Substitution clause

[Danielsjdaccountancy]

Quick question. I have had a contract reviewed and it failed straight off the bat for not having a clear substitution clause. The contract mentions the ability to subcontract but says it was at the discretion of the company. I've spoken with the client and they have said it is not possible to substitute as a security check is being performed on me (I would have thought it would be on the business rather than individual).

My thoughts are that despite being on the bench for a while, I should just reject and continue with my job hunting pursuit. Agree?

There are other factors to IR35. I think if it’s not really possible to have an unfettered substitution clause due to the nature of the work, then I fail to see how HMRC could have any real case against it.

If control and MOO are sound, and your day to day practices match this then I think you could be of the opinion of being Outside IR35.

Reviewing a contract should not just be a tick list exercise; there are so many more factors to it.

[pdr]

Thanks for the informative replies.

The suggestion of reviewing my salary was an option I hadn't considered. Judging by the the responses so far, it does sound like substitution is not as common or clearcut in working environments requiring security. Speaking with client, they have already said that i will need to 'comply with reasonable instructions and to promote the best interests of x', whether this implies a high degree of control, I am not sure.

[JoJoGabor]

The only contract I had which was reviewed and past first time was for an SC role. I can dig out the wording but something along the lines of:

"LTDCo can provide an equal consultant who the client have the right to approve and perform security vetting on"

[Clare@InTouch]

Thanks for the informative replies.

The suggestion of reviewing my salary was an option I hadn't considered. Judging by the the responses so far, it does sound like substitution is not as common or clearcut in working environments requiring security. Speaking with client, they have already said that i will need to 'comply with reasonable instructions and to promote the best interests of x', whether this implies a high degree of control, I am not sure.

Complying with reasonable instructions is fine, but not the part about promoting the interests of the client/agent. You are not an employee, you should not be promoting anyone's interests but your own (having due regard for professional conduct of course).

When you have a man who comes to fix your boiler you don't expect him to promote your company. You don't expect him to do anything to bring your company into disrepute either, and a clause that phrases it that way is more common and more acceptable. They almost mean the same thing, but as with everything IR35 related the devil is in the details.

[northernladuk]

Thanks for the informative replies.

The suggestion of reviewing my salary was an option I hadn't considered. Judging by the the responses so far, it does sound like substitution is not as common or clearcut in working environments requiring security. Speaking with client, they have already said that i will need to 'comply with reasonable instructions and to promote the best interests of x', whether this implies a high degree of control, I am not sure.

To be honest substitution is a bit of a farce out side of security environments as well. In the recent JLJ case they called his substition a sham and I would bet my last dollar a majority of clients won't honour the clause to the letter anyway. If there is a solid reason not to have a clause, and SC doesn't get much better, the can't argue its a shame. I would expect the same clause will affect any 3rd party working there whatever the size of the company.

I wouldn't worry about that last comment either. You are working in a high secure area, the client has to keep tight control on working practices by law so yes they may direct you to have a clean desk policy, don't print stuff etc.. This doesn't mean they are directing what you do to fulfill your role. The only thing you want to worry about here is if they are directing you to do other work not stipulated by your contract, i.e. using you as a compant resource like a permie.

[LisaContractorUmbrella]

To be honest substitution is a bit of a farce out side of security environments as well. In the recent JLJ case they called his substition a sham and I would bet my last dollar a majority of clients won't honour the clause to the letter anyway. If there is a solid reason not to have a clause, and SC doesn't get much better, the can't argue its a shame. I would expect the same clause will affect any 3rd party working there whatever the size of the company.

I wouldn't worry about that last comment either. You are working in a high secure area, the client has to keep tight control on working practices by law so yes they may direct you to have a clean desk policy, don't print stuff etc.. This doesn't mean they are directing what you do to fulfill your role. The only thing you want to worry about here is if they are directing you to do other work not stipulated by your contract, i.e. using you as a compant resource like a permie.

I wonder if this is why HMR&C place so much emphasis on the substitution clause - in reality it's going to be pretty difficult to achieve for most contractors

[psychocandy]

OK. Prob been discussed before but how many of you have actually sent in a sub?

Or even think their client would allow it?

I can see it might be easier for developers to do this, but in my situation (support/consultancy) there's just no way ever someone could walk in and do it. Not so much technical knowledge, more of knowledge of the clients systems.

Saying that ive got right of sub in my contract but its at clients discretion. But I know it;d never happen.

[LisaContractorUmbrella]

OK. Prob been discussed before but how many of you have actually sent in a sub?

Or even think their client would allow it?

I can see it might be easier for developers to do this, but in my situation (support/consultancy) there's just no way ever someone could walk in and do it. Not so much technical knowledge, more of knowledge of the clients systems.

Saying that ive got right of sub in my contract but its at clients discretion. But I know it;d never happen.

This is why there is now so much emphasis on working practises accurately reflecting the contract in an IR35 review and why the ROS has become such a big part of HMR&C's defence. In reality it is difficult, if not impossible, for a highly skilled and specialised contractor to achieve - one for the PCG perhaps? Over to you Mal

[Clare@InTouch]

OK. Prob been discussed before but how many of you have actually sent in a sub?

Or even think their client would allow it?

I can see it might be easier for developers to do this, but in my situation (support/consultancy) there's just no way ever someone could walk in and do it. Not so much technical knowledge, more of knowledge of the clients systems.

Saying that ive got right of sub in my contract but its at clients discretion. But I know it;d never happen.

I see it every so often, but it's not common. It's more likely when you have two or more contractors acting as a 'group' who then sub for each other, or two people who both know the systems because they used to/do work at the same site. A lot of people have sub clauses though, some good some pointless because they are too fettered (sadly agencies often don't acknowledge there's a difference in interpretation due to wording).

Control is the biggest factor for most clients, and likely to form the basis of defence.

[BlasterBates]

despite being on the bench for a while, I should just reject and continue with my job hunting pursuit. Agree?

Well net income even after NI is still more than nothing. I would plump for paying NI rather than be on the bench.

If you've been on a month or two I would just accept and look for something in 6 months.

If you have some hot leads and interviews, then OK maybe you can afford to turn it down.

From reading the above though looks like you might well to be able to argue outside IR35 anyway.