Advice needed: potential breach of outsideIR35 contract terms by consultancy firm

[SussexSeagull]

The Grumpmeister general fairly much covers it. Probably for one of the last times as outside contracts are disappearing.

[northernladuk]

It appears the 4 weeks notice period will be a difficult battle.

Not much of a battle bearing in mind we've just gone to long lengths to explain to you that they aren't contractually obliged to pay you it.

I worked the first five days of July, with some days on client site and responding to end client requests (a bank). I submitted my timesheet to the consulting firm this morning, via an external portal, for these first 5 days of July. It appears they have now revoked my access to the portal, likely as a means to block any sign-off of the subsequent payment of the work delivered.

Is it balls. It's because you are no longer in contract with them so have revoked access to all their systes as their security and common sense policy dictates

In short, it appears they do not want to pay me for the work I have delivered over the first week of July. Could you suggest any follow-up to this? A claim via the UK small claims court?

Wrong again. Turning in a bit of a habit this isn't it. What does you contract say about the payment terms? You know, that thing I told you to read and understand?

You are about as much an outside contractor as I am a blue arsed baboon.. This is exactly why IR35 got canned. Bunch of a perma-tractors not understanding what they are and acting like employees so HMRC decided they wanted their cut.

[TwoWolves]

I remember clients actually paying the notice period before IR35.

This is what the legislation has given us, outside may seem great, but legally it's not such a ball. Either way, inside or out, we have very few rights, and the contracts are toilet paper. If you need a safe cocoon, go work for the state.

[willendure]

One thing that I would do is to ask them to put in writing which termination clause of the contract they are invoking. There will be several termination clauses I think - typically one for immediate dismissal for gross misbehaviour, then your 4 weeks notice by client, then your notice period, and maybe some others.

Once they pick which one they are using to terminate you, it should be obvious whether or not they are complying with that clause. If they are not, point this out to them and ask for compliance.

Is there an agency involved also, between your ltd and the client? Loop them in too, as they are losing their fee on the lost weeks of work if you are terminated early.

[SussexSeagull]

I remember clients actually paying the notice period before IR35.

This is what the legislation has given us, outside may seem great, but legally it's not such a ball. Either way, inside or out, we have very few rights, and the contracts are toilet paper. If you need a safe cocoon, go work for the state.

Must confess every client I have ever had that has served notice has honoured the notice period.

[SussexSeagull]

One thing that I would do is to ask them to put in writing which termination clause of the contract they are invoking. There will be several termination clauses I think - typically one for immediate dismissal for gross misbehaviour, then your 4 weeks notice by client, then your notice period, and maybe some others.

Once they pick which one they are using to terminate you, it should be obvious whether or not they are complying with that clause. If they are not, point this out to them and ask for compliance.

Is there an agency involved also, between your ltd and the client? Loop them in too, as they are losing their fee on the lost weeks of work if you are terminated early.

Is it really worth it? I suspect if people actually pushed the point and asked to be paid for notice period they would probably win in court a lot of the time but it is a lot of effort.

[NotAllThere]

Must confess every client I have ever had that has served notice has honoured the notice period.

I only ever got it once - and that was because the client had to pay the notice fee to the agency.

Mind you - it's the only time I was terminated early. So, yes. They always do it.

[b0redom]

One thing that I would do is to ask them to put in writing which termination clause of the contract they are invoking. There will be several termination clauses I think - typically one for immediate dismissal for gross misbehaviour, then your 4 weeks notice by client, then your notice period, and maybe some others.

Once they pick which one they are using to terminate you, it should be obvious whether or not they are complying with that clause. If they are not, point this out to them and ask for compliance.

Is there an agency involved also, between your ltd and the client? Loop them in too, as they are losing their fee on the lost weeks of work if you are terminated early.

There is no point in doing this. It matters not a jot why the contract has been terminated. It's a business to business agreement and they have invoked the notice period. Everyone has said there is no obligation to offer work. That's one of the central tenets of an outside IR35 determination. Stick an invoice and hope, but don't expect to get paid.

[jamesbrown]

In my experience, it is completely standard for a termination clause with some notice whereby the notice period is a courtesy and no work is performed during that period and no payments are made in respect of that period, which is covered by other contract clauses regarding the provision of work and payment for work completed (e.g., with a signed time sheet or for tasks completed and accepted by the client). As a contractor, you should expect fairly "brutal" (from the POV or a permie) termination clauses that are unbalanced and for which you don't get paid for work not completed because, hey, that is what B2B work looks like. Not providing written notice of termination or following the contract clauses precisely is a bit annoying, but if this ever got to a court, the first thing a court would want to understand is the loss associated with the breach and, in most cases, there is no loss, because other clauses cover payments made for work done.

Honestly, if you've been in this game for a while, you should know that being terminated on the spot with zero payment for work not done is completely standard. Sure, some clients or agents will attempt to also not pay for work actually done shortly before the contract was terminated, in which case I would pursue as a matter of principle (but it has never happened to me). However, you need to be in the mindset of having absolutely zero security as a contractor and you are only paid for work completed. If a T&M contract alludes to payments being made for work not completed - or you actually accept payment for work not completed - then you probably have bigger issues. If would be less of an issue for a FFP contract with staged payments where the payments and work don't necessarily map exactly, but FFP contracts are always properly B2B.

For those working inside IR35 contracts who aren't really in a B2B headspace (and probably should be employed and are likely being exploited to some degree or another, especially on the low end of pay/skills), it can be a tough lesson and isn't really fair, but for an outside IR35 contract where you should be in a B2B headspace, well...

[quackhandle]

You've been very unlucky to run in to this situation which needs a good understanding of everything mention above but from chatting to contractors over the years it does happen more than you realise. A real pisser for sure but it's part and parcel of doing what we do for the megabucks we get for it.

Eh? Who's paying these then?

qh