Client wanting to terminate earlier than notice period

**SimonMac** · 22 June 2012, 15:40

Originally posted by Contractoid View Post

I’m sure this topic has come up before but cant seem to find a definitive answer. I have been given notice here (actually not a bad thing, can’t wait to see the back of this place). My contract is 2 weeks but they are already making noises that if I clear up certain items I could leave sooner. A, I right in assuming that they are obliged to pay the full 2 weeks unless I specifically agree to leave earlier that your notice? If this is the case, I can simply refuse to terminate early and if they take my pass etc I can simply bill them for the remaining days and be at home

I seem to recall reading it depends on whether you have opted out or not?

Its not clear cut, I am sure the more learned people here will give you the details but there could be a clause in the contract saying if they have no work for you thy don't have to pay you. If you are happy to go make some sort of compromise to save hassle and keep on good terms, a week maybe?!

**Support Monkey** · 22 June 2012, 15:42

Depends how much you want to P**s them off, for the sake af a few day i would finish up what i had to do bill for what was done and leave on good terms, notice periods are not worth the paper they are written on anyway

**SueEllen** · 22 June 2012, 18:27

Originally posted by Contractoid View Post

A, I right in assuming that they are obliged to pay the full 2 weeks unless I specifically agree to leave earlier that your notice? If this is the case, I can simply refuse to terminate early and if they take my pass etc I can simply bill them for the remaining days and be at home.

They are obliged to pay you for the work you do.

So if the work takes you 2 weeks then they have to pay for that.

If the contract has a notice clause then yes you can demand to be paid for that and take them to court for it.

However if there is a chance of repeat work it is not a good idea to demand payment.

Originally posted by Contractoid View Post

I seem to recall reading it depends on whether you have opted out or not?

Makes no difference it depends on what the contract says.

I've been paid noticed periods by clients who I have contracted with directly (so the regulations weren't applicable) simply because a clause was in the contracts stating if they terminated they would give x days notice. I didn't ask for the money they simply said because we can't take the project further for y reason we are going to pay you the notice.

**Wanderer** · 22 June 2012, 20:07

Originally posted by Contractoid View Post

I’m sure this topic has come up before but cant seem to find a definitive answer.

That's because there isn't a definitive answer.

Without reading your contract, it's difficult to say if they can just terminate you. There are several different views on this, I'll try to summarise them here:

1. Some say that since your contract probably has a clause in it saying that there is no mutuality of obligation (MOO) there is no obligation for the client to offer you any work to do, even during the term of the contract so in theory they could dismiss you without warning. Likewise, you could leave without warning and they couldn't do anything about it.

2. Others say that the MOO clause means that there is no obligation to offer or provide services beyond the duration of the fixed term of the contract. However, for the contract duration you are obliged to make yourself available Monday to Friday to do a professional working day. If either party want to terminate the contract early then they must do it by giving the required notice or terminate the contract by mutual consent otherwise the aggrieved party will be able to claim for damages. If you are not opted out then you may be in a stronger position to claim for your notice period even though you don't have signed timesheets for that period.

Have you done the IR35 assessment? Are you in the high risk category? If you are then having your contract terminated without payment of notice period may be a useful pointer to being outside IR35 but I would also discuss it with the client and make sure that they understand that you are waiving the notice period payment as a good will gesture to them.

**northernladuk** · 22 June 2012, 20:43

I am pretty surprised at some of the responses here. I thought this is pretty black and white on a number of points.

Firstly MOO means there is no obligation to give you work and conversley there is no obligation to do it. period. If they have no work for you you dont get paid. Getting paid for not working is for permies. If you have no MOO in your contract you are a) pretty stupid and b) missing a heavy pointer to being outside IR35. A review would have flagged this. Expecting to get paid for not doing work means you have a hidden permie mentality and could be putting yourself inside IR35 by not acting properly.

Second, tied in with the above, notice periods are for permies and mean squat to us. If the client honour it you have done well. They dont have to. They can put you on notice and then not give you work... so no pay, equivalent to immediate termination money wise. The contract just expires while you are benched

I am sure this has been done numerous times. Just do a search for notice and I know similar situations will come up. There was qutie a long discussion about gardening leave etc.

I would say do all the work they offer, bill for the time you worked and then leave when there is no left. That is the only professional thing to do.

**BolshieBastard** · 22 June 2012, 21:05

Originally posted by northernladuk View Post

I am pretty surprised at some of the responses here. I thought this is pretty black and white on a number of points.

Firstly MOO means there is no obligation to give you work and conversley there is no obligation to do it. period. If they have no work for you you dont get paid. Getting paid for not working is for permies. If you have no MOO in your contract you are a) pretty stupid and b) missing a heavy pointer to being outside IR35. A review would have flagged this. Expecting to get paid for not doing work means you have a hidden permie mentality and could be putting yourself inside IR35 by not acting properly.

Second, tied in with the above, notice periods are for permies and mean squat to us. If the client honour it you have done well. They dont have to. They can put you on notice and then not give you work... so no pay, equivalent to immediate termination money wise. The contract just expires while you are benched

I am sure this has been done numerous times. Just do a search for notice and I know similar situations will come up. There was qutie a long discussion about gardening leave etc.

I would say do all the work they offer, bill for the time you worked and then leave when there is no left. That is the only professional thing to do.

WHS +1

I'm surprised at the comments regarding termination and being paid notice.

**SueEllen** · 22 June 2012, 21:26

Originally posted by northernladuk View Post

I am pretty surprised at some of the responses here. I thought this is pretty black and white on a number of points.

It isn't actually.

I've been informed by a few small business owners who have ended up in trouble, contractors who understand IR35 and contract law, and a couple of lawyers that it's not so.

It depends on how exactly the entire contract is worded and what the clauses say.

This means the MOO clause could be linked to the termination clause or could not. This is why no-one can give an answer whether a contractor should be paid notice or not.

Contracts aren't just about IR35. There are other clauses in there that are important to protect contractors interests which a lot of people learn to late.

This is also why larger businesses employ lawyers to ensure these clauses are written correctly, and lawyers get rich of the back of contract negotiations.

**SussexSeagull** · 22 June 2012, 21:36

This all of course assumes he is claiming to be outside IR35.

**northernladuk** · 22 June 2012, 21:56

Originally posted by SueEllen View Post

It isn't actually.

I've been informed by a few small business owners who have ended up in trouble, contractors who understand IR35 and contract law, and a couple of lawyers that it's not so.

It depends on how exactly the entire contract is worded and what the clauses say.

Absolutely right! I am talking here about the standard ones we as one man PSC's get given and based on the pretty standard responses from the likes of QDOS. At our level a review is more like a tickbox than an indepth understanding of the contract (sorry QDOS and the like, no offense). But yes I am assuming a pretty standard vanilla contract.

This means the MOO clause could be linked to the termination clause or could not. This is why no-one can give an answer whether a contractor should be paid notice or not.

I don't see this at all, again happy to be proven. I think the word termination is a bad word when working with notice. People assume it is a bad thing instead of it meaning the same as being given notice. I don't see how they can be linked and what it matters. They work individually and so can work in parallel if need be. MOO covers from the first to the very last working day, if that is in notice period or normal contract periodn, it doesn't matter. Linking them is what makes it complicated, and because I don't think they are, I don't think it is complicated.

For example...

Contractors are asked not to come in for 2 weeks during a change freeze period of a client. They don't work, they don't get paid. What difference does it make if a contractor is on notice or working normally. They don't come in, don't get paid. That's it. Thinking about it we have seen questions on here where the clients have withdrawn work with the contractor standing in reception. Result is he just goes home, pissed off, but that's the end of it.

Contracts aren't just about IR35. There are other clauses in there that are important to protect contractors interests which a lot of people learn to late.

This is also why larger businesses employ lawyers to ensure these clauses are written correctly, and lawyers get rich of the back of contract negotiations.

Indeed, unfortunately in many cases we are talking about agents who have a set contract however crap it is they won't budge even if common sense says otherwise. My only dealings at this level are with our 'vanilla' contracts so couldn't comment on proper ones.

Client wanting to terminate earlier than notice period