Contract with no termination right on my side - is this 'normal' (or maybe 'common')?

[Glencky]

Looking for advice please on termination rights in a contract I'm being offered. Trying to decide how much the contract worries me (whether I'm worried unnecessarily etc).

I started contracting earlier this year (after 10+ year as a permie) and my first contracts were atypical to what I expect in future - direct with a smaller company through somebody I knew. I'm now about to start my next contract (Monday - and no, I won't be starting unless I have indeed signed the contract!) and it's more like the kind of situation I expect to be the norm for me in future. End client is large financial services company, so I'm going through a large agency.

I've read the contract and unsurprisingly it's very one-sided. I believe they have over 1,000 contractors so I'm expecting my opportunity to negotiate, particularly given timescales, to be limited. Ultimately I'll have the choice whether to suck it up and sign, or walk away and lose the money. And clearly every day I'm not working is a direct cost to me so I'll be motived to go for the 'suck it up and sign' approach!

BUT whilst I dislike a lot of the contract, a few things bother me more than others. Biggest issue is agency pretty much has immediate termination rights and MyCo NONE. It's 14 days on their side but immediate in a number of circumstances if prompted by end client (the financial services company) and since this includes not only the things you'd expect like gross negligence on the part of the consultant, but also things like 'the work isn't there any more' and 'the budget has been cut' I'm taking it that in reality if they want to get rid of me at no notice they can and there'll be little I can do. This doesn't make me happy but it's clearly a business decision for me whether to suck it up or walk away.

On my side however I'm really bothered about having no termination rights at all. It's a 6 month contract. I have no current intention to walk out early and as a principle would always try not to in any contract. But to not have the right to is an issue for me.

Is this 'normal' in this type of contract with large agencies - or at least 'common'?

Any thoughts gratefully received.

[northernladuk]

Notice periods are for permies. They mean squat to us. You get paid on receipt of a signed timesheet. You don't work you don't get paid. They can see your notice out but not give you any work = immediate.

Do a search on google and you will get a lot more information. Contractoruk and contractorcalculator have a lot of good articles on uneven notice periods.

You could also use the search function as described in the link below. Many many threads on notice periods.

http://forums.contractoruk.com/welco...uk-forums.html

No notice contracts are becoming more popular. Barclays have had them for years.

[Glencky]

Thanks for the link about searching - I have indeed found a real 'wood for trees' issue in some of my previous searches on here.

Whilst I'm not enamoured of no notice on their side (and I'm operating inside IR35 so I don't care about any indicators from that perspective), it's the lack of a notice period on my side that bothers me far more.

I'm not expecting to get paid for anything I don't work, notice period on their side or none. What I'm bothered about is the (I suspect pretty small) risk of turning up, hating every aspect of it and being stuck there for 6 months. That is not why I went into contracting!

[TheFaQQer]

Whilst I'm not enamoured of no notice on their side (and I'm operating inside IR35 so I don't care about any indicators from that perspective), it's the lack of a notice period on my side that bothers me far more.

At the risk of taking the thread off topic, are you SURE you're inside IR35?

I'm not expecting to get paid for anything I don't work, notice period on their side or none. What I'm bothered about is the (I suspect pretty small) risk of turning up, hating every aspect of it and being stuck there for 6 months. That is not why I went into contracting!

There are always ways out - the agency can give you immediate notice if they want to, so just upset them enough and they'll fire you

If you don't like it, then you exercise your right of substitution and get someone else in to do the work for you. If you really don't like it, you tell them you've broken your leg and won't be in for three months (I know someone who did that at two consecutive projects). If you really, really don't like it, punch the client manager and they'll get rid of you.

[eek]

No notice contracts are becoming more popular. Barclays have had them for years.

Probably worth adding some background.

Barclays cut rates on a take it or leave it basis years ago and then discovered that while many contractors stayed they started looking in earnest so over the following 2 months many contractors gave notice and left.

After that Barclays introduced their no notice contract so contractors could not leave early.

The important thing to notice here is not that Barclays have no notice contracts (they do) but the reason is that they have a habit of cutting rates by 10% on a take it or leave it basis.. So make sure the rate you are going on is still acceptable when the next 10% cut arrives...

[kevpuk]

As said above, notice periods are essentially meaningless for contractors - if Client decides not to give you any work, you can't bill, you don't get paid = might as well not be there.
As for no termination rights on your side, there are 101 ways you can manage to leave - read the news all day, verrrryyy long fag/coffee/dump breaks (try a few hours to start with), make a pass at the most easily offended person in the office, forget to shower/shave/get dressed and so on
HTH

[Glencky]

Thanks for the constructive suggestions...!

On IR35, I know how controversial a subject it is and am well aware of the views of 'most contractors' operating outside of it. I also fully understand a) how it works and b) the exact nature and significance of the financial difference between inside and outside.

I can't speak for all contractors in all environments, I can only speak for the slice of the market that I know, understand and operate in and for me/ MyCo operating within it. Until recently I 'employed' (ha!) contractors just like I am now. I never saw a contract (big company, people to handle that stuff for me) never knew the terms and didn't care about the contract terms. I can, however, fully understand and appreciate the working practices we operated. And I can tell you I think those working practices, when viewed with total honesty, meant 'my' contractors should've been 'caught' by IR35. Although I haven't started my next contract yet (so I'll review my views once I have done) I'm as confident as I can be that it will be an almost exactly similar environment and hence I'll reach the same conclusion. I have - just on principle really, might as well know the score - had my imminent contract reviewed for IR35 compliance and yeah, it's compliant. But that's irrelevant if the working practices aren't.

There are many working practices criteria on which I'd be in the clear but some key ones on which - whilst I could 'spin' it and be extremely careful and hope to have a good case in the event of a investigation, and get the might of PCG behind me etc etc... - I basically wouldn't be. Frankly that's not me. I don't want to do that. My personal opinion - and it is only a personal opinion, I'm not trying to convince anyone else or change anyone else's mind - is that I don't need the hassle or risk. I didn't go into contracting to avoid tax. I'm peed off the regulations are written the way they are. It isn't right that I can have no employment rights but be taxed as an employee (worse than one, given the employer's NICs). But the regulations ARE written the way they are so that's that. At the opposite end of the spectrum, I equally don't think some of the ways in which many company directors remunerate themselves are right for me. I think if you earn more, you pay more tax and I think that's 'right'.

Don't think I haven't thought about it a lot and argued it both ways - I'd be bonkers not to have given the financial implications. But that's where I am. Each to their own!

[TheFaQQer]

Don't think I haven't thought about it a lot and argued it both ways - I'd be bonkers not to have given the financial implications. But that's where I am. Each to their own!

When I was permie, I worked with a team of about ten contractors all doing the same thing, in the same way. Nine of them were outside IR35 and one was inside IR35 - mainly because of the poor advice that his accountant gave him.

As long as you've checked it out, then good luck to you

[Glencky]

... and more constructive suggestions whilst writing my last reply..!

Thanks for the hint about rate cuts. My current rate is market rate and whilst I'd obviously not be happy with a 10% cut, it'd still be worth my while if I was enjoying it. Though doesn't mean I wouldn't try and escape on principle. My current contract I took at a rate I knew was 40% below market rate in the UK (it was in a developing country) which I did to get the gig because I knew I'd enjoy it (and I've loved it). This is the kind of reason I went contracting (flexibility/ opportunities). There's no way I'd have gotten it if I had gone in at UK market rate. They were really stretching it to pay me 40% below. But anyway, I've been managing on that so market rate less 10% seems less bothersome to me than to many, perhaps!

Of course I'd be thinking 'shower of bar stewards' and trying to find a chance to get them back...

It's not Barclays, my contract, though. Doesn't stop them taking lessons from Barclays, however!


So am I the only one who would prefer an actual termination clause than being forced to behave in a way that makes them terminate me?!

[Glencky]

When I was permie, I worked with a team of about ten contractors all doing the same thing, in the same way. Nine of them were outside IR35 and one was inside IR35 - mainly because of the poor advice that his accountant gave him.

As long as you've checked it out, then good luck to you

Thanks, I can honestly say my position has NOWT to do with my accountant! Their entire set-up is geared towards me operating outside IR35 and it has taken me a long time to get them to understand I really do believe I should be operating within it. So it's almost 'despite' their advice, not because of it. And if that sounds even more bonkers to you, I can understand! I've got where I've got with all my own research (and I have, genuinely, researched a lot. I was hoping to convince myself I could operate outside...)