To feel a bit miffed that I've lost my job through no fault of my own?

[Movinghouseatlast]

I'm self employed in the professional services industry. I had been contracted through another company(a) to provide a service to a client (b) until the end of March next year. I invoice company a who invoice client b for my services. As such I am self employed and have no employment rights or contract. I accept this, have worked in this way for over 20 years and have never had a problem with it.

So the client has pulled the contract due to poor performance of 2 of my colleagues. A director observed them.at work and had a whole list of complaints about them. I wasn't in that day. The next day we are told, with just a weeks notice that that is it, we all are dismissed because the client is severing the contract.

Although I'm self employed, I had been put under a lot of pressure to commit until March next year by company a. I had booked hotels and train tickets in advance, pressured to save money for the client.

I'm in shock really as I have had my income just cut off as of next week.

I actually don't believe the complaints about my colleagues who are consummate professionals. It seems like an excuse. All our service level agreements have been exceeded for example. They have severed the contract on the grounds that the my 2 colleagues were shit at their jobs and made sexist remarks- so they have been able to do it without notice.

I will have no income now. I just wonder whether the director who made the decision should have considered this before making making 9 people unemployed through absolutely no fault of their own?

Hi OP. I'm sorry that people are giving you such a hard time, and evidently appear to be unable to read properly.

You should itemise all of the non refundable expenses you've incurred through to the original end date of the contract and submit the invoice, definitely.

I hope you fill your books back up quickly. Best of luck!

The only two things that surprises me
On this thread is that a self employed person seems like they’re finding it difficult to accept that their assignment has been ended and also that they now can’t pay the mortgage. Self employed assignments end all the time - no security which leads onto the next point- saving up for this eventuality. I find it hard to understand why someone who’s been self employed for 20 years doesn’t understand this and plan for it better

Have you seen the contract and the cancellation terms and checked whether the situation breaches the contract terms?

Hi OP,
When you say dismissed - has your agency let you go? If so are you free to go and sell your services direct to the company that has just ended the contract.

Why don't you try to see the decision maker - tell/show them all about your great work and how you can take on the contract and do more for less (which you can without the agency taking a cut). If it needs more than one person you could tell them you know which one/two of your colleagues are also excellent at their jobs and that you can get them on board - obviously reassure them there won't be any dealings with colleagues accused of being sexist/unprofessional (if they ask) otherwise I would just ignore anything negative at all and focus on what a great job you can do for less that the agency. It sounds like you have nothing to lose by trying anyway.

@SunniDay - there will be non-compete clauses on the company's side where they could be penalised financially for employing her. They may also have cancelled the contract for other reasons and be using the colleagues' behaviour as an excuse. Besides which, contacting them in this situation would be extremely unprofessional and most likely to guarantee OP doesn't get work through the agency she went through again, nor the company.

It sounds to me...as if the client is running very scared of the imminent enforcement of the IR35 rules

I was thinking exactly this as I was reading. Some companies are going to come massively unstuck with this and face huge bills as a result.

And OP's situation doesn't sound IR35 compliant to me. Even if the hiring company can get round the provision of equipment test, it doesn't sound as if OP could send a substitute if she was ill. As HMRC clamp down on spurious self-employment, we're going to see an awful lot more "self-employed" people let go.

Self-employed status has huge advantages for both "client" and "contractor", but unfortunately job security isn't one of them. It's tough to end up out of work when you've done nothing wrong, OP, but it happens to loads of people every day.

Just ask all those who used to work for Thomas Cook ...

I'm sorry to hear this OP. I went self employed for a year and this happened to me three times. The companies I was working for as an associate just let me go with a days notice because of cash flow problems with their business meaning they couldn't pay me and would often pin the blame on me in a very nasty manner to justify their actions.
I'm back back working full time with the NHS now and for the rest of my career. I can't go through that nightmare again.

It appears some posters are confused with the self-employed bit, with that of a sole trader. The type of self-employed OP is talking about is where a company takes you on permanently on a self-employed basis

If a company "takes you on", you are employed. One of the three key principles of IR35, that must be met to be genuinely self-employed, is that of "substitution", whereby the contractor can send another person to undertake the work. By being "taken on" as a named individual, there's no scope for the worker to send another worker in their place.

All three tests must apply to satisfy IR35, so even if the other two tests (control and mutuality of obligation) are met, that still doesn't comply with HMRC rules.

OP your contract was with Company A so what was the notice period and T&C in that contract? In particular, expenses incurred on behalf of Company A should be covered (is there a reason you haven't already invoiced for these?). If your contract does cover such expenses you need a different model next time.

I agree it sounds like they are skirting around IR35 and that could be the cause of the termination.

That's the life you sign up for when you take to contracting unfortunately (along with the lucrative rates and tax avoidance opportunities)

Ah that old trope. Yes there are a small number of contractors at the high end who do this. However, the vast majority of self employed people in this country have no choice in the matter. Entire industries have forced their staff into "self employed" status leading to the zero hours contract shambles people endure today.

If you haven't been taking dividends and aren't set up as a ltd co you are most likely significantly overpaying tax. I assume you don't use an accountant?

You should invoice the company for your expenses and costs until March. If they don't pay, send them a legal demand for payment letter via a solicitor. If they still won't pay, take them to small claims but be aware that small claims is capped at an amount you can claim.

Your contract was terminated based on something that two people who have no affiliation with you did. They are not employed by you. You work for yourself. The only grounds the company had was to chuck the two others off the job. When you agree to a contract, you have to have very good reasons to sever it.

I work in the field of getting payments from people. Something as little as an e-mail accepting work or an e-mail asking for work and it being accepted creates a contract. For example, someone instructs a building company to do a new kitchen for them. Things are going well then another contractor, totally unrelated to the main company comes in and causes damage so the customer chucks everyone off the job. They can't do that. They had no grounds to chuck the main company off the job and due to an accepted quote, they are tied into a contract for materials and labour so the main company have every right to charge them for the full cost of the job with an open ended deal that they will finish it. It's then up to the person if they want the company to finish the job but if they don't, they still owe the full amount.

So in your case, the grounds were not legitimate to sever the deal. I assume you have something written somewhere that they wanted you to do this work for 1 year? There's strict criteria on what a 'deal' or job can be cancelled for.

Your grounds are essentially loss of earnings and unfair severing of the deal or contract. If you do go to small claims, they will ask you to prove the loss of this work could not be compensated by you finding other work and all you need to do there is show the court that you agreed to 1 years work, gave all your time to this one client, booked trips away in advance for this client and it would take you at least X amount of time to find another client offering the same.

However, the vast majority of self employed people in this country have no choice in the matter. Entire industries have forced their staff into "self employed" status leading to the zero hours contract shambles people endure today.

Absolutely. Uber drivers and cleaners are a long way from the £500 a day IT contractors, and they really lose out as they gain precious little from the tax/NI advantages and lose out on holiday pay, maternity leave and other employment rights.

Did you not have a contract with A which stopped them just dropping you?
Usually (especially with a job for a year) there would be a clause in place where they have to give you minimum amount of notice or they have to pay you out of the contract.

If you regularly get employed along side other people then it might be worth updating the contract adding something about not taking on the liability of anyone else work and that your job performance can only be assessed by the work you complete and not be based on other people’s job performance

Surely your contract with company A means you can get your expenses and possibly even earnings?

Being self employed you should set your terms so surely you are protected.

You may have just bought a house, but given your working situation, leaving yourself without funds to cover an eventuality like this, which is always possible, was poor business management.

It's disappointing and unfortunate but not totally surprising, because this is the nature of self employment......and you just have to cover yourself for it happening.

Rather than feeling aggrieved, think about what you can do next time to make sure you're not in this position again. Ensure you've got a big enough stash if cash to see you through, consider the nature of the contracts you sign and what those you work for are committed to, don't just work for 1 company etc etc.

And regarding any expenditure you've carried out in advance, that you were requested to do, yes I would attempt to recover it.

Hope you get another contract soon and get back on your feet.....but don't leave yourself not on exposed again. They might have been taking the pies but you know these things happen and need to protect yourself against them, and if you really don't like the nature of this way of working or can't manage it so it can work for the times work suddenly ends,mas well as when it's pretty lucrative, you might need to consider alternative ways of making a living.

Did you have a contract? Can it be enforced so that they pay you compensation for early termination? You may not have employment rights but presumably you have contractual rights?

Your contract was terminated based on something that two people who have no affiliation with you did. They are not employed by you. You work for yourself. The only grounds the company had was to chuck the two others off the job
This is what I don't understand. Who is now going to provide company b the service?

The only two things that surprises me on this thread is that a self employed person seems like they’re finding it difficult to accept that their assignment has been ended and also that they now can’t pay the mortgage. Self employed assignments end all the time - no security which leads onto the next point- saving up for this eventuality. I find it hard to understand why someone who’s been self employed for 20 years doesn’t understand this and plan for it better

Idontneeditatall summarised it perfectly.

@raviolidreaming Company B don’t want anymore service, that’s why they’re all out of a job.

@raviolidreaming - one of the hundreds of other service or consulting companies working in the area, or contractors directly employed, or redeployed internal staff, or they'll put it on hold. It's rather unlikely that they all have such a specific skillset that literally nobody else in the country can be found, don't you think?

I don't really understand. If you are self-employed, surely your 'colleagues' are just two other consultants/self-employed individuals working alongside you.
So why would your 'contract' be terminated because they didn't perform - they are not linked to you are they?

If you were under pressure to save the company money by prebooking hotels and train tickets, that indicates that they will pay for them on expenses. Put a claim in for them along with a months pay for cancellation of contract.

It's rather unlikely that they all have such a specific skillset that literally nobody else in the country can be found, don't you think?

Well, obviously. But surely it would make more sense for OP at least to carry on when she's already started / knows what's happening / has planned for the coming months. Maybe they could approach company b directly, but obviously depends on the setup which we don't know.

@raviolidreamingCompany B don’t want anymore service, that’s why they’re all out of a job

I can't see where it says that, only that the contract was terminated because of the colleagues' behaviour. It doesn't make sense that OP should lose work too if that is the case. I feel very sorry for them.

@Timeywimey10. Last year I lead a team of professionals to complete a job. Half were permies and half were contractors. The permies each earned around £30k. The contractors earned approx £500 per day. Any overtime for permies was unpaid (expected reasonable hours to get the job done)

Even including ni contributions, pensions,
Holidays etc, the contractors were earning a lot more than the permies. (Most of whom had less than 2 years of service: so no real employee protection).

So, I do understand it

I don't really understand. If you are self-employed, surely your 'colleagues' are just two other consultants/self-employed individuals working alongside you.

The OP had no contract with the end client. They were contracted to a service provider and that service provider had a contract with the end client. The client terminated the contract with service provider so all contractors they have put on the assignment are off the job. Because OP has no contract with the end client she has no legal redress against the end client. She may have a case against the service provider but chances are they have written a contract that covers their arse for just such eventualities. Most contractors have to accept the contract the agency or service provider puts in front of them.