Reply to: perm via forced redundancy to contract M-F with change in hours

[poorautojobber]

You're, you're and you're....

Hey I still get payed for the rubbish grammar and spelling so bugger off

[TonyF]

I have also been head hunted so I can’t be all bad

If you've genuinely been headhunted (hint, that usually involves a basic of £100k+) then you probably have nothing to worry about...

[WordIsBond]

I prefer a perm role although never actually been a contractor before so who knows but I like the idea of reducing the number of days I work and while it was only an idea before this could be a convenient situation.

If you prefer a perm role than you should probably consider forgetting IR35 and just do this through an umbrella while looking for another perm role. I'd be hesitant to recommend contracting unless someone really wants to do it. Good money but no security and you can end up working with some pretty frustrating people. Sometimes they are on a power trip and want to put the lowly contractor in his place. Etc, etc.

It's great if you like the challenges and don't mind the uncertainty, and you are compensated pretty well for those things. But it isn't for everyone.

[Sausage Surprise]

Sorry you have to be mad to contract for the company that wants to let you go. HMRC will argue it was inside IR35 if ever they picked it up.
If your going to go Contracting do it properly your a Business, if your not comfortable with the leap go perm elsewhere nothing wrong with that.

You're, you're and you're....

[Ford05]

Thanks for all the replies, some are as expected and others provide some useful suggestions on options etc.

While being made redundant is not an ideal situation its not the first time and I don’t get stressed over it now. I have also been head hunted so I can’t be all bad

Trying to avoid writing too much waffle but while there are some companies I would not consider working for as a contractor this is one that could be useful to me on the skills front and I enjoy working with the rest of the IT team and a lot of the other staff.

Experience and discussions following a large number of redundancies in another company has shown me that they are well aware of the legal requirements and if they have decided your going then there is very little you can do to change that.

My termination contract has been reviewed by an independent solicitor paid for by the company and is actually a very reasonable package so I don’t see the need to create waves..

The suggestions on splitting it into two contracts one inside and one outside IR35 with adjusted rates make sense and something I will follow up with.

As has been noted by several people I will be checking that the tax position on the redundancy package is not compromised by the contracting role.

I will definitely talk to someone who specialised in IR35 type contracts

Special thanks to WordIsBond for some good reasoned suggestions and your second post on why its not always worth fighting the situation and is where I am in my thought process. I don’t like to burn bridges you never know what the future holds.

I prefer a perm role although never actually been a contractor before so who knows but I like the idea of reducing the number of days I work and while it was only an idea before this could be a convenient situation.

This is a process of information gathering and learning, you have all provided different parts and perspectives to the puzzle so thank you for taking the time to reply.

T

malvolio, sorry I’m not at the BBC

[poorautojobber]

Sorry you have to be mad to contract for the company that wants to let you go. HMRC will argue it was inside IR35 if ever they picked it up.
If your going to go Contracting do it properly your a Business, if your not comfortable with the leap go perm elsewhere nothing wrong with that.

[Lance]

It is. Redundancy can only happen if there is no further work for you to do. Clearly not the case here, since he's being offered further work...

It’s not as simple as that. Like most things legal, there are subtleties and nuances.

A role can become redundant, without some of (note not all) the tasks in that role becoming redundant.
This could be a similar case.

Whether the company is pulling a fast one or not is probably best decided by the OP.
If they’re a genuine and honest firm then I’d suggest as others did, take the contract role and be careful about IR35. At the same time look to become a full contractor.
If they’re a set of shysters then talk to unions and lawyers and see what’re you stand. But you’ll never get much and won’t get a good reference.

[TonyF]

It is. Redundancy can only happen if there is no further work for you to do. Clearly not the case here, since he's being offered further work...

And if anyone twigs that, the tax free payoff suddenly becomes salary with PAYE and NI to pay...

[malvolio]

Maybe it is and maybe it isn't. Sounds to me like there's no more full-time role left, and there's no long-term part-time role. If so, OP isn't going to have a full-time role no matter how you slice it. He can fight this, maybe get a better payout than they've offered, but then be out of work in a relatively short time. Or he can possibly leverage the considerable flexibility they've offered him into a start in contracting.

You think they won't find a clear way to get rid of him if they are wanting to shut down the position? 99 times out of 100, they can find a way. What's the point of fighting it? If the long term role isn't going to be there, it isn't going to be there.

It is. Redundancy can only happen if there is no further work for you to do. Clearly not the case here, since he's being offered further work...

[WordIsBond]

The redundancy is a sham and anyone may whistle blow.

Maybe it is and maybe it isn't. Sounds to me like there's no more full-time role left, and there's no long-term part-time role. If so, OP isn't going to have a full-time role no matter how you slice it. He can fight this, maybe get a better payout than they've offered, but then be out of work in a relatively short time. Or he can possibly leverage the considerable flexibility they've offered him into a start in contracting.

You think they won't find a clear way to get rid of him if they are wanting to shut down the position? 99 times out of 100, they can find a way. What's the point of fighting it? If the long term role isn't going to be there, it isn't going to be there.

[SueEllen]

Opposing this is unlikely to end well. If this is not going to be an ongoing full time position, they are going to find a way to make this happen.

OP has a chance to get a piece of the action while they transition this role from full-time to half time to, presumably, nothing. Sounds like they are willing to be pretty accommodating in allowing a lot of changes to take place.

OP, are the tasks clearly defined and definitively spec'd, and are you confident enough of any of them that you could put a fixed cost on them? If you could put a fixed cost on, say, half of the work, then you could:

1. Sign a generic contract that covers non-fixed cost work. Operate that inside IR35. Use it to pay salary and any pension contributions.
2. Sign a contract for fixed cost work, where you have a schedule of tasks, each one has a cost, and you are paid that amount whether it takes half as long or twice as long as you quoted. This contract would be outside IR35.

If this is your only contract, you can afford to overrun a little bit. If you quote a job at 3 days and it takes 4, and you weren't going to be working that fourth day anywhere else, it has only cost you time. You certainly want to be careful to include some cushion in your fixed prices, but using fixed prices is probably the safest way to get at least some of this work outside IR35.

Any company that sacks an employee then offers them contract work immediately shouldn't be touched by that former employee with a barge pole.

The redundancy is a sham and anyone may whistle blow.

Plus it is clear they have an issue behaving honourable which isn't good if you need to get invoices paid by them.

Btw There is nothing stopping the company - like the first one I contracted with - explaining to the staff they are making redundant there is a role but is part-time. In that case there was a guy who was being made redundant happy to take it so he could look after his young children at other times and his wife could work more.

[malvolio]

I was just thinking, does the OP work for the BBC...? Because that's exactly the same scenario as their high-profile presenters are having to deal with.

[northernladuk]

Why would you go part time? Particularly for the t**ts that have just kicked you out?

You aren't contracting. You are doing a permie role just with a different remuneration method. Sack the whole sad situation off and go do it properly full time.

[WordIsBond]

Opposing this is unlikely to end well. If this is not going to be an ongoing full time position, they are going to find a way to make this happen.

OP has a chance to get a piece of the action while they transition this role from full-time to half time to, presumably, nothing. Sounds like they are willing to be pretty accommodating in allowing a lot of changes to take place.

OP, are the tasks clearly defined and definitively spec'd, and are you confident enough of any of them that you could put a fixed cost on them? If you could put a fixed cost on, say, half of the work, then you could:

1. Sign a generic contract that covers non-fixed cost work. Operate that inside IR35. Use it to pay salary and any pension contributions.
2. Sign a contract for fixed cost work, where you have a schedule of tasks, each one has a cost, and you are paid that amount whether it takes half as long or twice as long as you quoted. This contract would be outside IR35.

If this is your only contract, you can afford to overrun a little bit. If you quote a job at 3 days and it takes 4, and you weren't going to be working that fourth day anywhere else, it has only cost you time. You certainly want to be careful to include some cushion in your fixed prices, but using fixed prices is probably the safest way to get at least some of this work outside IR35.

[DaveB]

If there is a union rep at your current employer have a chat with them as well.

Redundancy has some very strict rules around how it can be done and what consultation is required.

Otherwise as was said, get some legal advice. If your employer does not follow the process correctly they are breaking the law.

And if the rate they have offered you for the work as a contractor is not at least 2.5 times what you would earn as a permie turn it down and look for another job instead.