When is a 12-month contract not a 12-month contract?

mambo

I work in the IT industry, as a self-employed consultant/contractor on a 12 month contract (via an agency).

My contract with the agency (and presumably the agency's contract with the company I work at) states that either side can terminate the contract at a month's notice.

So in what sense is it a "12-month contract", since either side can end it at any time (with 1 month's notice) and it obviously can be indefinitely extended/renewed also, if both sides agree?

pwd

well generally it's seen as bad form for either party to terminate early, unless there is very good reason to do so - the clause is there to allow termination if there is a necessity for it.

pow wow

Because presumably it's for a fixed period of 12 months unless terminated or extended/renewed?

mambo

pwd wrote:

well generally it's seen as bad form for either party to terminate early, unless there is very good reason to do so - the clause is there to allow termination if there is a necessity for it.

What if one terminates after, say, 11 months (and gives notice 1 month earlier, i.e. after 10 months).

Presumably that would not be such "bad form" as terminating after 6 months?

pwd

depends on the situation. If you're being hired to work on a specific project, then leaving near the end might be a lot worse than leaving in the middle, as you'd have a lot of knowledge specific to the project.

kmick

Well the difference between a 12 month contract and a permanent job is that in a permanent role they give you one months notice but also have to pay you statutory redundancy. This is not the case in a contract role. One months notice and good bye. IMHO it is not bad form by the contractor to terminate at any point in that 12 month contract. Employers and Employees are free to terminate under the contract giving one months notice. The only reason you are contract in the first place is so that the employer does not have to pay any of the usual benefits like PRSI, Pension, VHI etc that a permanent worker would get. You don't owe them anything - if they want your loyalty hire you as a full employee and not like a hired gun. A hired gun will move on if someone offers him more money. There is no loyalty in business any more to employees, so why would they expect loyalty in return. As far as I am concerned what you reap you sow and even though it may appear this makes me bitter I have been on both sides (let go and handed in my notice) so I am pretty neutral about the whole thing.

BostonB

mambo wrote:

I work in the IT industry, as a self-employed consultant/contractor on a 12 month contract (via an agency).

My contract with the agency (and presumably the agency's contract with the company I work at) states that either side can terminate the contract at a month's notice.

So in what sense is it a "12-month contract", since either side can end it at any time (with 1 month's notice) and it obviously can be indefinitely extended/renewed also, if both sides agree?

In the sense that if anyones acting the muppet either side can get out of it.

calsatron

You can't be self-employed and have a contract of employment in the first instance.

If your self-employed you invoice the company for work done and beyond that there is no formal relationship between the parties. You manage your own tax affairs.

If your employed then the company has issued a standard fixed term contract to avoid paying benefits that permanent workers are entitled to. Bonus, VHI, Pension etc etc. The term is generally irrelevant as long as it differentiates you from being a permanent employee. They should however be paying PRSI and Tax under the PAYE scheme for you.

Your first move should be clarfiy exactly what your relationship is with the company.

mambo

calsatron wrote:

You can't be self-employed and have a contract of employment in the first instance.

It's not a "contract of employment". It's a contract to provide services.

mambo

kmick wrote:

IMHO it is not bad form by the contractor to terminate at any point in that 12 month contract.

So therefore it might as well be a 1200-month contract for all the difference it would make?

calsatron

If its a service contract then then there may be punitive clauses for either party wishing to terminate early.

If there aren't any such clauses then its just poorly worded and is in effect a "rolling contract" with a one month break notice.

If your doing this long term, i.e. one year plus, as your sole method of income then I'd be careful regarding the whole "contract for services" and "contract of employment" distinction. The revenue will take the view that if your dependent on this contract as your sole means of income then your effectively an employee and attempy to reclassify you accordingly.

calsatron

Oh and if there are no punitive clauses for invoking the break then its a one month contract rather than a 12 month contract, as its only one month that you can gaurantee on a day to day basis.