'Contractor' employment rights
Discussion
Just been playing golf with a friend who works as a 'Contractor' for a company he has only worked for, maybe for 4 or 5 months.
He went into the company at a very high level, and whilst has issued a Contract for his services, to which the company have been making payments in line with, they have never actually seemingley signed the Contract and returned it to him.
He was copied in on an email last week, in error, which would indicate the company intend to replace him with someone else, and he was asking me about his rights in these circumstances, ie what would his notice period be.
The contract he has issued states a 2 month notice period by either party, so my opinion was that whilst the Contract may not be signed, there is clearly a Contract in place between the two parties, and as the only Contract issued is the one he issued to the Company, and they have been making payments in line with such, I would be of the opinion that this is the Contract both parties are bound by, and therefore any party who wishes to give notice would need to do so in line with this implied 'Contract'.
He suspect the company will hope to terminate immediately without the need to pay any 'Notice'.
Thoughts ? My comments to him are based on my knowledge of Contracts I deal with day to day, but not employment law, so am not sure if there are correct. Clearly he wants to ensure, if the worst should happen, he is paid correctly.
He went into the company at a very high level, and whilst has issued a Contract for his services, to which the company have been making payments in line with, they have never actually seemingley signed the Contract and returned it to him.
He was copied in on an email last week, in error, which would indicate the company intend to replace him with someone else, and he was asking me about his rights in these circumstances, ie what would his notice period be.
The contract he has issued states a 2 month notice period by either party, so my opinion was that whilst the Contract may not be signed, there is clearly a Contract in place between the two parties, and as the only Contract issued is the one he issued to the Company, and they have been making payments in line with such, I would be of the opinion that this is the Contract both parties are bound by, and therefore any party who wishes to give notice would need to do so in line with this implied 'Contract'.
He suspect the company will hope to terminate immediately without the need to pay any 'Notice'.
Thoughts ? My comments to him are based on my knowledge of Contracts I deal with day to day, but not employment law, so am not sure if there are correct. Clearly he wants to ensure, if the worst should happen, he is paid correctly.
IANAL but think that as he is not an employee then there are no “employee law” type contract/clauses/issues… so standard contract law applies……. If he has sent them a contract and they have acted in accordance with the contract then even though they’ve not signed it then they will be deemed to have accepted the contract in its’ entirety, lacking any proof to the contrary. (Ie an email from them to him saying ok send your invoice in but we don’t accept 2months notice)
If he has a consultancy agreement then he is not an employee or worker and thus it would be a "civil matter" per se, namely contract law.
I would anticipate that he should have few difficulties in showing he has been paid in accordance with that contract thus the notice period should also be a valid clause.
I would anticipate that he should have few difficulties in showing he has been paid in accordance with that contract thus the notice period should also be a valid clause.
ConnectionError said:
My, perhaps wrong, thought is that as there was a contract presented and both parties are working within the wording of the contract the fact that it is not signed does not make it null and void.
It not being signed is neither here nor there. He was conducting the work in line with the contract so from a legal point of view the contract was agreed and valid.There are a lot of factors which could complicate this but presumably if it's all business to business and outside IR35 then the notional contract (with his limited company, not himself) should describe an engagement with start/end dates and/or fixed deliverables and no mutuality of obligation arising beyond that, in which case the client would normally just run the engagement to its natural end and then tell him thanks but that they don't require his services any more. If there's an expectation that he works for them indefinitely until either party issues the required notice, that sounds more like a description of employment.
It also depends on what service they are obliged to consume during the notice period (i.e 5 days a week, 4 weeks a month).
Both parties may be still 'contracted' to each other during this 2-month period but if there is no minimum service in the contract, how much they need to pay during this period might be up for debate.
If he (his ltd company) has a contract that's set out a minimum number of hours per week, and this is what he will be paid for (as opposed to milestones achieved etc) I will be surprised if it passed an IR35 test.
Both parties may be still 'contracted' to each other during this 2-month period but if there is no minimum service in the contract, how much they need to pay during this period might be up for debate.
If he (his ltd company) has a contract that's set out a minimum number of hours per week, and this is what he will be paid for (as opposed to milestones achieved etc) I will be surprised if it passed an IR35 test.
Hobo said:
It’s a limited company he works through, to another limited company.
The contract has a defined start and completion date.
The contract is for five days per week.
So a fixed term employment contract then. But going via LTD sounds like a consultancy agreement.... Or at least an attempt to obviate the relevant laws. The contract has a defined start and completion date.
The contract is for five days per week.
Does his contract have a term that states that they are under no obligation to provide work and he is under no obligation to accept it?
Jasandjules said:
So a fixed term employment contract then. But going via LTD sounds like a consultancy agreement.... Or at least an attempt to obviate the relevant laws.
Does his contract have a term that states that they are under no obligation to provide work and he is under no obligation to accept it?
Honestly don’t know that level of detail on the contract.Does his contract have a term that states that they are under no obligation to provide work and he is under no obligation to accept it?
wombleh said:
Quite often find service contracts will have clauses along the lines of "if there's no work then we're not obliged to keep paying you" which renders any notice period fairly pointless.
If they don't they are unlikely to be considered a consultancy agreement...Hence my question and yes for the above reason. Abdul Abulbul Amir said:
OutInTheShed said:
A proper contractor gets the 'Don't Come Monday' and moves on.
A disguised employee tax evader whines about his 'rights'.
Most contractors have a notice period inline with most commercial agreements where a service is being delivered. A disguised employee tax evader whines about his 'rights'.
I suppose you could have early termination or cancellation penalties but wouldn't the amount payable always be dependent on the amount of work completed up to that point?
AIUI Contractors will have a Fixed scheme of work but some contractors appear to invoice on an "hours worked" rather than "staged payments". the hours worked basis does appear to be "disguised employees" as far as I can see.
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