Furlough anyone?

[simes]

And as the OP states it will show a lack of MoO which would render the inside verdict at the very least unfair....

In my opinion, more than unfair. It goes very much against the ethos of being in a permanent position as dictated by being Inside.

It would therefore be ammunition for the contractor to take to the HMRC as part of a case to demonstrate Actual working conditions, these very same conditions that can only be commented upon After the signing of SDS's, and to grab back various taxes, however that might be done further down the road.

The client can't have it both ways. Inside equates to a permanent ideology and, in this case, MoO. Outside, the client can fling as many furloughs across as they want.

[ascender]

My current client is looking to see what projects can be stopped, so you know what the next step will be...

[SciaticaSucks]

I though I'd quoted a court case?

Sorry, I was clumsily trying to state that it is poor legislation if after nearly 20 years it still requires a court judgement, and that the decision can be dependent upon what judge is sitting that day and what mood they happen to be in. I realise that things can't always be black and white but HMRC prey on this uncertainty and the threat that comes with it.

[northernladuk]

Thank you very much for putting this together, greatly appreciated. To me it demonstrates how useless the legislation is if it open to interpretation and requiring a judgement at tribunal or in court. But of course we all know that.

I though I'd quoted a court case?

[SciaticaSucks]

Have a read of my post on furloughs and MoO and feel free to disagree. No one has posted yet but I can't be completely right....

Thank you very much for putting this together, greatly appreciated. To me it demonstrates how useless the legislation is if it open to interpretation and requiring a judgement at tribunal or in court. But of course we all know that.

[northernladuk]

Thank you NLUK but I don't think a permanent employee can be terminated. I could well be wrong but I thought their job/role could be terminated and as a consequence the employee made redundant, with all associated redundancy entitlements. The client would not be able to immediately bring in a replacement to do the same job as the permanent employee, but could of course terminate a contractor and replace them with someone else immediately.

It just a bit annoying when the client emphasises all the reasons we are exactly the same as an employee in order to generate an inside IR35 determination, and then state we have none of the characteristics of an employee should it come to redundancy or employee benefits.

You are right. I edited my reply but you beat me to it.

There is a difference between tax law and employment law sadly.

[SciaticaSucks]

No. It's a contractual term. Permies can be terminated as well. Termination is nothing to do with the obligation to offer and do work is it really. It might show financial risk but that's not really a very big point if you have the other elements of the contract correct.

Thank you NLUK but I don't think a permanent employee can be terminated. I could well be wrong but I thought their job/role could be terminated and as a consequence the employee made redundant, with all associated redundancy entitlements. The client would not be able to immediately bring in a replacement to do the same job as the permanent employee, but could of course terminate a contractor and replace them with someone else immediately.

It just a bit annoying when the client emphasises all the reasons we are exactly the same as an employee in order to generate an inside IR35 determination, and then state we have none of the characteristics of an employee should it come to redundancy or employee benefits.

[northernladuk]

Have a read of my post on furloughs and MoO and feel free to disagree. No one has posted yet but I can't be completely right....

https://www.contractoruk.com/forums/...ml#post2702427

[eek]

Out of interest, would having the contract terminated early demonstrate a lack of MoO as well?

The contractor I sit to was told in December that his contract was terminated due to project restructure. However, around the same time one of the permies resigned and he had a stay of execution. He argued his inside SDS that the termination showed a lack of MoO and that they could not terminate a contract of employment. The client basically told him to suck it up.

I suspect if they terminated the contract early the typical notice period is so short (say a week) it would be worked or just paid.

[northernladuk]

Out of interest, would having the contract terminated early demonstrate a lack of MoO as well?

The contractor I sit to was told in December that his contract was terminated due to project restructure. However, around the same time one of the permies resigned and he had a stay of execution. He argued his inside SDS that the termination showed a lack of MoO and that they could not terminate a contract of employment. The client basically told him to suck it up.

Yup. They weren't obliged to give him work after the restructure, they just got rid.

You are mixing two areas up here though. the obligations within contract and the abscence of MoO once the original obligations have been completed. They are not the same thing. Don't roll it all up in to one MoO.

I wrote a long thread on MoO and furloughs which I didn't get any responses but expect there to be arguments. Ill find it and post again to maybe re-open the discussion.

[SciaticaSucks]

But is it better to offer an indefinite furlough or just terminate the contract immediately?

Out of interest, would having the contract terminated early demonstrate a lack of MoO as well?

The contractor I sit to was told in December that his contract was terminated due to project restructure. However, around the same time one of the permies resigned and he had a stay of execution. He argued his inside SDS that the termination showed a lack of MoO and that they could not terminate a contract of employment. The client basically told him to suck it up.

[Paralytic]

But is it better to offer an indefinite furlough or just terminate the contract immediately?

That was my immediate thought too - I can see the client hoping the contractor would accept, so they could get them back in if things pick up again, but any contractor put in such an open-ended position would surely immediately start looking elsewhere for a new role?

[eek]

Hmmm... Good point. We haven’t seen it yet but I wouldn’t be at all surprised if we don’t see furloughs in the very near future.

And as the OP states it will show a lack of MoO which would render the inside verdict at the very least unfair....

Now I was expecting such things to be an issue in December but given this week's news it's highly likely it's going to be sooner than that.

But is it better to offer an indefinite furlough or just terminate the contract immediately?

[cojak]

Hmmm... Good point. We haven’t seen it yet but I wouldn’t be at all surprised if we don’t see furloughs in the very near future.

[SciaticaSucks]

I was wondering if anybody inside IR35 from 6 April is concerned about Covid-19 causing clients to postpone projects and issue a contractor furlough for a few months while allowing permanent staff to continue in a BAU capacity? I could cope for a reasonable period of time but would be worried if it went on too long.

I know we have spoken about furloughs at Christmas time before but would an enforced furlough for a couple of months demonstrate a lack of mutuality of obligation? Would the fact that work has been found for permanent members of staff emphasise the difference and would this potentially demonstrate a key outside IR35 characteristic?

My existing client went to great lengths to describe all of the inside IR35 characteristics of the current working practice including the fact that there most definitely is a mutuality of obligation. They clearly stated that I would be obliged to accept any work they offered and they are obliged to offer me continual work for the duration of the contract.

Would there be any means for me to challenge the previously determined inside IR35 determination again based on this new evidence?

Thank you