Dear Contractor Doctor,
I am an IT contractor and I have been working mostly at home for a client through an umbrella company and agent.
My contract came up for renewal in December, and I have confirmation by the client that the contract was due to end on 1 April.
But when I submitted my timesheet for the period until 1 April, I was informed that my contract ended on 20 March, and that’s what my umbrella company and agent have on file. And my client won’t pay me.
Does my client have to pay me until 1 April? Who is ‘in the right’ about the contract end date – me or my client?
Contractor Doctor says:
Being in business for themselves, and not employed, even when they are working for an umbrella company, it is essential that contractors take responsibility for their contracts with agencies and end-user clients.
“The overall position depends on whether some actions on the part of the client are inconsistent with the contract ending on 20th March and consistent with the contract ending on 1 April,” explains Roger Sinclair of contractor specialist law firm Egos.
Contract takes precedence
According to Sinclair: “This is because the contract signed in January between the contractor’s umbrella company and the agency supersedes whatever may have taken place in earlier discussions.”
Even if the contractor has earlier correspondence from the client that states that the contract was due to run until 1 April, because the contractor’s umbrella company accepted the contract that was agreed after that date confirming the 20 March end-date, the earlier correspondence is not relevant.
Client actions to the contrary
“However, had the client acted in such a way as to suggest that the contractor should have continued to work after 20 March,” continues Sinclair, “then the contractor may have some options to take further action to recover some fees in the disputed period.
“Did the client do anything from which the contractor can reasonably conclude that the contract was extended? By the contractor’s own admission, there was no contact with the client, so there is no evidence to suggest the client extended the contract.”
And if there is no evidence to suggest that the client extended the contract, then Sinclair suggests that it is hard to see how the client could be responsible for something they did not ask for.
Umbrella company at fault?
If there is an issue, it is likely to be between the contractor and the umbrella company. That’s because it was the umbrella company representative that would have signed the final contract with the agency that confirmed the contract termination date as 20 March.
But, as Sinclair points out: “Contractors should not assume what is in their contract; they should know, because as responsible businesspersons it is their livelihood covered by the contract with the agency or client, not the umbrella company’s.
Contractors should not assume what is in their contract; they should know, because as responsible businesspersons it is their livelihood covered by the contract
Roger Sinclair, Egos
“In this case, as in every case, it was the contractor’s responsibility to negotiate and confirm what was in their contract, not the umbrella company’s,” concludes Sinclair, “and to ensure that the client’s communication in December giving the 1 April end-date was agreed in writing in the contract.”
Good luck with your contracting!