Reply to: Client won't renew fearing employment rights after 2 years

[TheFaQQer]

Bollocks, sorry - I meant benefits of opting out as hinted at by the other poster.

I'll save the agent the time - there aren't any for you, but plenty for them.

[vwdan]

You get paid for doing the work whether the agency gets paid or not.

You get an easier right of return to the client without needing to use the same agency or pay any release fee.

Those are the two major benefits of not opting out.

Bollocks, sorry - I meant benefits of opting out as hinted at by the other poster.

[TheFaQQer]

Could you outline to my board of directors what business benefit there would be to not opting out?

You get paid for doing the work whether the agency gets paid or not.

You get an easier right of return to the client without needing to use the same agency or pay any release fee.

Those are the two major benefits of not opting out.

[vwdan]

Or claim to be independent, risk taking and under their own control - then fail to opt out?

Could you outline to my board of directors what business benefit there would be to not opting out?

[7specialgems]

Hello All,

I have been contracting (via 3 or 6 month contracts) for my client for nearly 2 years. Although I'm told my skills are still needed (and it's a very pivotal point for the project I'm providing services for) their HR department is worried that I will somehow be able to claim employment rights such as redundancy pay. They also think they may be liable for taxes to the HMRC.

They said the only way it could work is if I worked elsewhere and then came back after 3 months, but this does not suit the client or myself.
They have taken legal advice on this, but I'm struggling to understand on what grounds they have come to this conclusion. I have a feeling they're confusing IR35, The Agency Workers Regulations, and the contractor 2 year rule.

Does anyone have any idea of how they may have reached this conclusion and under what regulations?

Some details that might help:
I don't work via an agency.
My contract does not name me and is company to company (I only sign as a director).
My contract states the deliverables of my services.
My contract states makes a point to note my company is outside IR35.
My contract states an expiry date to my services.

Thanks in advance,
Karen.

With respect Karen, it sounds like you yourself now see yourself as an employee of this organisation, irrespective of your client's mangling of their understanding of various items of legislation.

Irrespective of the arguably favourable points you claim to have in your direct contract (although I would be quite interested in how exactly your contract "states the deliverables of my services" if the their project is at a "pivotal" point and you have not "delivered"), were you to be one of the unlucky numbers in the pot that got picked out for an investigation, I'd fear for you.

I am interested in why you are arguing against their position in the hope that you can understanding it and change it, rather than reviewing your skills and the market for your next gig.

[LisaContractorUmbrella]

Or claim to be independent, risk taking and under their own control - then fail to opt out?

This should be interesting

[Andy Hallett]

You have all the moronic contractors that moan about having 'rights' as a contractor and suddenly decide they want their cake and eat it after being with a client a long time. Instead of seeing it as a bloody good deal having a long term contract they suddenly decide they are part and parcel and want the benefits that come with being a permie. Bloody tossers.

I bet they don't contact HMRC advising they are infact inside IR35 and back pay all their taxes!

Or claim to be independent, risk taking and under their own control - then fail to opt out?

[LisaContractorUmbrella]

You have all the moronic contractors that moan about having 'rights' as a contractor and suddenly decide they want their cake and eat it after being with a client a long time. Instead of seeing it as a bloody good deal having a long term contract they suddenly decide they are part and parcel and want the benefits that come with being a permie. Bloody tossers.

I bet they don't contact HMRC advising they are infact inside IR35 and back pay all their taxes!

Shhhhhh calm down dear

[northernladuk]

You have all the moronic contractors that moan about having 'rights' as a contractor and suddenly decide they want their cake and eat it after being with a client a long time. Instead of seeing it as a bloody good deal having a long term contract they suddenly decide they are part and parcel and want the benefits that come with being a permie. Bloody tossers.

I bet they don't contact HMRC advising they are infact inside IR35 and back pay all their taxes!

[DCL]

Thanks All,

I think I'll try proposing the via agency route. *fingerscrossed*

[BlasterBates]

Workers don’t count as fixed-term employees if they:

have a contract with an agency rather than the company they’re working for

Just quoting the legislating on fixed term employees, from the link I posted above.

In other words although there are other ways perhaps to get employee rights, most companies usually try to avoid to have fixed term employees, therefore going through an agency will reduce their risk, but as Lisa points out not eliminate it entirely.

[NotAllThere]

If you offer to go through an agency (with the clientco paying the commission), while it makes no material difference wrt employement rights, the client's lawyers will probably think it does, and everyone will be happy. In fact, if you can get some factoring included with the agency, you might get paid earlier.

(It's what I had to do in similar circumstances).

[LisaContractorUmbrella]

The client is correct in their position - the OP could be liable for employment rights and not necessarily just after 2 years Tech contractor secures full employment rights :: Contractor UK and it wouldn't matter if he worked via a recruitment agency or not. However, the legal department at the company should be looking at his IR35 position before determining that they are at risk

[the_rangdo]

Current clientco has a similar policy and it's annoying.

Despite the fact I was still in the middle of development and they still wnted me, an extension wasn't offered due to being at the 2 year point (ignore the fact their maths was dodgy, I'd done 21 months)

New role appeared in a different department, more money, different agency (that's another story). I did get asked about IR35 at the interview but otherwise they proved if the desire is big enough there are ways around it.

[BlasterBates]

Fixed term employees have the right of redundancy after 2 years. This doesn't apply to anyone through an agency. What you are experiencing is a problem of going direct and one of the key reasons clients use agencies.

https://www.gov.uk/fixed-term-contra...ployees-rights

Now if you are a real business as a Ltd you don't have these rights, the problem is, it's a grey area, HMRC can deem you to be a disguised employee and contractors can use the same arguments to sue an employer, there have been cases of IT contractors sucessfully suing their clients; although it doesn't make sense if they're not paying NI.

As Centurian says HR doesn't really control whether you're a genuine business that's down to the line manager, so their problem is his style of management will determine whether you can sue or not, that's why they have a general rule, to be sure. You're only hope is for the line manager to argue his case.