Termination of a 1 year contract in 3rd week

[itcontractor07]

Thanks for all your responses chaps.

My understanding till now about 30 days notice was that the client/agency gives a 30 days notice period before he will stop paying you, irrespective of whether he is able to give me any work or not..

But the understanding seems to be different among people across the board..

Cheers anyway

[BlasterBates]

This would be my understanding and you would be right to bill him on the basis of the notice clause, but I would see a lawyer first.

[Nick44]

please if someone has better ideas how to structure notice periods in an IR35 friendly contract then would love to hear them

its usualy very hard to have ur cake and eat it

on one side you want to be treated like a supplier (ir35 friendly) but on the other you want the notice period of a employee (30 days). the whole point of ir35 is deemed employment so i think this will be a very tricky one to resolve

personaly i'd advise ppl not to have a notice period (or have maybe 1 week max) if u wanna argue that ir35 doesnt apply, if ur notice period is anywhere near that of a standard emplyee then its a nail in the ir35 coffin as its just another arguement that you are in deemed employment.

[mavster07]

Notice Periods and Termination

Its an interesting dilemma that I also have experienced.

The bottom line, legally, is that the change in notice period is certainly not binding on you. As such, the agency - at worst - is liable for that notice period unless they have a clause in the contract which reads something like 'if our client terminates without notice or with XXX days notice, then we will do so too'. If that clause isn't there, they have to pay you for the notice period irrespective of whether you work it or not. Trust me on that, a notice period is exactly that and if they choose not to give you work, its not your loss but you are not expected to suffer further economic loss as a result. Stick to your guns on that one.

The other thing to note is that if, in entering into the contract, they (being the agent and therefore acting on behalf of the client) gave undertakings that the contract was a year long and you entered into that contract on that basis, then the client may be liable for the full value of the contract.


This is because you are acting as a supplier to the agency and they are effectively on-selling your services to another client. As a result, you are at 'arms length' legally from the client and therefore unless the contract is very specific as to the client, the location, the project etc then you could have a case to sue for breach because the client was not going into the contract in good faith, even though it was their client which didn't honour that good faith.

The key to entering into any contract negotiation is to get it all in writing and to, in effect, trap the agent into ensuring they qualify the opportunity. If they have not qualified the opportunity with their client and you have asked them to do so, then they are caught legally because you can sue them to recover losses you incur as a result of entering into that contract, as well as loss of reputation and other factors (e.g. having to break your lease and suffering a bad credit rating).

The other thing I find useful to do is to effectively 'ring fence' the contract in such a way that it reads like a supplier type contract, not an employment one. That is, to be as specific as possible as to the role, the project, the length and so on. In cases where there is doubt as to the client's commitment, I amend the termination clause to ensure it reads that the contract can only be terminated under specific circumstances. In essence, you want your contract to be as specific as possible with as much detail as possible and to remove or restrict the termination clauses as much as possible to specific circumstances that are 'forseeable'. Forseeability is extremely important in the contract and so if the client or the agency suggests that the project may not move forward at some stage, then you need to mitigate that risk by specifying in your contract that termination is based on mutual agreement, not simply for any reason whatsoever. Again, a supplier side contract.

You also mentioned that a couple of times that they tried to change the termination clause in the contract. When a client tries to do this, this is a red flag. Immediately, I would have put something into writing to the agent asking them to obtain a commitment from the client for the duration of the contract or I would have raised the rate to mitigate risk or something. Something to show that changing the termination clause is not acceptable.

I believe you have a case to challenge them on recovery of costs. Irrespective of their reasons for termination, if you've advised them (either directly or via their agent) that you've invested ££££ into the contract on their good faith promise that the contract would proceed to term, and they never disclosed to you this may not happen, then you should certainly challenge them on that and attempt to recover costs. Too many times clients and agencies have all the upside and no downside and only through making clients aware that there is downside for terminating so early, will things change. At the very worst, I would work out your economic losses and issue them with an invoice for those costs, keeping it polite. If they refuse to pay, I would then issue a demand letter for the same. Failing their payment of that, I would advise them you are treating the losses as a bad debt under the law and placing it in the hands of a debt collector. They will take you seriously.

I've had a similar experience where a client got it wrong and tried to terminate and I was willing to do other work for them aside from the project they had planned. I sat across the table from the MD of the firm I worked for and pointed out that I had serious ££££ on the table and I wasn't prepared to absorb losses for their mistake. They soon realised that I was serious and would take it further and they rolled over, and we completed the contract and left on good terms. If you believe you have been wronged, you'll get more respect for standing your ground and doing your homework and clients will learn the hard lesson that the good contractors are the ones who don't take the rubbish treatment from clients and demand respect.

Hope this helps.

Mavster.

[Turion]

FFS, forget any IR35 stuff (it's assessed on a per contract basis anyways), and what most of these numpties are telling you. Bill for the whole notice period and, if, they refuse to pay then seek legal advice.

[tim123]

FFS, forget any IR35 stuff (it's assessed on a per contract basis anyways), and what most of these numpties are telling you. Bill for the whole notice period and, if, they refuse to pay then seek legal advice.

I thought that's what he was doing

tim

[Olly]

Thanks for all your responses chaps.

My understanding till now about 30 days notice was that the client/agency gives a 30 days notice period before he will stop paying you, irrespective of whether he is able to give me any work or not..

But the understanding seems to be different among people across the board..

Cheers anyway

It should be fairly clear from your contract - have you read it fully and in detail? English is not your first language, what about giving it to someone else to read?

Totally agree with others on here though, invoice for the 30 days and see what happens. Forget out the rent - nooooooo chance!

[original PM]

Yep - if you have contract to supply services at £x per day/per hour then that is what is paid

The notice period is also included in this so even if they do not wish for you to be on site they still have to pay £x per day/per hour.

Very similar to many other contracts you have - like say for your mobile phone you may have a 30 day notice period - you give the 30 days notice to terminate the contract but you still have to pay the monthly rental fee up to the end of that 30 day period whether you use the phone or not.

Like wise with your rental contract - you have to give 6 motnhs notice and you are still obliged to pay for the property for the duration of that notice period whether you occupy it or not.

Tough Break fella

[Olly]

The notice period is also included in this so even if they do not wish for you to be on site they still have to pay £x per day/per hour.

YOU SIMPLY DON'T KNOW THIS...please don't state it as fact!!

Every contract I've had, and it seems for many other too, have contracts structured such that the agency owes you nothing if you don't work and that neither client nor agency is obliged to provide work.