Reply to: Unable to give notice?

[ruth11]

Mal - did you get a satisfactory response on this from Accountax? We've heard QDOS' version, which didn't really answer the question for me, so was hoping to hear from another professional as well....

[tim123]

We''re not talking about people who don't have a notice period, but about people who do. Subtle distinction perhaps, but quite signficant...

you said:

"you don't have a notice period, therefore you are not an employee"

I am saying "it IS possible for an employee to not have a notice period and therefore that you cannot make the the extroplation that "someone without a notice period cannot be an employee".

tim

[dmini]

That makes less sense - as the contracts under question where Dragonfly consulting was, certainly in my time, were a months notice on either side. I know - I used it & left!

[blacjac]

I think some clarification is required here. Qdos discussed the issue of a contractor being unable to give notice at length and, although HMRC have not attacked the issue directly, it is our belief that it is an avenue that they may well pursue in future. It was actually alluded to in the Dragonfly Consulting judgement – why would the judge mention it if it was irrelevant?

Given the sheer volume of contractors who are affected by the issue we have relaxed our stance with regards to IR35 risk assessments, although we stand by our opinion that it could be a potential pitfall. We are simply trying to pre-empt any future attacks and make our clients aware that it may cause a problem going forward.

How did you come to that opinion? What is the reasoning behind it?

I'm not trying to be argumentative (for a change ), however I would like to know why not having a notice period is a pointer to IR35.

[Qdos Contractor]

I think some clarification is required here. Qdos discussed the issue of a contractor being unable to give notice at length and, although HMRC have not attacked the issue directly, it is our belief that it is an avenue that they may well pursue in future. It was actually alluded to in the Dragonfly Consulting judgement – why would the judge mention it if it was irrelevant?

Given the sheer volume of contractors who are affected by the issue we have relaxed our stance with regards to IR35 risk assessments, although we stand by our opinion that it could be a potential pitfall. We are simply trying to pre-empt any future attacks and make our clients aware that it may cause a problem going forward.

[malvolio]

I for one would be happy with these clauses in my contract.

QB.

OK, I actually don't have a problem with them and they do seem to be common in OG&E. It's the impact on MOO in an IR35 evaluation and the apparent U-turn by the experts that bothers me, which is why we're following up that side of it.

[QwertyBerty]

I think there is some confusion regarding what various IR35 advisors recommend and what is in the contract in the original post. One sided notice period is good for IR35 if it is something along the line below.

Agency/Client Ltd shall be entitled terminate this agreement without notice at any time. The consultant Ltd shall be entitled to terminate this agreement at any time by giving seven days prior written notice. The Consultancy shall only be entitled to charge for services actually performed.

I for one would be happy with these clauses in my contract.

QB.

[eazy]

commercially unrealistic ?

I have the one sided notice period for 5 years in my various contracts. This notice period is quite common in the Oil & Gas sector. I am willing to live with this commercial / financial risk, defeats MOO. Never had a problem with clients accepting this clause

Getting paid during notice period without actually performing any services was commented upon in one of the PCG court cases.

eazy

[malvolio]

I think there is some confusion regarding what various IR35 advisors recommend and what is in the contract in the original post. One sided notice period is good for IR35 if it is something along the line below.

Agency/Client Ltd shall be entitled terminate this agreement without notice at any time. The consultant Ltd shall be entitled to terminate this agreement at any time by giving seven days prior written notice. The Consultancy shall only be entitled to charge for services actually performed.

eazy

That's upside-down actually, and commercially unrealistic.

No matter, the question will be put to Accountax on Monday, we should get a defiinitive answer from them

[eazy]

Notice Clause

I think there is some confusion regarding what various IR35 advisors recommend and what is in the contract in the original post. One sided notice period is good for IR35 if it is something along the line below.

Agency/Client Ltd shall be entitled terminate this agreement without notice at any time. The consultant Ltd shall be entitled to terminate this agreement at any time by giving seven days prior written notice. The Consultancy shall only be entitled to charge for services actually performed.

eazy

[NotAllThere]

This is not correct.

There is no reason at all why a company cannot engange an employee on a fixed term without the possibility of early notice.

Of course it doesn't happen in your normal 9-5 job, but think of things like Football Managers. These people *are* employees, they are on fixed terms contracts and it is quite reasonable for the employer to want them not to be able to give early notice. AIUI there is nothing in law to forbid this.

So having demolished the first of your claims, the rest fails to follow.

tim

There are anti-slavery laws. An employer cannot require anyone to come into work and work - even Football Managers. The employer can either continue to pay the employee, while the employee is on "gardening leave", or cease paying, and the employee is then free to take up other work (subject to any protective clauses in the contract - such clauses having to be very justifiable). Usually, there is only a breach of contract if the employee takes up other work, and/or violates any valid handcuff clauses. In some circumstances, breach could occur for not working throughout a payment period - so if monthly salaried, one month.

This is why notice periods for permanent employees are effectively unenforceable. It would be kind of fun to see what would happen if a football manager just quit.

For B2B contracts, if the supplier fails to give notice, or to supply services throughout the term of the contract, if there is no notice period, then there is a clear breach of contract.

So, yes, there is no law as such preventing no-notice periods for employees, but there's strong argument (IMO) that they are not the same as no-notice periods for B2B.

[malvolio]

This is not correct.

There is no reason at all why a company cannot engange an employee on a fixed term without the possibility of early notice.

Of course it doesn't happen in your normal 9-5 job, but think of things like Football Managers. These people *are* employees, they are on fixed terms contracts and it is quite reasonable for the employer to want them not to be able to give early notice. AIUI there is nothing in law to forbid this.

So having demolished the first of your claims, the rest fails to follow.

tim

We''re not talking about people who don't have a notice period, but about people who do. Subtle distinction perhaps, but quite signficant...

[tim123]

However, employees have to have notice periods, you don't have a notice period, therefore you are not an employee. QED...

...?

This is not correct.

There is no reason at all why a company cannot engange an employee on a fixed term without the possibility of early notice.

Of course it doesn't happen in your normal 9-5 job, but think of things like Football Managers. These people *are* employees, they are on fixed terms contracts and it is quite reasonable for the employer to want them not to be able to give early notice. AIUI there is nothing in law to forbid this.

So having demolished the first of your claims, the rest fails to follow.

tim

[malvolio]

Its still backwards, it's still illogical and it's still 100% opposite to all previous advice. How can having to complete a piece of work wohjouth the option be seen as evidence of employement?

I think I'll challenge this with the experts...

[ruth11]

We've had this discussion before and there are 2 ways to interpret "no notice period".

The one that's good for IR35 means that you don't have to give notice and can walk whenever you like

The one that's bad for IR35 is "not being able to give notice" - ie you are obligated to fulfill the full contract term.

I believe the OP is talking about that latter - I have the same such clause in my contract, but managed to negotiate other areas of the contract so that it wasn't such a big issue and it still passes.