved. I am not happy about this situation and have expressed my discontent to the recruitment agency. I also told the client I wasn’t happy and they said that it has always been their practice to end contracts early if the workload dictates and the agency should have made me aware of this (the agency also assumed I would be there for the full three months)

Is there any obligation for the end client to honour the length of the contract or does the notice period in the contract mean that they are within their rights to terminate as they please? Am I within my rights to seek compensation for any period between the date they terminate and the original end date of the contract?

NB I am working through an umbrella company. My contract contract is with them and their contract is with the Agency acting on behalf of the end client

Thanks in advance

I can't see you have any recourse

Anyway - they might find more work for you....

**TheBigYinJames** · 26 July 2008, 20:05

Originally posted by can1605 View Post

Is there any obligation for the end client to honour the length of the contract or does the notice period in the contract mean that they are within their rights to terminate as they please? Am I within my rights to seek compensation for any period between the date they terminate and the original end date of the contract?

You're new to this, aren't you?

A termination cluase is just that, it gives them the right to terminate the contract. If you didn't like the term, you could have negotiated it at the start, or walked away.

Bear in mind it probably gave YOU the right to terminate early too.

**RichardCranium** · 26 July 2008, 20:29

A business will employee contractors at a higher rate than permies to allow themselves greater flexibility within their resource pool. They know they can top up the effort available with disposable contractors that they can ditch at very little notice and very little cost should circumstances change. They will pay extra for that flexibility and lower-risk approach.

As contractors, we negotiate a higher rate for our services than a permie. We do this to compensate for:
- sick leave;
- holiday pay;
- training;
- being rogered by the taxman;
- the increased risk of early termination.

To make this work, an employer will seek to see an 'early termination' clause in the contract. The shorter the term in that clause, the better it is for the employer. This allows them to get the work done that they want, but still be able to stop expenditure very quickly if necessary. As a contractor, we charge them for that service to mitigate our risk of them using that clause.

The compensation is in your rate; you have already had it.

Sorry.

The thing to do now is be really nice to the client. Dish out business cards and say "Thank you for letting me help you. If I can help again, here's my number, just call me. And remember, I'm the low-risk option you can dismiss as the drop of a hat, so if you have a high risk project, I'm the person you need to work on it."

**can1605** · 26 July 2008, 20:43

BIgYin, you maybe surprised to know that I'm not new to this! I've been out of the contract market for a while, yes, but prior to this when I had contracted before, I had always been use to clients 'honouring' their contracts. Call it an unwritten agreement or gentleman's handshake but that's what I've always been used to

I understand that you always have to have a notice period built in but i've been used to honouring my contract and expect the other side to as well. If i'd been told at the start it was 1 months work then rolling week to week after that, I would have perceived the contract differently and maybe pursued something else of a longer term nature

I feel as if I've been dicked around no end and the goalposts moved half way through. I'd always been used to honouring my side of the deal and not buggering off early if something better came up. I'll be reviewing this stance immediately!

**Turion** · 26 July 2008, 21:20

Clients will often use the termination clause when the work runs out. It makes cold economic sense, and is one of the reasons you were hired in the first place instead of a permie. When it comes down to it, a contract is only as good as the termination clause so do not get sweet talked by agents about great 'long term' projects. If the budget is cut for example, you can expect to be terminated

.

In this case the client has kindly told you what will most likely happen. You can therefore be better prepared, and go find another project, invoking your notice period should you wish. In this situation, I would attempt to find another project whilst still continuing, and if one comes up, leave. If nothing comes up, I just continue working till the end like a good boy. Personally I would do what seems best for me at the time without any regard for client loyalty. Do to them what they do to you. They will understand as it's business.

**BolshieBastard** · 26 July 2008, 21:35

Anyone in contracting should know, the effective length of your contract is your notice period. Not nice but remember that and you wont get too disappointed.

Unfortunately some clients and \ or agents operate this way. They tell us the contrat is 3 months but they only have work for you for 6, 7, 8 or 9 weeks etc.

Not a lot you can do about it except look for another role and try and learn from this sour experience.

**chris79** · 26 July 2008, 21:41

Put it to experience, say thanks, and move on. Not how you wanted it, but this is the business we are in, all the reasons mentioned by those above etc.

**pmeswani** · 27 July 2008, 08:19

Originally posted by can1605 View Post

I would be grateful for any help on this:

I entered into my contract on the assumption that it would run for three months. The contract end date reflects a three month period. There is a notice period within the contract of one week

It now transpires from talking to the end client that it is their intention to terminate early: 3/4 weeks before the end date - so what was effectively a three month contract has now become two months. The reason this has come about is that they have decided to bring another contractor in, which means my workload has effectively halved. I am not happy about this situation and have expressed my discontent to the recruitment agency. I also told the client I wasn’t happy and they said that it has always been their practice to end contracts early if the workload dictates and the agency should have made me aware of this (the agency also assumed I would be there for the full three months)

Is there any obligation for the end client to honour the length of the contract or does the notice period in the contract mean that they are within their rights to terminate as they please? Am I within my rights to seek compensation for any period between the date they terminate and the original end date of the contract?

NB I am working through an umbrella company. My contract contract is with them and their contract is with the Agency acting on behalf of the end client

Thanks in advance

I got stung in my first contract. Was given the impression that I was going to get an extension on my contract, then got asked if I wanted to go permie, then 1 week to go, I was told my contract was being terminated at the end of the contract. I had told the manager that I wasn't happy (politely) as I would lose another month's rent and costs, etc. Unfortunately, my extension wasn't his decision, even though he recruited me. Tough love.

**sammy** · 29 July 2008, 07:29

Hi
I have just started what i thought was a 6 month contract. The client originally offered a 3 month contract, which I turned down. They then changed it to 6 months, which I agreed to and have since signed a contract with the agency for 6 months.

However, on starting the contract the client has informed me that it is a 3 month contract and then they will either renegotiate the contract or have me go permanent after this time. I don't want to go permanent as the wages would be a lot lower than what I was on in the job that I left. I only accepted the contract because it was 6 months.

I guess there is nothing that I can do as they could get rid of me next week if they wanted to anyway.

If the agency mislead me into thinking that the contract was 6 months when it was only 3 is there anything I can do?

Contract - Early Termination