Dave Chaplin, CEO, ContractorCalculator:
Is it true to say that contractors don’t have rights? Well, they do have some, but not the sort that employees take for granted as part of employment legislation.
Our Contractor Doctor has recently had a spate of questions about contractor rights. Can a client replace a contractor with cheap labour from India? Yes. Does the contractor have a leg to stand on? No. Can a client prematurely terminate a contractor before the contract end date? Yes. Can the contractor do anything about it? Well, as long as the notice period is adhered to, then no.
The whole point about contracting is that contractors are, well, contractors, and not employees. Contractors are in a business-to-business relationship with their clients or agencies, and therefore have recourse only to contract law, not employment law, if something goes wrong.
But as for rights... forget it. Facing the risks of running your own contracting business, as opposed to the relative security of employment, is one of the major reasons contractors are able to earn so much more than employees. You can’t have your cake and eat it.
As a result, having a basic working knowledge of contract law is an essential business skill for every contractor to have. The basics are very easy to grasp, and understanding them will help you spot the stage at which you need to seek professional advice. If you want to brush up on your contract law, then chapter 7 of the new Contractors’ Handbook is well worth a read.
We see so many contractors suffering as a result of their lack of knowledge of contract law, many of whom have been taken for a very expensive ride by a client or agency. Most of these cases could have been forestalled if the contractor had been a bit more savvy and known when to call in the lawyers.
In fact, some of them could have saved themselves a whole lot of pain, simply by reading their contract before signing it. When things go wrong, our Contractor Doctor is regularly asked, ‘Does this clause in my contract apply to me?’. You signed it, so yes, every clause counts.
The contracting lifestyle has so much to recommend it. Even during difficult economic times, like those we’re now facing, there is potential for significantly increased incomes, the ability to choose to work on the most interesting projects, and the flexibility to take time off between contracts.
But this lifestyle comes at a price, which is understanding your new place in the world as a contractor, not an employee. So forget about ‘rights’, and make sure you understand how contract law affects you.