Q. I have been offered a 65 week contract on very favourable terms BUT although the contract has a termination clause in it for non performance etc from the employer side there is none from my side. Even my current one allows me to leave with one months notice. Has anyone had one of these and if I did accept and then want to leave could I on reasonable notice?
A. Having a long contract with no notice period would suggest that there is mutuality of obligation present. If the contract were shorter e.g. 3 months this wouldn’t be as much of an issue, however as the contract is for such a long term this could have an impact on your status. While generally the length of engagement is considered a neutral issue, the longer you are engaged by the same end client the more difficult it can be to argue that you are not part and parcel of the client’s organisation.
If you had a rock solid right of substitution and retained control over your services then IR35 status may be defendable. However it would be advisable to ask the end client/agency to add the same termination rights for your limited company as they have for themselves.
If you are concerned about your status or require specific wording for your contract I suggest you have your contract reviewed by an independent specialist. It is always important to consider your actual working practices in line with your contract as often there can be discrepancies between the two.
This answer was provided by Qdos Contractor
I had one of these, 5 months with instant notice on their side but no right at all on mine ,at a Large Bank. The reason the client did this was lessons learned thru prior rate cuts – basically people would get the rate cut (as they were given on a instant termination at end of day but “here is a new contract with your new rate starting tomorrow, same end date as previous”) but then shop round for a new job. the client wanted for contractors who opted to stay, to actually stay. As it turned out, when contract renewal was offered I told them I would not renew unless the clause was changed to be more fair on my side, which thankfully my boss agreed (she had no idea as the contracts were done by HR).
Incidentally, Qdos advice at the time was very similar to the above. they weren’t so concerned as it was a 5 month contract.
Good luck getting yours changed