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Thread: Contract review

  1. #1

    Nervous Newbie


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    Sep 2015
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    Default Contract review

    About to start my first contract and have had it reviewed for IR35 status. It has passed the majority of the tests, including the key 3, however it has been failed overall. I have asked for clarification around this, as a competitor website states:

    'Three elements must be present for the contract to be one of employment; personal service, mutuality of obligations and control. If any one or more of the three elements is missing, then it cannot be regarded as an employment situation.'

    One clause is deemed 'too controlling', yet 'Control' is an overall pass.

    Personal Service/Substitution Pass
    Control Pass
    Mutuality of Obligation Pass
    Financial Risk Pass
    Length of Engagement Pass
    Basis of Payment Pass
    Non-exclusivity Pass
    No Employee Benefits & Rights Fail
    Intention of Parties Pass
    Right to Terminate Pass

    So now I'm wondering if I should get a second opinion, or if that would be throwing good money after bad.

    I've taken up the points raised and asked the agency to amend the contract. This was met with email silence, but when I phoned to chase was told that 'legal are unlikely to change it, I'll call you when I hear back from them' which does not inspire much confidence. Call me a cynic, but given I'm due to start a week on Monday, I'm guessing they're just sitting tight and waiting to see who blinks first. I'd love to play hardball, but realistically I can't afford to not sign either way.

    I understand IR35 is anything but black and white, but some of this review seems pretty contradictory. 2nd opinion time?

  2. #2

    More time posting than coding

    Snarf's Avatar
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    Default

    Whats the clause in the contract that has failed...

  3. #3

    Default

    Before getting a second opinion, ask the reviewer to negotiate directly with the agency, as they're more likely to listen to the reviewer (assuming you're using a review service that offers this). Ultimately, though, translating a bunch of specific attributes of a contract into an overall pass/fail involves a degree of subjectivity and risk tolerance that will vary between reviewers, and you'll need to make the final call yourself. I'd question the motivation for including length of contract in a review, as this has no bearing on IR35 status. However, I wouldn't expect to see employee-type benefits in a B2B contract, so I could understand that resulting in an overall fail if the reviewer has a low risk tolerance, even if the pillars are there. I also have no idea why the engager would be averse to removing such benefits, whatever they might be (i.e. they probably can't be bothered, so let the reviewer talk to them).

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