Reply to: 2 year rule according to client

[northernladuk]

Usually if such a rule exists it is because someone misunderstood the HMRC rules but that said, most companies should implement it (with ability to make exceptions) in my opinion on the basis that if you have a contractor working for you for 2 years in the same role you probably should have permie doing the role

To many companies taking advantage of the contracting market to avoid employment obligations and if rates stay down even more will do it

Which, reading between the lines, also then means then that the contracter fulfilling this role which common sense dictates should be permanent puts them right in the firing line for IR35 however much they have tried to avoid it through worded contracts. This is just a generalisation and not the start of debate of IR35 by the way.

[Not So Wise]

This isnt the HMRC 2 year rule, its the clients '2 year rule' which is shrouded in mystery. <snip>
is it something official or something someone's pulled out of their hat?

Usually if such a rule exists it is because someone misunderstood the HMRC rules but that said, most companies should implement it (with ability to make exceptions) in my opinion on the basis that if you have a contractor working for you for 2 years in the same role you probably should have permie doing the role

To many companies taking advantage of the contracting market to avoid employment obligations and if rates stay down even more will do it

[northernladuk]

I am aware in all three of these companies these have been waived on many occasions. I am also aware all of them and others that a wangle has been found to put you through a 'managed service' provider and so take you off the headcount. Stupid thing is the charge to the company goes up as they have to pay the cut to the MS as well as the agent.

Completely different view from the guys on the ground to the HR policy makers.

[Fred Bloggs]

GSK tried an 11 months and 2 weeks rule but it fell out of favour after they immediately had to sack several key players who had been there for more than a year and the projects suffered badly. They do have a corporate policy but I am led to understand that it relies heavily on a preferred supplier agreement indemnifying them in some way against contractors claiming employee rights.

[lukemg]

AZ are keen on an 11-month goodbye, for supposed employment rights reasons (I believe a couple of chumps tried this on), but people who had been there for years before hand could stay on the basis that the co was already exposed to possible claims.
On the good side, it processed a few jobs back into the market for others to take (the pm's used to do 11 months on 3 off for years - sweet) but not so much fun when you get processed back out.
Barclays I think try for a 51-week rule for the same reason.
Sure this has been discredited as a valid reason but I can understand why they want to keep a grip on contractors becoming furniture.

[BolshieBastard]

Been at my current client, a large American bank (!) for just over 3 years now. I've heard they dont tend to keep contractors for more than 4 years although Im aware of some who have been.

One of those wasnt very good while the other was, so, it is nothing to do with how important or good you are.

Im getting itchy feet though. The travel is a drag so maybe if they offer a renewal in November I'll opt to leave.

Bottom line is, you put up with what your client co says. If you can get someone to bend 'their' rules for you, all well and good. Otherwise its part of a contractors life.

[MikeC1408]

Current client also has a 9 month rule, but this only applies to Temps.

The only rule they put on me after 2 years was I couldn't change my Ltd for the rest of my contract.

[jmo21]

current client co has a 9 month rule so end of current contract will be that for me.

I'm sure however if someone high enough up the chain wanted me to stay then that could be overridden.

[Coalman]

From our side it is a sign of a well run business, from the client side it isn`t. As much as I like a long contract (as I`m sure we all do), the client should be hiring or retraining a permie instead if they need someone for the long term.
Also,it can affect the permies (jealousy and all that green eyed stuff), so keeping us on board for a long time isn`t good for staff moral. I remember once hearing my self the words "the union aren`t happy with our crap pay rise when the <government client> employs a lot of expensive contractors for sometimes a few years"

This is not always true. I work on projects that typically take between 18 months and 30 months to complete so a two year rule would be very detrimental to the client and the clients project.

[SuperZ]

It's mythical. If you are entitled to employement rights by virtue of your position you are entitled to them on the first day your there every bit as much as you are after two years. You can argue that staaying with a client for a long time is a sign of a well run business: clearly your client is happy, you have a steady profit stream and you have minimal overheads keeping the business running.

They're being dumb. Sadly, they're also well within their rights to set whatever rules they want.

From our side it is a sign of a well run business, from the client side it isn`t. As much as I like a long contract (as I`m sure we all do), the client should be hiring or retraining a permie instead if they need someone for the long term.
Also,it can affect the permies (jealousy and all that green eyed stuff), so keeping us on board for a long time isn`t good for staff moral. I remember once hearing my self the words "the union aren`t happy with our crap pay rise when the <government client> employs a lot of expensive contractors for sometimes a few years"

[northernladuk]

You can kind of understand most companies won't know what on earth is going on here and won't commit. I would guess they generally don't spend much time investigating HR policy for contractors and if someone suggested that they need to put something in place for contractors approaching 2 years service he would get shot for wasting so much money on contractors over such a long period of time.

Hardly suprising the permies are treating it like a hot potatoe and doing their best to walk away from the issue or cover their backs.

Part of contractor life i would have thought.

[sal626]

My friend was at clientco (Big oil) and the new VP came in and decided any contractor there longer then two years had to go, and could not return for 12 or 18 months. Nothing to do with HMRC, risk etc…..the VP just didn ‘t like contractors – he thought they cost the company more then a permie.

[Clippy]

Sounds like more HR nonsense.

[Moscow Mule]

I was told by a chap from Vodafone that their policy is 6 months...

[malvolio]

I have been on my current gig for just under 2 years and am about to get kicked out due to the '2 year rule'.

This isnt the HMRC 2 year rule, its the clients '2 year rule' which is shrouded in mystery. I say this because my project manager cannot get a straight answer from the big bosses up above about why I cant continue after 2 years and how long I need to be absent if I was to return on a future gig.

Is this '2 year rule' commonplace amongst clients and is it something official or something someone's pulled out of their hat?

It's mythical. If you are entitled to employement rights by virtue of your position you are entitled to them on the first day your there every bit as much as you are after two years. You can argue that staaying with a client for a long time is a sign of a well run business: clearly your client is happy, you have a steady profit stream and you have minimal overheads keeping the business running.

They're being dumb. Sadly, they're also well within their rights to set whatever rules they want.