Watch out for unfair termination clauses
Friday, 13 May 2005
A lot of agencies hide unfair termination clauses in their contracts, make sure yours isn't one of them. The general gist of these clauses is that the client or the agency can sack you any time, but you have to work out the term of the contract. This is clearly unfair, and something you should fight.
The option to terminate a contract on a month's notice, or less, is important to any contractor. In today's market, you may think it's unlikely you will want to terminate early. This can be a mistake as you can never tell what the future will hold. Maybe your new boss will be a complete tyrant, maybe the client will make unreasonable demands of you, maybe you will have a family tragedy that requires your leaving work. The point is that you just don't know, and should have the option to leave if you want to.
Surprisingly, many contractors don't even notice that their agency hasn't given them that option. They see "30 days notice" on the schedule, and just assume that it applies to all parties involved. Read deeper into the contract, and you may find that your agent is trying to take this assumed right away from you by burying a clause in the legalese.
Examples of these clauses are:
"The client or agency may terminate the contract at any time with 30 days written notice. The contractor may not terminate the contract early."
"The contractor must obtain written permission from the agency and the client if they wish to terminate the contract early."
You should insist that any such clauses be removed from your contract. Before you sign the contract, make sure you put a line through any such clause and initial next to it.
Often, they will spell out that they can terminate, but will not explicitly give you the option. This leaves you standing on murky ground if you want to leave early. Make them put in a clause giving you the same right to terminate as they have. If necessary, write the clause in yourself and initial next to it.
Sometimes, an agent will tell you that a client has insisted the clause be put in. This is very unlikely. HR departments know they can get into hot water if they are caught treating staff unfairly. If an agent claims this, say you want to call the client and double check. You should be able to get through to HR by calling reception (listed in the phone book) and explaining the situation. Often the agency will back off before you need to do this.
Read your contract carefully before signing and make a conscious effort to check your termination rights. This is an area where many agencies will try to get the better of you.
Paul Knapp (editor@brainbox.com.au)
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Send in an emailMost contractors don't realise that recruiters actually MARKET the fact that the contractor can be sacked at any time with no questions asked. Many recruiters even offer to provide an alternative contractor free of normal recruiting fees if the employer decides to sack the first one. This issue is called asymmetrical termination. It means, as Paul points out, the employer gets the benefit of four weeks notice if the contractor decides to leave, but the contractor gets no warning if the employer decides to terminate the contractor. The ability to sack without notice also encourages employers and recruiters to lock up contractors for periods longer than a contract is expected to run, so they will be available if required. Contractors will be told the project is for six months, when it's really for three months. This can mean the contractor declines other projects, even though the employer has no serious intention of providing work for the stated six months. The existence of these arrangements also highlights that IT contractors working through recruiters are not really contractors at all, but casual workers. Casuals can be dismissed at will. Genuine contractors have fair arrangements that protect their own interests. Although it is sometimes possible for savvy people to negotiate changes to contracts, recruiters are much better at getting their way than are contractors, and they have a range of dodgy behaviours to ensure this occurs. The best solution to this situation is legislation that requires either fair notice in contracts, or symmetrical termination. That is, the same notice period for both parties. As in all these issues, an ethical recruiting industry would have no problems with this. But instead you will see ITCRA fighting tooth and nail against proposals like this. If you would like legislation that encourages genuine contracting, including fair contracts, you might like to send an email to the Contracting Inquiry . They are still looking at submissions and welcome input from actual contractors. Tony Healy, 05/12/2005 07:23:09 PM Works both WaysThe immediate termination on the client side, and the 30 days notice is a typical ploy, however centainly in contract law in the UK, it works both ways, the contract must be equal and fair, otherwise it is referred to as a penalty and does not form part of the "boiler plate" and must be agreed to separately, either as part of the attached schedule or a witnessed amendment. I once had a client who insisted 1 day on their side and 4 weeks on mine, I found another contract part way through, and with very simple advice from a Barrister friend of mine gave them 1 week, there was nothing they could do. Pete, 05/18/2005 12:13:39 AM Don't Accept ItI've had pretty much every variation of contract in my working life. The worst was a 6-month contract which allowed me no way to terminate, but the client could give 1 day's notice. Ouch! Fortunately, most contracts are fair and give (usually) 4 weeks on either side. Your ability to terminate early is your safety net if you find yourself in an intolerable position. It protects you against intimidation and improves your bargaining position. And it's just fair to have the same rights. My advice: refuse to sign a contract without an acceptable termination clause. I've never encountered an agency which would not agree to change the contract in this way (eventually). Look at it this way: you've been accepted for a job... the search is finally over for the client, and the agent's commission is virtually in the bag. They will not jeopardise it just to maintain an unfair clause. Sure, they'll kick up a stink, but it's surprising how quickly they can move when they're motivated :). Many agents try to slip you a contract to sign without much chance to read it. Always demand a copy of the contract in advance of the start date, so you can check the details and potentially get legal advice. The agent should be happy for you to do this, and if they resist I'd be even more determined, since it just raises my suspicions about why. Brett Alcorn, 11/22/2005 08:02:55 PM
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