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Contractor Doctor: Can another contractor fire me?

Dear Contractor Doctor

I’ve been working on an ongoing project for the last 18 months. Until recently, the client has been happy with my performance, having twice renewed my contract.

However, my project manager, another contractor, is now threatening that ‘my job is on the line’. This started when I identified flaws in the project that required fixing, but over which he took no action. He's accused me of making him look and I’m worried that he might try to force me out.

Can another contractor fire me?

Thanks

Jen

Contractor Doctor says:

It is employees that get ‘fired’. Contractors are not employees (although, some, of course, are employees of their own limited companies). So, they don’t get fired, they have their contracts for services terminated, and if unfairly terminated they can take legal action over breach of contract.

In this case, the contract will be directly with the client’s organisation, or indirectly via an agency, not with the contractor project manager’s company. So the contract is not the contractor project manager’s to terminate.

However, contractors in a situation where they may be facing unfair termination should prepare for the worst and assemble their ‘escape pod’ full of evidence that they have delivered according to the terms of their contract. It might also be prudent to be exploring the market for future contracts, in case termination does happen.

Employees are fired: contractors are terminated

The relationship between an employee and their employer and a contractor and their client are fundamentally different. The former is a ‘master-servant’ relationship with a contract of service governed by employment law. The latter is a business-to-business relationship governed by contract law.

Under contract law, the client would have to either exercise the termination clause, if there is one, or demonstrate that in some way the contractor has failed to deliver their services according to the specifications in the contract.

The evidence for terminating a contract on non-performance grounds must be genuine and compelling. Otherwise, the contractor could take legal action against the client for breach of contract.

Contracts are with the client, not another contractor’s business

A contractor’s contract is usually directly with the client or with the agency, unless it is via another contractor who is ‘body-shopping’ in subcontractors to the client. Therefore it is unlikely that a contractor project manager has the power to terminate another contractor.

They would first have to consult a client manager who has termination authority, and they could influence and inform that manager’s decision as to whether or not to terminate the contract.

Of course, the contractor project manager could recommend, with reasons, that another contractor be terminated, but termination on the grounds that ‘they made me look stupid’ is unlikely to wash with most clients, or with the courts if it got that far.

If a contractor is flagging serious issues with a project to a manager, and that manager is choosing not to listen, then it might be appropriate to move up the chain of command and talk to someone more senior, with all the objective evidence to hand.

In this scenario, it is possible that it will be the contractor project manager threatened with termination, or even terminated, for breach of contract, and not the contractor originally under threat.

Prepare an escape pod in case of unfair termination

Contractors accused of a serious breach of contract are usually marched off-site by security with no notice. Therefore, if a contractor is concerned they are being set up to take a fall for a project manager, they should prepare their escape pod.

That means gathering emails, meeting notes, project reports and other evidence that proves the contractor being threatened has delivered according to their contract’s specifications. That way, any ‘set up’ attempt is likely to fail.

Termination on the grounds that 'they made me look stupid' is unlikely to wash with most clients

And when it has not been possible to deliver according to the contract’s requirements, perhaps because of their contractor project manager’s inaction, it is vital that emails flagging project issues are retained, if only to forward to the client to quickly defuse any dispute.

Communication may be the answer

It is possible that the manner in which a contractor is flagging project shortfalls to a project manager is not being understood, or being perceived to be undiplomatic or even aggressive. Taking a step back and making the same points objectively might cross that gap of understanding.

It may also be appropriate to involve the contract project manager’s manager at this stage, so that the client can assess where the faults, if there are any, lie.

Published: Monday, November 12, 2012

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