Project Ended, No Work, but not given notice period?

[Noosa]

Hi,Been contracting with client for many years. Latest project came to an abrut end as they decided strategically to do something else. All of my team have been let go or returned to oringal business lines (perms), but, they have said they want to keep me on to do something else, although they don't yet know what that is . .

I have a 3 month notice period. Long I know, but it was a long term project and it worked for both of us given that they wanted me to see the project through to the end, and I was buying a house so a known amount of cash would be handy. Current contract would organically expire 28 Feb 2014 anyway.

So, my questions are:
1) If they discover there is no work, the must give me 3 months notice correct?
2) They either need to fill that time, or, pay me to go home?
3) Are there any grounds that they can just let me go and not honour the contracted notice period.

I don't believe they would do point 3, as I said many years on and off with them and we have a very good relationship. But I am just a bit worried that with all the nice words in the world, I could get released. Plus, not having much to do is driving me a but crazy . .

Yes - I have started to look on the job market, just in case something amaze came up and I wanted to 'renegotiate' my 3 month notice.

Any advice otherwise? Has this happened to anyone else? Its a bit strange they didn't put me on notice along with everyone else, other than they should try and get their (3 months) moneys worth and presumably 'think i'm alright'

ta muchly x

[SueEllen]

This is what they can do:
1. Tell you not to come in because there is no work, AND,
2. Give you notice

No work means no pay. This means you have 3 months of doing nothing at home with no money waiting around in case the client calls.

Alternatively if they are nice you both could come to some mutual agreement where you leave early. This means you don't have to wait around in case they have something for you to do.

Are you inside or outside IR35? As if you are waiting for them to give you work you are inside and should pay tax accordingly.

[Damon]

I think it is clear that you should keep as busy as you can with them whilst looking for another contract.

Given the circumstances if you do find an alternative gig you have the option, approach the client and their hand will be forced so win win.

Worst is you get dropped and you look for another gig. But that is part of contracting that we all must accept from time to time.

[northernladuk]

Hi,Been contracting with client for many years.

I would be willing to bet HMRC don't agree and will be quite happy to pursue you as a disguised employee.. Why?

Your client want to keep you on even though there is no work. I am sure this is going to blow you MoO from one side or the other.
You are working without a clearly defined schedule of work and are being given work by your client to tide you over so D&C is clear.
You have a 3 month notice period which is bad for IR35 if it is on both sides (links below)
Is it safe to assume you haven't been over diligent with your contract schedules to make sure you are doing only the work detailed in them or just do whatever the client asks you to?
You are expecting to get paid for work you didn't do.
The client clearly sees you as a permanent part of the infrastructure and...
You have been there a number of years, which alone isn't an IR35 pointer but coupled with a permie notice period and D&C it becomes an issue.
You are thinking like a permie.
and I am sure many other points that haven't been mentioned.

I do hope you have IR35 insurance and have had all your contracts/working conditions checked regularly.

So, my questions are:
1) If they discover there is no work, the must give me 3 months notice correct?
2) They either need to fill that time, or, pay me to go home?
3) Are there any grounds that they can just let me go and not honour the contracted notice period.

I don't believe they would do point 3, as I said many years on and off with them and we have a very good relationship. But I am just a bit worried that with all the nice words in the world, I could get released. Plus, not having much to do is driving me a but crazy . .

Yes - I have started to look on the job market, just in case something amaze came up and I wanted to 'renegotiate' my 3 month notice.

Any advice otherwise? Has this happened to anyone else? Its a bit strange they didn't put me on notice along with everyone else, other than they should try and get their (3 months) moneys worth and presumably 'think i'm alright'

ta muchly x

Notice periods are for permies. You get paid for the time you work, they can give you 3 months notice if they want to but they are not obliged to give you work so you don't get paid for the 3 months. Effectively immediate termination. In fact immediate termination would probably be better if there are any clauses in your contract about not working for other companies while contracted to them. Best to agree to cancel the contract and release you immediately.

I am sure others will come on and tell you to charge them for your notice period if they decide to get rid of you immediately and there is some logic in this but for 3 months? That is surely starting to push the envelope.

Don't go for a 3 month notice period again IMO

Some reading on notice periods here.

MBF Design Services Limited vs HMRC: IR35 is why it pays to have no notice period :: Contractor UK

Recalling case law history, the tribunal was reminded that “the requirement for mutuality [of obligation] is satisfied if in each individual contract there is an obligation on the employer to continue paying, and the employee to continue working, until the specified work is complete.”

Your work is complete but you expect payment.

IR35 Guide - Contractor Weekly

If a contractor is not able to terminate their contract early, or has a notice period in excess of one month, the contract will fall inside IR35.

[kingcook]

I think it is clear that you should keep as busy as you can with them whilst looking for another contract.

Given the circumstances if you do find an alternative gig you have the option, approach the client and their hand will be forced so win win.

Worst is you get dropped and you look for another gig. But that is part of contracting that we all must accept from time to time.

Keeping busy with them would work quite will if the OP doesn't care about their IR35 status.

As for the worst thing happening, the worst thing that could happen is that the OP decides to keep busy somehow and then investigated by HMRC, then having to pay 5h1t loads of tax back due from the previous X years. Tax due for each of those years could well be into 5 figures. £X0,000 is a lot of money to lose.

[psychocandy]

Head down. Pretend to look busy. Look for another contract. Wait until they realise they can save a load of money by getting rid (it'll be ages). Until then keep on invoicing or leave if something else comes along.

[northernladuk]

Head down. Pretend to look busy. Look for another contract. Wait until they realise they can save a load of money by getting rid (it'll be ages). Until then keep on invoicing or leave if something else comes along.

You are forgetting the OP might also have a 3 month notice so might be better to take the option to go or hope you can negotiate a clean cut and not the full three months. They are more or less in the same (and in fact worse than most) permies with that notice period.

[Damon]

Keeping busy with them would work quite will if the OP doesn't care about their IR35 status.

It's a valid point you make; I guess I was considering any IR35 determination on this contract would probably already have enough 'evidence' given the overall setup and terms. Difficult to know without the detail as always

Given the overall situation at the client then it does sound like it is time to cut and run.

[Noosa]

Thanks everyone.

My contract was firmly inside IR35 until this point, and further supported by delivery based bonus payments throughout the duration. Yesterday they confirmed they will let me know end of next week what other projects they have and if I would like to take one of those on, and I am actively employed closing down the old project until 28th Nov. So only after that do i consider myself at risk of a) no work no pay and b) IR35 status changing.

Lets see. In the meantime, hello Jobserve.

[Sausage Surprise]

Hi,Been contracting with client for many years. Latest project came to an abrut end as they decided strategically to do something else. All of my team have been let go or returned to oringal business lines (perms), but, they have said they want to keep me on to do something else, although they don't yet know what that is . .

I have a 3 month notice period. Long I know, but it was a long term project and it worked for both of us given that they wanted me to see the project through to the end, and I was buying a house so a known amount of cash would be handy. Current contract would organically expire 28 Feb 2014 anyway.

So, my questions are:
1) If they discover there is no work, the must give me 3 months notice correct?
2) They either need to fill that time, or, pay me to go home?
3) Are there any grounds that they can just let me go and not honour the contracted notice period.

I don't believe they would do point 3, as I said many years on and off with them and we have a very good relationship. But I am just a bit worried that with all the nice words in the world, I could get released. Plus, not having much to do is driving me a but crazy . .

Yes - I have started to look on the job market, just in case something amaze came up and I wanted to 'renegotiate' my 3 month notice.

Any advice otherwise? Has this happened to anyone else? Its a bit strange they didn't put me on notice along with everyone else, other than they should try and get their (3 months) moneys worth and presumably 'think i'm alright'

ta muchly x

Look in your contract would be my advice?