Contract Terminated

[northernladuk]

Why?

Contract length has no link to IR35. Being paid a bonus for successful implementation indicates that there were fixed deliverables. Not meeting those deliverables, and not getting the implementation bonus, might even help the IR35 defence.

I did explain this in two posts up. Yes we all know that a properly worded contract and close eye on working conditions means you can comfortably argue you are still outside but HMRC will take a greater interest as they may (incorrectly) smell a rat. They have, as I already mentioned, partially successfully torn one contractor a new bum hole after him being in a contract for a long time which was a contributing factor. The length itself isn't a problem but being in a contract for a long time it is very easy to take your eye off the ball and fall in to bad habits.

Bonuses are to be avoided and are a bit of a minefield...

IR35 and contracting bonuses

Not delivering might be some added defence and length of contract is defensible but to do that you will have to be under investigation and THAT is what you want to avoid.

[DirtyDog]

Give it a go but it sounds unlikely. He couldn't finish the contract, the reason is utterly irrelevant, so he doesn't get the bonus. Surely this couldn't be any more black and white. There are a lot things that don't make sense in your post though. Contract for 5 years with a bonus? I hope to go he considers himself inside IR35 cause HMRC will eat him for breakfast with that set up.

Why?

Contract length has no link to IR35. Being paid a bonus for successful implementation indicates that there were fixed deliverables. Not meeting those deliverables, and not getting the implementation bonus, might even help the IR35 defence.

[northernladuk]

As the OP stated that his colleague works on a chemical works I've taken it for granted, possibly wrongly, that he is an engineer - I think it's this assumption that has led us to have differing opinions. Regardless, there's too little information provided by the OP for anybody to provide any advice more meaningful than to seek legal advice.

Agreed, although expecting a completion bonus when you didn't complete sounds like a bit of an uphill struggle.

Anyway, I hope they come back and tells us how it went.

[GazCol]

I kind of don't agree but only based on the same assumptions you made to be honest. You can't either of these off without a very clear and detailed understanding of the situation. It could be common as you say but are making an assumption based on the OP's post. I guess, however, I was making the same assumption when I stated he was inside as I was assuming he was a normal day rate contractor. The fact he used the term bonus would lead me to think that is how it worded in his contract. If it was a phased payment surely he would have said that. Only the OP knows but he cannot just dismiss it. He needs to look at the situation very carefully.

Length of contract per se shouldn't make a difference but it is a big flag to HMRC. JLJ part failed as it was a long contract and over time the relationship between the two parties lost focus which ended up with him being considered an employee and part losing the case. Where duration itself isn't the issue it certainly flagged a much bigger and serious problem. People and clients get lax and it only takes a lapse in judgement over that period to make all the difference.

As the OP stated that his colleague works on a chemical works I've taken it for granted, possibly wrongly, that he is an engineer - I think it's this assumption that has led us to have differing opinions. Regardless, there's too little information provided by the OP for anybody to provide any advice more meaningful than to seek legal advice.

[northernladuk]

I agree with the first sentence, but a bonus for completition of a project doesn't illustrate or suggest disguised employment. It's quite common for fixed price contracts that amounts will be paid at intervals during the project lifecycle and an additional amount will be paid if the project is completed to spec and on time. The length of the contract is irrelevant too.

I kind of don't agree but only based on the same assumptions you made to be honest. You can't either of these off without a very clear and detailed understanding of the situation. It could be common as you say but are making an assumption based on the OP's post. I guess, however, I was making the same assumption when I stated he was inside as I was assuming he was a normal day rate contractor. The fact he used the term bonus would lead me to think that is how it worded in his contract. If it was a phased payment surely he would have said that. Only the OP knows but he cannot just dismiss it. He needs to look at the situation very carefully.

Length of contract per se shouldn't make a difference but it is a big flag to HMRC. JLJ part failed as it was a long contract and over time the relationship between the two parties lost focus which ended up with him being considered an employee and part losing the case. Where duration itself isn't the issue it certainly flagged a much bigger and serious problem. People and clients get lax and it only takes a lapse in judgement over that period to make all the difference.

[GazCol]

Give it a go but it sounds unlikely. He couldn't finish the contract, the reason is utterly irrelevant, so he doesn't get the bonus. Surely this couldn't be any more black and white. There are a lot things that don't make sense in your post though. Contract for 5 years with a bonus? I hope to go he considers himself inside IR35 cause HMRC will eat him for breakfast with that set up.

I agree with the first sentence, but a bonus for completition of a project doesn't illustrate or suggest disguised employment. It's quite common for fixed price contracts that amounts will be paid at intervals during the project lifecycle and an additional amount will be paid if the project is completed to spec and on time. The length of the contract is irrelevant too.

[northernladuk]

Give it a go but it sounds unlikely. He couldn't finish the contract, the reason is utterly irrelevant, so he doesn't get the bonus. Surely this couldn't be any more black and white. There are a lot things that don't make sense in your post though. Contract for 5 years with a bonus? I hope to go he considers himself inside IR35 cause HMRC will eat him for breakfast with that set up.

Also being a contractor he is a supplier in a B2B relationship. They company are under zero obligation to support him. If he can't do the job because of his condition they swap him for someone that can. Simple as that. They don't have to put up with him falling asleep on the job. I would read in to what little you have put that they just got rid because of this and have picked the H&S option as an easy get out to remove a problem supplier. Lucky for them the H&S will stick so they can hide behind that rather than just dismiss him for falling asleep while being paid.

[eek]

Tell him to seek out a legal professional.

+1 proper legal advice is required.

Most companies will give you the initial consultation for free so go to two and see what they say...

[Sockpuppet]

Tell him to seek out a legal professional.

[jmo21]

Unlikely, but what does the contract say?

[Wagga]

Hi new to the forum need to ask a question re a colleague of mine. He's been on his current contract for five years. Yesterday he had his contract terminated. The reason. Over the last year he has developed through no fault of his own a sleeping disorder. He sleeps fine through the night even had the tests to prove it, but during the day he has trouble staying awake and when he is awake he is exhausted. This has been noticed by our client. As we work on a chemical works it has been deemed that he is a safety risk and thus had his contract terminated. As part of his contract he was due a bonus upon successful completion of the project which has been withheld. This has amounted to a 5 figure sum. Does he have any recourse for taking further action.

Wagga