Reply to: Early Termination - Work load not sufficient - Compensation ?

[diesel]

beware seen other agencies such as Orion use the "anytime clause" citing they can cancel a contract anytime for "emergency" reasons which only they can declare and state as an emergency to stop u getting paid etc..

read your contract! and if its not fair tell agency to change it or stuff it!

[psychocandy]

Here are the options for you guys in case you didn't know.

1. Look at thread. Decide your not interested and move on. 5 seconds elapsed.

or

2. Look at thread. Type a bit of a whinge about wasting your time or whatever. 1 minute elapsed.

Surely, option 1 is best if your not interested? Am I missing something?

[northernladuk]

Holy pointless thread resurrection.

[eek]

Holy pointless thread resurrection.

[DirtyDog]

How would signing a contract with this in fit in with not opting out? Im guessing since you've specifically agreed to this then its your hard luck.

It's an invalid clause. So assuming that the contract has an "if there is anything in this contract which is invalid, then ignore it" clause, then it would be ignored.

[GazCol]

All well and good and correct as NLUK and others say. No work no money.

But once again, imagine contractor turning around at 5pm and saying, BTW, I know theres a notice period etc but I'm just not going to doing any work for you for the next 4 weeks. So tell you what we'll terminate it now or let it run and I just won;t show.

Can imagine the agent (and client) screaming out that they're going sue!

But the contractor won't have a clause in the contract that says "If there's work and I don't want to do it, the contract can be terminated without a notice period".

Cancellation clauses will always be sided for the client co as they're the ones instigating the work.

[psychocandy]

All well and good and correct as NLUK and others say. No work no money.

But once again, imagine contractor turning around at 5pm and saying, BTW, I know theres a notice period etc but I'm just not going to doing any work for you for the next 4 weeks. So tell you what we'll terminate it now or let it run and I just won;t show.

Can imagine the agent (and client) screaming out that they're going sue!

[psychocandy]

100% agree. Here's a clause that I saw in a contract from Silverlink Technologies:

"Fees [to MyCo Ltd] may be withheld or delayed if a client or customer of the Company [the Agency] who receives the benefit of the Services fails to pay the Company for any reason. If, having paid the Service Company the fees, a client or customer of the Company fails to pay the Company for the benefit of the Services for any reason, the Company may require the Service Company [MyCo Ltd] to repay immediately upon demand such fees as may be referable to the period in respect of which the Company has not been paid."

How would signing a contract with this in fit in with not opting out? Im guessing since you've specifically agreed to this then its your hard luck.

[Wanderer]

With cash accounting VAT rules you pay would VAT only only the monies received. This option makes sense from a cash flow perspective obviously and you don't need to apply to use use cash accounting methods for VAT - just do it

Yep, good advice. Does anyone here NOT use VAT cash accounting?

Ref: HMRC guidance on VAT Cash Accounting

[Contreras]

Won't you owe the VAT man 20% of this invoice value, paid or not?

Using normal VAT accounting rules yes that is the case, but you can claim VAT relief when the invoice is eventually written off as bad debt.

With cash accounting VAT rules you pay would VAT only only the monies received. This option makes sense from a cash flow perspective obviously and you don't need to apply to use use cash accounting methods for VAT - just do it.

Same options apply if you are on the Flat Rate Scheme.

[Pondlife]

Definitely, if you don't invoice for it then they definitely won't pay it! Hell, even if they don't pay because they aren't contractually obliged to pay it then you have an unpaid invoice to show HMRC when they review your IR35 status so that looks good.

Won't you owe the VAT man 20% of this invoice value, paid or not?

[Wanderer]

It is nothing to do with the agency. It is the client that is not paying. If the client doesn't pay the agent the agent can't pay the contractor. If he does no work he doesn't get paid. It is as simple as that.

Um, the contract is between the contractor and the agency. The contract that the agency has with the client is completely irrelevant. If the client doesn't pay the agency then that is the agency's problem, not the contractor's.

Check the contract again

There is probably a clause that says contractor only gets paid for work done, usually with a signed timesheet.

There is probably another clause that says ClientCo is not under any obligation to provide the contractor with work.

The combination of these two clauses effectively means that a contractor can be terminated immediately, for any reason, and with no payment. The notice period is utterly meaningless (on their side anyway).

There are two "probably"s there so we couldn't say for sure without seeing the contract....

"Fees [to MyCo Ltd] may be withheld or delayed if a client or customer of the Company [the Agency] who receives the benefit of the Services fails to pay the Company for any reason.

Good to see that you got that clause negotiated out, but my take on this is that I don't sign the opt out so this clause is unenforceable anyway.

Always attempt. Always be prepared to get nothing or have to go to court to get it.

Definitely, if you don't invoice for it then they definitely won't pay it! Hell, even if they don't pay because they aren't contractually obliged to pay it then you have an unpaid invoice to show HMRC when they review your IR35 status so that looks good.

Jimbo45, it's worth speaking to a legal advisor and have the contract reviewed to get an opinion on what the situation is with your specific contract.

Let us know how you get on, it's always good to know how these things pan out....

[TheFaQQer]

Should the contractor attempt to get the 4 weeks money -- especially as he turned down a 6 month (although slightly lower paying) contract or are the legal costs in the UK just too high so the agencies know they can get away with this type of behaviour.

Always attempt. Always be prepared to get nothing or have to go to court to get it.

There are some posters on CUK who claim that they have done it and won, but I haven't seen anyone provide a court reference to support their posting here.

[GillsMan]

I've never signed a contract that says if the agent isn't paid, he doesn't have to pay the contractor. Generally, I get paid well before the agency gets paid.

100% agree. Here's a clause that I saw in a contract from Silverlink Technologies:

"Fees [to MyCo Ltd] may be withheld or delayed if a client or customer of the Company [the Agency] who receives the benefit of the Services fails to pay the Company for any reason. If, having paid the Service Company the fees, a client or customer of the Company fails to pay the Company for the benefit of the Services for any reason, the Company may require the Service Company [MyCo Ltd] to repay immediately upon demand such fees as may be referable to the period in respect of which the Company has not been paid."

My response: "The relationship between the Company and the Client is not of concern to my company. We therefore cannot agree to the provision that we only receive monies if Silverlink receive monies. We would expect to be paid upon evidence being produced of completion of work, regardless of whether you have been paid. This Clause needs to be removed entirely".

Appreciate that this is a little off topic, but thought it would be interesting anyway.

As to the OP's question, personally I'd be leaving it. As someone else pointed out, a notice period is meaningless anyway, since there is no obligation to offer work. So the Client can just say, your contract runs until X date as normal, but we have no work currently. Same result = you can't invoice. It happens occasionally, but hopefully rarely.

One thing I do to avoid this happening is talking to the client during the initial meeting (interview) about why they need me. It sometimes might come across that I'm trying to talk myself out of a gig, but I'd rather ensure the client is sure they want to proceed with my services before they engage me, than have them realise a couple of weeks in that they don't need me. I had a meeting/interview last week with a utilities provider and pointed out that one of their permie/internal resources is pretty well placed to do the job. Sounds like a nuts thing to do, but if the Client does look for my assistance, I know that it will be needed as they will have considered every alternative.

[rambaugh]

Hi there
I had a colleague who was terminated two weeks into a 3 month contract. The notice period on his contract was 4 weeks but he was told to pack up that same day. The reason for termination was that the Client had over estimated the amount of work required (although he suspects that they've now hired a "Permie" and decided to replace the contractor).

Well you shouldn't be able to have your cake and eat it but that is essentially what the client is trying to do here. Not good business on their part if they are not willing to at least recompense some part of the early termination terms particularly given the fact it was a change in their own circumstances or a result of their own poor project planning.

Unfortunately they are unlikely to be obliged to pay any early termination from a legal stand point. However, things like trust, business reputation and good will are nonetheless important things that don't play out on paper and you can use these to negotiate with. State that you want to leave on good terms and aim to find a negotiated settlement for a shorter termination period (e.g. 2 weeks rather than 4 weeks).