Contract not being extended beyond 23 months
Discussion
Hi,
Really require some help with understanding my situation.
I took on employment inside IR35 / umbrella via a recruitment agency for 12 months.
Around 9 months in, I asked my then line manager regarding contract renewal as this was mentioned at the time of employment. My contract was renewed 3 months early for a further 12 months bringing my total employment time to 21 months.
Again, I raised the question 3 months before the end of my contract about contract renewal, and my line manager stated that they would request a further 12 months.
However my renewal only came back with a 2 month extension to make it 23 months.
Apparently HR won’t extend contract beyond 23 months.
Looking into this, I have tried to find out why and have a vague idea of the 2 year rule in UK employment law.
From the little information I have found (as I can’t find much), contracts can be renewed until 4 years, and then can be extended by mutual agreement to not exercise UK employment law?
Anyone have any definitive information available?
Left me in a little bit of a lurch to find another job in the next 3 months which suits me.
Thank you
PS - work in the pharmaceutical industry as a Quality Assurance Officer. Anyone that can help me find a role, please do. Preferably work from home roles or hybrid, North West based for commuting.
Really require some help with understanding my situation.
I took on employment inside IR35 / umbrella via a recruitment agency for 12 months.
Around 9 months in, I asked my then line manager regarding contract renewal as this was mentioned at the time of employment. My contract was renewed 3 months early for a further 12 months bringing my total employment time to 21 months.
Again, I raised the question 3 months before the end of my contract about contract renewal, and my line manager stated that they would request a further 12 months.
However my renewal only came back with a 2 month extension to make it 23 months.
Apparently HR won’t extend contract beyond 23 months.
Looking into this, I have tried to find out why and have a vague idea of the 2 year rule in UK employment law.
From the little information I have found (as I can’t find much), contracts can be renewed until 4 years, and then can be extended by mutual agreement to not exercise UK employment law?
Anyone have any definitive information available?
Left me in a little bit of a lurch to find another job in the next 3 months which suits me.
Thank you
PS - work in the pharmaceutical industry as a Quality Assurance Officer. Anyone that can help me find a role, please do. Preferably work from home roles or hybrid, North West based for commuting.
Where I work (in IT) the rules are very similar.
Not sure what the law is, but it's largely irrelevant - if they have a rule that says you can't be renewed then that's all that really matters.
The question I'd ask is why your line manager wasn't aware of the rule and didn't advise you accordingly.
Not sure what the law is, but it's largely irrelevant - if they have a rule that says you can't be renewed then that's all that really matters.
The question I'd ask is why your line manager wasn't aware of the rule and didn't advise you accordingly.
hulksta said:
What doesn’t make sense is there are plenty of contractors in the company who have been there on contract for longer than 2 years.
In fact one of the members of the team I am in was a contractor for over 5 years before securing a permanent position.
Virtually no inside IR35 contracts get extended beyond 2 years, the risk is too high as you gain rights that no longer make you part of the flexible workforce.In fact one of the members of the team I am in was a contractor for over 5 years before securing a permanent position.
The colleague you mention is a red herring, they have converted him to perm probably because IR35 made it the only way he could be retained.
Sounds like they have the same rules in place as most of the market and they won't set a precedent by changing them for a sing,e case.
Apologies for thread hijack -
Why would employing somebody via an Agency or Umbrella for longer than 2 years create any kind of employment issues? I'm aware of AWR which kicks in after 12 weeks but beyond that I'm not sure what kind of obligations are created for the Employer if they have had a temp on their books for over 2 years?
Why would employing somebody via an Agency or Umbrella for longer than 2 years create any kind of employment issues? I'm aware of AWR which kicks in after 12 weeks but beyond that I'm not sure what kind of obligations are created for the Employer if they have had a temp on their books for over 2 years?
hulksta said:
What doesn’t make sense is there are plenty of contractors in the company who have been there on contract for longer than 2 years.
In fact one of the members of the team I am in was a contractor for over 5 years before securing a permanent position.
Where i have seen this before it was more of a company policy that if a contractor was needed more than 2 years, they'd rather have them on PAYE, for cost reasons. They did say it was also for compliance BUT tbh I would think they'd be more at risk of compliance problems if they make contractors into permies after a set time - looks more like disguised employment to me if they are doing the same job as they were on contract, but suddenly permie.In fact one of the members of the team I am in was a contractor for over 5 years before securing a permanent position.
I know a certain bank will only allow contract workforce for 51 weeks and then you are required to have a 3 month break before being able to return.
I guess this should have been made clear by your agency at the time of submitting you for the role in the first place, or if the policy had changed they should have informed you during your tenure.
I guess if you are that valuable to the organisation your line manager should be aware of this limit and he should be able to request an extension, although I suspect it will be a hard sell and they would at best probably get you a 3-6 month extension and that would be the final one.
I guess this should have been made clear by your agency at the time of submitting you for the role in the first place, or if the policy had changed they should have informed you during your tenure.
I guess if you are that valuable to the organisation your line manager should be aware of this limit and he should be able to request an extension, although I suspect it will be a hard sell and they would at best probably get you a 3-6 month extension and that would be the final one.
From gov website
Renewing or ending a fixed-term contract
Ending a fixed-term contract
Fixed-term contracts will normally end automatically when they reach the agreed end date. The employer doesn’t have to give any notice.
If a contract isn’t renewed
This is considered to be a dismissal, and if the employee has 2 years’ service the employer needs to show that there’s a ‘fair’ reason for not renewing the contract (eg, if they were planning to stop doing the work the contract was for).
Workers have the right:
not to be unfairly dismissed after 2 years’ service - for employees who were in employment before 6 April 2012, it’s 1 year’s service
to a written statement of reasons for not renewing the contract - after 1 year’s service
They may be entitled to statutory redundancy payments after 2 years’ service if the reason for non-renewal is redundancy.
Makes no difference if it’s via a agency umbrella on inside 35 as there is considered a nexus between the hirer and the worker.
If you want to stay at the same company for more than 2 years I’d suggest negotiating a permanent offer, FTCS by their nature are designed for short term engagements and project based work.
Renewing or ending a fixed-term contract
Ending a fixed-term contract
Fixed-term contracts will normally end automatically when they reach the agreed end date. The employer doesn’t have to give any notice.
If a contract isn’t renewed
This is considered to be a dismissal, and if the employee has 2 years’ service the employer needs to show that there’s a ‘fair’ reason for not renewing the contract (eg, if they were planning to stop doing the work the contract was for).
Workers have the right:
not to be unfairly dismissed after 2 years’ service - for employees who were in employment before 6 April 2012, it’s 1 year’s service
to a written statement of reasons for not renewing the contract - after 1 year’s service
They may be entitled to statutory redundancy payments after 2 years’ service if the reason for non-renewal is redundancy.
Makes no difference if it’s via a agency umbrella on inside 35 as there is considered a nexus between the hirer and the worker.
If you want to stay at the same company for more than 2 years I’d suggest negotiating a permanent offer, FTCS by their nature are designed for short term engagements and project based work.
Countdown said:
Apologies for thread hijack -
Why would employing somebody via an Agency or Umbrella for longer than 2 years create any kind of employment issues? I'm aware of AWR which kicks in after 12 weeks but beyond that I'm not sure what kind of obligations are created for the Employer if they have had a temp on their books for over 2 years?
You are either a contractor, worker, or employee. You can go to tribunal to claim a higher status, and their decision will be based on the working relationship and not just the contract (this can come down to things as small as giving branded clothing as well as things like how much control they have over your working practices).Why would employing somebody via an Agency or Umbrella for longer than 2 years create any kind of employment issues? I'm aware of AWR which kicks in after 12 weeks but beyond that I'm not sure what kind of obligations are created for the Employer if they have had a temp on their books for over 2 years?
If someone is declared an employee before two years, you can still get rid of them for no reason as long as it isn't for having a protected characteristic, so having a court declare your contractor an employee at that stage means you can still end the contract with limited risk. Once they go over two years, it can become a bit more complicated if they are declared an employee.
As an example: https://constructionmanagement.co.uk/tribunal-ruli...
Edited by Mr Penguin on Tuesday 7th March 22:55
Well the agency themselves are slightly confused. Apparently contractors often are employed beyond 2 years without any issue.
Another colleague of mine who managed to secure a permanent role just a month ago was in the third year of their contract.
And they are actively recruiting 3 further contractors to fill roles in the team.
I’ll happily sign something to state I dont care about the 2 year thing and won’t pursue anything.
Clearly the manager wants me around, and recruiters are still coming in.
But I put myself out there, and recruiters are actively coming at me with roles.
I’ll find something.
Another colleague of mine who managed to secure a permanent role just a month ago was in the third year of their contract.
And they are actively recruiting 3 further contractors to fill roles in the team.
I’ll happily sign something to state I dont care about the 2 year thing and won’t pursue anything.
Clearly the manager wants me around, and recruiters are still coming in.
But I put myself out there, and recruiters are actively coming at me with roles.
I’ll find something.
hulksta said:
Also should add, I’m being employed through an agency. My contract is with the agency. Not the company I am working for.
Therefore the 2 year thing does not apply to me.
Your contract isn't the only thing the court would look at and can be overruled. You probably aren't going to do that, but for a lot of companies, its not worth opening themselves up to that risk.Therefore the 2 year thing does not apply to me.
Its entirely possible for them to end your contract after 25 months, you to take them to court for wrongful dismissal, convince a court that you were an employee in practice and the court to award you compensation for the dismissal - even if your contract explicitly says you are not an employee.
wombleh said:
Some organisations put a two year limit on contractors regardless, because their HR thinks it should be a permanent role of it lasts that long rather than a contract.
Our company is 1 year, so similar to a previous poster 51wk max, no return within 26wks. Longer and policy states hiring manager should employ on a FTC.
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