Change in UK employment to French contractor: What to look out for? [closed]

Question

I am a British citizen and live in the UK. I am employed by the UK branch of a French company. Apparently, in October, a change to UK legislation may make the UK branch -- which has very few employees -- unviable and so the French parent may choose to dissolve the UK entity and make its former employees contractors.

We have been told, for what it's worth, that -- besides the admin work being passed on to us -- such a change, should it happen, will otherwise be transparent. For example, salary will increase to compensate for the taxation change (and potentially to subsidise the extra admin/hiring an accountant); holiday entitlement will remain the same; contract-termination clauses (e.g., in the event of redundancy) will not change.

I'm only superficially conversant in UK employment law, let alone French employment law! I have an idea of what's required of me, should I become a contractor -- the whole "sole trader vs. limited company" thing -- but I don't know what I should be looking out for. For example:

• Presumably the new contractor contract must be in place before the dissolution, to avoid any discontinuity. Given none of this is set by me -- besides agreeing and signing -- how do I ensure this?
• What obligations does a UK company have to its employees if it chooses to dissolve itself? It's not a bankruptcy situation, so I'd be surprised if it can just "shut up shop" without consequence.
• While this is up to the parent company, is there any option in French employment law to make this more seamless? (My guess is that, because of Brexit: no.) A French colleague mentioned their concept of "portage salarial", for example.
• If I'm handed a contractors contract, what should I specifically look out for? I mentioned a few things above, but I'm wary of "gotchas" that I need to be aware of.
• Anything else!...

Answer 1

the French parent may choose to dissolve the UK entity and make its former employees contractors.

As a general answer. When an overseas company branch is dissolved, it's usually going to be a wholesale change or winding down. Changing the employees to contractors just keeps things viable while a proper solution is found, which often means they're let go as soon and smoothly as can be managed.

The main thing I would be looking for in your situation is legal protection in your locale and duration of contract. If either of those isn't iron clad I'd be job searching. Probably I'd job search anyway.

Don't put too much faith in your local laws either. Overseas lawyers are well aware that overseas laws are hard & expensive to enforce, especially if they don't have a local branch.

Answer 2

A key thing to note is that despite the parent being a French company, as long as you work in the UK, the company must abide by UK employment laws. You have no need to concern yourself with French employment laws they simply don't apply.

I actually worked for a French company (Thales) in the US and other than the difficulty in correctly pronouncing the company name it was as if I was employed by any old US employer. The bigger cultural difference in my branch was we were not doing anything secure and Thales is a security company working in both banking and military contracting. This lead to some difficulties with our networks.

As for becoming a contractor: you probably need to seek advice. Do you know anyone who is a contractor in the UK? Do you have a good tax person whom you can ask for advice? Here in the US, when given a choice between being an independent contractor (1099) and a W-2 contractor people of higher income almost always choose the 1099 version as the tax advantages are so great. Is the same thing available in the UK? I don't know, but you need to find someone who does.

For the record 1099 and W-2 are US tax forms and as a 1099 you can basically make 100K per year but pay taxes like you make 35K per year. The tax advantages aren't quite as good currently as they were with the previous administration but they are still pretty great.