When your IT Contract is terminated
Should you get paid when your IT Contract is Terminated?
Sometimes contractors get terminated from a contract early. sometimes it happens that the client company, or agency, won’t pay the contractor the money due to them for the required notice period.
So, we asked an ex IT Contractor, who is now a barrister, what the legal situation is when this happens. This is what he advises.
Contract Terminated Prematurely
If a contract is terminated prematurely by the agency, without the required notice period being given, or paid, typically two issues will arise:
1. Is the agency entitled to terminate the contract without notice – this will depend on the express and implied terms of the contract
2. is the contractor at least entitled to payment for work done up to the date of termination.
Agency Workers Regulations
The Agency Regulations have an impact on the second issue.
Typically a contract will provide that payment for work carried out is not due unless the contractor supplies a time-sheet signed by the client.
If the client fails to sign the last timesheet the agency may argue that the contractor is therefore not entitled to payment of its final invoice.
Agency Must Pay
However Regulation 12 now prohibits the agency from withholding payment simply because a time sheet has not been signed.
Of course it is possible, in the case of limited companies, to sign an opt-out from the regulations and many contractors are pressed by agencies to sign such opt-outs.
In several recent cases I have advised on, the dispute then revolves around the question of whether the opt-out has been signed early enough to be effective for the current contract.
Specialises in Contractual Disputes
The author of this article, John Antell, is a barrister who specialises in contractual disputes, particularly those involving IT and engineering.
Prior to coming to the Bar he was an IT consultant.
So, you should get paid when your IT Contract is terminated.
Ad – Contractor Services
If you do need an umbrella company you could try one of the following:-
Public Sector Umbrella Company
Or would you prefer to get expert advice about which umbrella company is right for your specific needs? If so fill in the form below and they will be in touch.
For Mortgages specially designed for contractors try Specialist Contractor Mortgages.
