Permietractor contract indemnity clauses

[Whorty]

This company I've been offered a contract with don't want to make you use umbrellas and so offer you a contract of employment at contractor rates.......which all sounds like how it should be instead of messing with umbrellas.

I'm just a bit surprised/wary about their entitlement if they feel like I have caused them any loss - I wouldn't expect that in a normal contract of employment. In an umbrella contract there would be no risk of personal liability. Whereas in this contract it sounds like there's a risk of personal liability - or getting into a dispute about it.
"you consent to any deduction from any sum otherwise payable to you, in respect of the value of any claim XXX may have against you where XXX has sustained loss caused by your negligence"

Does this mean the worst that can happen is they don't pay me any timesheets that are outstanding at the time of dispute? i.e. It isn't inviting them to ask for money back that they've already paid me?

If they want you as a permietractor, then get them to set you up as an FTC. Should be easy enough for them to work out the 'salary' they have to pay to ensure that they are paying the same as the day rate you agreed.

No way would I be signing that contract. It makes you personally liable .... so let's assume you do something that causes millions of pounds of loss to them ... how would you feel selling the family home to meet the liability?

[eek]

Ah so they want an employee but make the employee liable in case of a mistake? I would not be happy with that at all.

That's a B2B clause, except in a B2B relationship the client would have to prove a material loss as a result of your actions.

I would also hazard a guess, but IANAL, that this type of deduction from your wages without some kind of due process beforehand is illegal but I may be falling into the 'I don't like it, so it must be illegal' trap.

I don't think that trap applies here (it will be illegal) but it's a risk I wouldn't take.

It would make an interesting employment tribunal but I wouldn't be going near any employment contract with that clause in it - as the entire point is they are managing the work and therefore should be taking the risk.

On the other hand that clause by itself is probably enough for an outside IR35 determination within CEST (mistakes have a financial risk and fixes have to be done outside paid for hours).

Were the OP me, I would be offering to use my limited company and thanking them for the outside determination to watch their reaction.

[SussexSeagull]

Employee levels of taxation and business levels of potential exposure to risk.

Where do I sign?

[ladymuck]

Ah so they want an employee but make the employee liable in case of a mistake? I would not be happy with that at all.

That's a B2B clause, except in a B2B relationship the client would have to prove a material loss as a result of your actions.

I would also hazard a guess, but IANAL, that this type of deduction from your wages without some kind of due process beforehand is illegal but I may be falling into the 'I don't like it, so it must be illegal' trap.

[eek]

That clause goes or I cannot sign the contract.

What are you doing about your pension because I suspect they won't be happy to salary sacrifice the money into your pension scheme?

[PTP]

This company I've been offered a contract with don't want to make you use umbrellas and so offer you a contract of employment at contractor rates.......which all sounds like how it should be instead of messing with umbrellas.

I'm just a bit surprised/wary about their entitlement if they feel like I have caused them any loss - I wouldn't expect that in a normal contract of employment. In an umbrella contract there would be no risk of personal liability. Whereas in this contract it sounds like there's a risk of personal liability - or getting into a dispute about it.
"you consent to any deduction from any sum otherwise payable to you, in respect of the value of any claim XXX may have against you where XXX has sustained loss caused by your negligence"

Does this mean the worst that can happen is they don't pay me any timesheets that are outstanding at the time of dispute? i.e. It isn't inviting them to ask for money back that they've already paid me?