An alternative to notice period clause

[TheFaQQer]

As it's cropping up all the ****ing time at the moment - has anyone managed to successfully reword the notice clause in a contract so that it's something that would pay out in the event of early termination?

In the event of early termination by [Agency], an Early Termination Fee in the amount specified below shall become due. The Early Termination Fee will be £[daily rate * 28] minus £[daily rate] for each professional working day completed between notice of termination being served and termination of the contract.

Something like that?

[northernladuk]

That is very nice but going back to the reality of it

A) How many agents would agree to having this in their contract?
B) Can most contractors afford to push for this and walk?

And more interestingly how would this work with the clause that if the agent doesn't get paid by the client he isn't obliged to pay the contractor (or whatever that wording is).

Surely whatever penatly you included it would not be paid out due to the agent not being paid by the client and so a waste of time?

I don't think there is an alternative to this issue. The relationship between agent and contractor just doesn't lend itself to this type of clause. I think you like it or lump it and just hope the number of unscrupulous people that pull this one stays low. We have had had a lot of people moaning about this in the last few weeks but I would bet it is a tiny majority of those that will honour it.

[TheFaQQer]

And more interestingly how would this work with the clause that if the agent doesn't get paid by the client he isn't obliged to pay the contractor (or whatever that wording is).

Surely whatever penatly you included it would not be paid out due to the agent not being paid by the client and so a waste of time?

Don't opt out, they have to pay you.

[BolshieBastard]

As it's cropping up all the ****ing time at the moment - has anyone managed to successfully reword the notice clause in a contract so that it's something that would pay out in the event of early termination?



Something like that?

Why? Its a massive pointer to being IR35 caught (ask any contract review lawyer).

[TheFaQQer]

Why? Its a massive pointer to being IR35 caught (ask any contract review lawyer).

I would have thought that it was less of a pointer than trying to get a notice period - it's more B2B (or at least I think so). You aren't getting paid notice, you are including a penalty clause for early termination of the business relationship - same way that any mobile phone provider will try to penalise me for breaking the contract early.

That said, when I suggested that getting paid for not doing any work was an IR35 pointer, I was told

A 'posting of utter pish' alert smiley would be useful here

so what do I know about it?

[BolshieBastard]

I would have thought that it was less of a pointer than trying to get a notice period - it's more B2B (or at least I think so). You aren't getting paid notice, you are including a penalty clause for early termination of the business relationship - same way that any mobile phone provider will try to penalise me for breaking the contract early.

That said, when I suggested that getting paid for not doing any work was an IR35 pointer, I was told
so what do I know about it?

It would only be seen as a B2B clause if you can get a specific penalty clause for early termination inserted plus a penalty clause on your own co if delivering late \ overbudget etc then I could agree. But if its just a one way 'you're contract is finishing early' type thing then it will be considered akin to money in lieu which is what permies get.

[TheFaQQer]

It would only be seen as a B2B clause if you can get a specific penalty clause for early termination inserted plus a penalty clause on your own co if delivering late \ overbudget etc then I could agree. But if its just a one way 'you're contract is finishing early' type thing then it will be considered akin to money in lieu which is what permies get.

What if it's bilateral - if they terminate early, then the penalty kicks in; if you terminate early, you pay them a penalty fee?

Clients these days seem to be wanting to put in clauses which stop the contractor giving notice, which implies that they are worried about contractors jumping ship. Including a penalty clause which compensates them if you jump ship might help alleviate the mistrust.

[TestMangler]

Why? Its a massive pointer to being IR35 caught (ask any contract review lawyer).

I've just reviewed some advice from mine. He says you are talking utter bollocks.

HTH.

[Sockpuppet]

Why? Its a massive pointer to being IR35 caught (ask any contract review lawyer).

Is it? I take it you've never seen a contract with penalties for cancellations. I'll remember that the next time I book a car in for service and cancel with less than 24hrs notice.

[Wanderer]

has anyone managed to successfully reword the notice clause in a contract so that it's something that would pay out in the event of early termination?

Nice try but I don't think any agency is going to accept that one.

The other interesting point is that a client could tell the contractor "don't come in tomorrow" then the agency could turn around to the client and charge them for the notice period but not pass this money on to the contractor....

Lots of people seem to think that a notice period means nothing because there is no MOO but then why even have it in the contract if either party could just serve notice and point to the absence of MOO then walk away?

I guess it's a bit of a moot point but I'd be very interested to see if anyone has been paid off for their notice period and if the agency paid up willingly, backed down after legal action or if a case was brought by the contractor and won/lost in court. Maybe we should have a poll?