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I've been working at a place as a consultant for just over 3 years... I signed a contract but was never sent a copy... A month ago they told me (verbally, nothing ever in writing) that there wasn't enough work for me anymore and gave me my "standard notice, whatever that is". Which turned out to be 4 weeks in their eyes.

After my notice period was over I thought to ask for a copy of the contract.

Besides all the usual stuff about them owning me and my first born it clearly states that the contract only lasts for a maximum of 3 months unless already agreed.

There has never been any written agreement about extending the contract... Nor any verbal agreement... We've both just carried on regardless...

This now leaves me with more questions than I have answers for.

Where does this leave me from a legal point of view? Do the terms of the contract still stand? There's no notice period in the contract at all, just terms for termination on breach of contract.

As this was a programming job and the contract is full of clauses about them owning all IP rights... but was never formally extended in any way, does that mean that I own the IP for those years?

As this is in the UK, by contracting at a place for such a long time... and apparently now without a contract... Did I then start to become an employee?

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    I would think, you continuing to work and them paying you is a form of "unless agreed otherwise". If that's the case, then the clauses of the contract are probably still in effect (with the exclusion of the start and end date)
    – SaggingRufus
    Nov 13, 2018 at 19:18
  • it says "Unless already agree'd, the maximum length is 3 months", implying that there would be some other time already agree'd before signing? and the contract would implicitly need extending. At least it seems that way to me.
    – user94516
    Nov 13, 2018 at 19:22
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    I think you are in the wrong section here. IMHO, law section is most relevant, because only viable answer to your question is, "talk to a local lawyer", anything else will be based on personal experience and opinions
    – Strader
    Nov 13, 2018 at 19:24
  • Lots of good solid advice in the answers so far (Particularly from Phillip Kendall and Mawg) but a consultation with an employment solicitor with expertise in IR35 issues would definitely be money well spent in terms of how best to protect yourself.
    – motosubatsu ♦
    Nov 14, 2018 at 11:11

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The general position in the UK is that if both sides act as though you're an employee, you're an employee. In this case, it's pretty clear both parties were acting as you were an employee, so you should get all relevant rights. At a high level, that means:

  • They can't just terminate you, they have to make you redundant with all that implies. They may have reasonable grounds for that though if there truly wasn't any work for you.
  • If they are making your redundant, they would have to give you a week's notice for every year you worked - so four weeks was actually slightly above the statutory minimum.
  • You almost certainly don't own any IP. You acted as though you were employed under an extension of the terms of the contract you agreed to; you don't get to pick and choose which bits apply to you now.

As an aside, both you and your employer may need to be very careful about your tax position here. As you were acting as employee, both you and your employer will be liable for National Insurance contributions, which you may not have been paying as a "contractor".

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    That's a big thing in the US also. Misclassified employees cost the employers a lot of money in back taxes and penalties, but the "employees" also get a look and can end up having years of deductions that are now disallowed, which means a ton of back taxes on their end too. The I were the OP, I'd not say anything and just move on to whatever is next.
    – Terry Carmen
    Nov 14, 2018 at 3:14
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    @TerryCarmen Yep definitely a similar thing here.. from a tax perspective both the OP and the company could be in for a serious amount of hurt if HMRC got wind of it. Taking the four weeks notice and the lessons learned about being a bit more diligent about the contractual nuances in the future and hoping nothing more comes of it is the best course of action here!
    – motosubatsu ♦
    Nov 14, 2018 at 11:07
  • The thing to consider here is that they did not begin with both sides considering him an a employee. When I studied UKL law of contract it was similar to Newton's First Law, paraphrased as "things stay the same unless you change them". Unless the company started paying his social security, offered him a pension and paid holiday & sick pay, he remains a contractor. Of course, IR35 might intervene, which is why he needs to see a lawyer, rather than ask us. See my answer for the complications if he retroactively becomes an employee.
    – Mawg says reinstate Monica
    Nov 15, 2018 at 8:01
  • @Mawg not sure about the UK, but in the Netherlands you automatically by law become an employee after 2 years or 3 contract renewals (whichever comes first). A major reason why so many people end up getting 3 6-month contracts and then are let go, as for employees that's a lot harder than simply letting the contract run out.
    – jwenting
    Nov 15, 2018 at 10:45
  • What would really help us here is if the OP told us whether he gets employees "perks", like pensions, paid holidays, social security, etc. Again, I warn him, that he might not like becoming an employee, as he will have a lot of interaction with various government agencies to retrofit things; it will be time consuming & costly - and what will he gain by it? @user94516 any comment? I guess we will never know, as the user account seems to have been deleted.
    – Mawg says reinstate Monica
    Nov 15, 2018 at 10:48
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Just adding my two new pence worth to the other answers (that’s fivepence in real money), with a slightly different point of view.

When I studied UK law (admittedly, a few decades ago) the general concept of any contract is that if a contract of any kind expires and both parties to the contract continue to act as if it were in force, then the courts will rule it to be in force. So, you would continue to be a contract employee.

It has certainly happened to me in the past that my UK s/w development contract expired and I continued in a contract role for a few weeks or months until a new contract was signed. Are you implying that the length of time makes a difference? From a legal viewpoint, that only reinforces the notion that the contract remains in force and unchanged (and, for that reason, you don’t own any IP from after the initial 3 months).

I can see where you might now trying to get a few extra squids by claiming to be an employee, but that would not wash in court – especially if you continued to work through your Ltd, pay your own employer’s social security, be paid only for time worked, not holidays or sick time.

IMO, an open & shut case – you are chancing your arm (no offence meant, no harm in trying ;-). BUT, that is a generic approach to all contracts (which involve supply of good and services), and I learned it long before IR35 was dreamed of.

After 2 years contracting at the same site, IR35 complicates things. However, 2 years does not automatically make one an employee. I have worked with plenty of contractors in the UK recently who had been with the company for 5, 10 or more years and are still contractors.

The only real answer will be a lawyer (hint: their hourly rate exceeds ours), and if you are deemed an employee, you going to have to pay some fancy accountant’s fees (and have some awkward explaining to do) to adjust & back date with the DHSS and HMRC for VAT.

Is the game worth the candle? What would be your potential upside and what your potential downside?

Personally, I find contract work easy to pick up, and the market is buoyant right now. I would gladly take 4 weeks’ pay (where one week is the UK contract norm, for embedded at least) and walk away. YKMMV (Your Kilometrage May Vary)

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does that mean that I own the IP for those years?

That's a highly unlikely outcome, assuming you have continued to be paid for your work.

There's really no general answer to the rest of your questions. It will very much be specific to your individual scenario (are you operating through a ltd company, are you on PAYE, do you have other clients, is your work directed by the company paying you or are you left to your manage yourself, do you require approval to take holidays, do you have to hand in sick notes if you're absent due to illness, do you get employee style benefits, did both parties continue to act as if the original contract was in place, and many more questions).

It's also not clear what outcome you would like, which greatly affects the approach you would take.

If your tax situation is otherwise clear and you're happy to leave, take the 4 weeks notice and find a new job (the UK market is generally good for contractors competent at programming right now, assuming you've not ended up pigeon holed in one particular technology area), and if you've not had any pay/rate rises in the last 3 years you can likely get better elsewhere.

If you want to achieve an outcome other than what they're offering or your tax situation is unclear you need professional guidance.

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Disclaimer: I'm not a lawyer and certainly not a lawyer in the UK.

However it looks like you're actually an employee and may be entitled to be treated as one (whatever that means where you are)

https://www.gov.uk/employment-status/selfemployed-contractor

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    The OP has given nowhere near enough information to make the determination that he's an employee. He might well be, but if he was originally not an employee and both parties have continued to work as if the original contract was still in force then he equally may not be.
    – JosephH
    Nov 14, 2018 at 11:41
  • What do you base this answer upon?
    – Mawg says reinstate Monica
    Nov 15, 2018 at 8:02
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    @Mawg See the link.
    – Terry Carmen
    Nov 15, 2018 at 13:49
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Alarms should have been ringing when you didn't received a copy of your signed contract.

You need to look into your ir35 status. Have you spoken to your accountant or an ir35 specialist about it? I would with immediate effect in light of the particular circumstances. The last thing you need is the HMRC knocking on your door demanding money because you may have classified as a hidden employee.

In regards to the T&C of the contract there may have been an unspoken renewal in that you raised and invoice which was paid by the agent, who charged the client over the last 3 years. However, none of this can be certain without getting legal advice first and foremost.

However, I'm a contractor not a lawyer. I would speak to a professional or find one via the Professional Contractors Group

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