Contractor Rendundancy Rights?

Pete111

withabix wrote: »

...and you do this to fiddle your taxes.

Why do you expect any 'rights'?

Yet another poster who mistakes tax avoidance for tax evasion...

OP no ee rights for you I'm afraid - swings and roundabouts.

System

As a matter of interest can you make a permanent member of staff redundant while at the same time keep employing an IT contractor to do the same job?

Jarndyce

goater78 wrote: »

As a matter of interest can you make a permanent member of staff redundant while at the same time keep employing an IT contractor to do the same job?

yes. You don't employ a contractor you contract them. If there is s genuine diminishing need for staff, contractors may give you more flexibility, for example to hire only as and when required.

However if a contractor was hired full time and loing term to do exactly the same job, that may well help the redundant employee's case that they weren't genuinely redundant.

System

Cheers for that. Basically there is a rumour round the office that they may make some redundancies. The office is split with lots of people doing the same job but half are permanent and half are contractors. I was curious whether they had to get rid of the contractors first before laying off permanent staff! In practice I think they will do that but just wondered about the legalities of it all.

Spartacus_Mills

Jarndyce wrote: »

None at the moment.

In that situation they are an employee of the agency. There is legislation coming in in October which will give Agency workers more rights after they have worked for the same employer for 12 weeks, but even they won't help you as a self-employed contractor.

It probably will not affect people working for their own limited company.

http://www.contracteye.co.uk/awd-limited-company-contractors.shtml

ac427

goater78 wrote: »

Cheers for that. Basically there is a rumour round the office that they may make some redundancies. The office is split with lots of people doing the same job but half are permanent and half are contractors. I was curious whether they had to get rid of the contractors first before laying off permanent staff! In practice I think they will do that but just wondered about the legalities of it all.

The company would change the job description to get around this whether you are replaced by a contractor or a permanent employee.

There are ways round it all. Just like when a role is filled internally. The role has to be 'advertised' even though the person already 'has the job'.

Now get your own thread :rotfl:

bert&ernie

I presume that the OP pays himself a modest salary (i.e. under the higher rate tax band) and tops his income up with dividends or directors loans from the company.

No problem with this - perfectly legal bit of tax avoidance. However, in order for it to be legal you have to have a contract with the client that is compliant with the IR35 rules i.e. you are explicitly not an employee of the client.

It would seem to me that the OP wants to have it both ways - to have the rights of an employee without the obligations (e.g taxes).

Jarndyce

Spartacus_Mills wrote: »

It probably will not affect people working for their own limited company.

http://www.contracteye.co.uk/awd-limited-company-contractors.shtml

It definitely won't. I was answering the OP's hypothetical question about temps, not contractors.

ac427

bert&ernie wrote: »

I presume that the OP pays himself a modest salary (i.e. under the higher rate tax band) and tops his income up with dividends or directors loans from the company.

No problem with this - perfectly legal bit of tax avoidance. However, in order for it to be legal you have to have a contract with the client that is compliant with the IR35 rules i.e. you are explicitly not an employee of the client.

It would seem to me that the OP wants to have it both ways - to have the rights of an employee without the obligations (e.g taxes).

I certainly do not wish to have it both ways. All i wanted to do is find out what this "2 Years temping and we get rid of you before you become eligable for redundancy" is that i keep hearing about.

Now do any of you know the answer?

bert&ernie

ac427 wrote: »

I certainly do not wish to have it both ways. All i wanted to do is find out what this "2 Years temping and we get rid of you before you become eligable for redundancy" is that i keep hearing about.

Now do any of you know the answer?

I dont think it is that straight forward. This '2 year rule' seems to be quite common. Probably because companies don't want to risk anyone claiming employment rights. It probably also protects contractors from falling foul of IR35.

There certainly isn't any hard and fast rule that you will automatically be treated any differently in terms of employments rights or taxation after 2 years.

Don't you retain an accountant or lawyer who could advise you? After all, you are the director of a professional services company.

Moneysaving it may be, but I wouldn't expect to get reliable business legal advice, and that is what you are asking for, on a consumer forum like this.

Also, why don't you try ContractorUK.com forums? I would think this is an FAQ over there.