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End of very long contract - do I get any redundancy?

(6 Posts)
LaineyW Mon 08-Sep-08 10:19:28

I've been freelance writing and sub-editing for one client for about six years now but in light of the current economic situation, they've recently restructured with the result that they're not using contractors any longer.

I've been told by the CEO that since I fall into that category, there is 'no provision for redundancy payments'. Is that right? Is it entirely at their discretion or is there a legal point I could argue, re. length of service?

Hassled Mon 08-Sep-08 10:33:14

As far as I know, they will have no obligation to give redundancy to a standard contractor - i.e. not one of their employees. But there is apparently this sort of grey area if you, as a freelancer, only have one customer for a long period of time - that it effectively makes you an employee and your customer then does have some obligations towards you (certainly in terms of Tax and NI). I might be making this up - it's worth bumping this maybe this evening when hopefully someone who knows what the're talking about is around.

LaineyW Tue 09-Sep-08 09:50:03

Thanks Hassled,

I've asked for advice from an HR consulting company (friend) and he reckons that as long as I don't have a contract which explicitly states that 'no employment relationship exists' then I may well have a case to pursue them for some redundancy. I don't have a contract at all, just a 'welcome' letter. I have also been paid by the BACs system directly into my bank account for years, just like an ordinary employer.

I'll look into it further, but if anyone else does have any experience of this situation, I'd be very interested to hear from them on MN too.

Thanks again.

flowerybeanbag Tue 09-Sep-08 10:04:30

LaineyW I agree with your friend - I have my own HR consulting business, so not surprising! It sounds as though for employment rights purposes you would be defined as a employee and therefore entitled to employment rights including redundancy. Have a look here about defining your employment, there are a series of questions if you scroll down, to answer and find out whether you are self employed or employed. Sounds like you are employed.

FWIW I don't agree with your friend that if your contract specified that 'no employment relationship exist' that that means you are not an employee. Whether or not you are an employee and qualify for employment rights isn't decided by what's written in a contract, it's decided by the nature of your relationship with your employer, using the assessment process I linked to, so a company can't wriggle out of their responsibilities by putting something like that in a contract - that would make it too easy. By using the actual facts of what happens to work it out rather than what a contract does or does not say, it's fairer and more accurate.

have a look at the link, if by reading those questions you think you are an employee, you should claim redundancy and you should also consider the fact that you should have had (for example) holiday pay and all other employment rights which you may or may not have been given access to.

Whether you want to actually claim all of these now is up to you, but it could give you some leverage if you get a negative response. Similarly, it is likely they have not been paying tax for you, and if they were reported to HMRC, they could be in line for a big bill and a big fine...

flowerybeanbag Tue 09-Sep-08 10:16:50

Just to add, you will see from the link that there is a third 'in between' category of 'worker', which can include freelancers. As you will see, as a worker you would be entitled to basic employment rights but not redundancy pay.

LaineyW Wed 10-Sep-08 11:15:34

Thanks very much flowerybeanbag (your MN name belies an obviously great knowledge of employment law!!)

I have decided to pursue them for redundancy, but it never entered my head that I might also be eligible for retrospective holiday pay etc. I have worked for them almost exclusively for more than six years (taking on work for only one other client just a few times in that period.) I pay my own tax and NI.

My HR friend is going to draft a letter for me to make my initial move so we'll take it from there.

Thanks again, I've learned a lot this week...

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