Contracting Matters

I have noticed on several forums and noted through our own data, an increase in “claims” from Contractors relating to early terminations by Agencies and/or End-clients.  In these difficult conditions it is far more prevalent that an end-client would terminate a contract early and this of course can have a huge knock on effect.

But, what does it mean in the context of working through an Umbrella Company and what can you do if it happens to you?

The first place to start is to try to understand the contractual relationship you are engaged in and what this means both in terms of law and practicalities. If you are working through an Umbrella company then the food chain works like this:

1. You are employed as an employee by the Umbrella company;
2. The umbrella company (not you) has a contract with the recruitment agency or end client;
3. The notice period often quoted in contracts and assignments relates to the notice that the agency/client give to the umbrella. (For peace of mind make sure you know what the specific assignment states in relation to notice on the Umbrella);
   
4. You have an employment contract with the Umbrella which will have it’s own employment notice conditions.

If the above is not clear or not understood then there is a tendency when the worse happens (early termination) to raise some form of claim/challenge against anyone that will listen. I should also add that some Agencies don’t always understand the relationship piece and/or sometimes link in the individual.

You must also consider the implications of you “breaking the contract” for a rate increase by going direct or changing Agency/End-client for similar reasons. Don’t be surprised if your Umbrella then has a case to answer to from an Agency/Client and where do they then come to for compensation? (Those Agency to Umbrella notice periods are the issue here) You should also expect to have to change employers as it is probably not a great reflection on that Umbrella and it’s relationship with the customer if they “allow” the practice to be seen as OK.

So what can you realistically expect if you are being professional yet find yourself on the end of an early termination?

• Don’t panic! A quality Umbrella will have an HR function to support and advise.
• You should be employed on a guaranteed hours contract (with a qualifying period) and you may be entitled to some wages.
• You are still employed by the Umbrella and you should work with them to help resolve the issue – it can only help your prospects with that Agency (who are often at the end of the client decision).

It can be very disheartening if an early termination happens and many of the Agency contracts (with the Umbrella) have no notice periods stated so it can be a no win situation. Make sure you keep your Brolly in the loop, work with them for resolution and as an employee of same, you do have rights.  Equally, if you are deemed to be responsible for breaking a contract then don’t be surprised if your employer starts to question the motives.

Times remain challenging and the inevitable can and does happen. It need not be the end of the world and their are some good businesses out there that can help you through it. It’s a tough one when it feels one sided but Agencies (and clients) can also be tomorrows project after the dust has settled.