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Moving from employment to contracting? How to plan handing in your notice

If you’re ready to take the first step to independence and to making more money—that is, becoming a contractor—then you need first to tell your employer that you’re leaving.

This can be a delicate step, as often employee contracts can involve long periods for termination. Your contract could oblige you to put in a certain length of time before you can actually leave the company, and you have to respect it, although you may be able to negotiate a solution that’s better for you.

Legally, there is almost nothing you can do to challenge a long notice period. But you do have two options, and both of these depend on your relationship with your employer.

Do not breach the contract and just leave

You put yourself at risk if you breach your contract by leaving without sufficient notice. A long notice period is usually included in a contract where the employer stands to lose money, or even to fail to complete a project, should the employee leave without sufficient notice.

If you breach the contract by leaving before the notice period is up, you risk being liable for the employer’s losses. 'Employers need to assure their skills base on projects. If you drop out, they may have to hire a contractor to replace you. If that costs the employer money, you will have to compensate that company.

Worse still, if the project you were working on goes pear-shaped, you could have to compensate the employer for all of the losses that the failure of the project cost the employer. This could be very expensive.

Negotiate a shorter termination period

If you have a good relationship with your employer, it is a much better idea to negotiate an earlier departure date. The employer may be willing to do this for several reasons.

Some employers who are good managers don’t want personnel who are about to leave working on their projects. Management experts say that this employee is the most liable to be careless, or at least not to be motivated to provide the best work. And departing employees can be security risks. So your employer may be sorry to see you go, but may wish to see you go without delay.

It may also be possible to offer your employer a deal involving remuneration or benefits that will allow you to depart early. Knowing that you are about to depart, employers may be happy to save a little money on your perquisites, since they won’t be useful in motivating you to work anymore.

How to plan on leaving an unhappy employer

If you have a bad relationship with your employer, there may be other possibilities for leaving your job early.

An employer who doesn’t like you may, of course, be glad to see you leave. In this case make sure that all the formal details involving your termination have been respected, so that the firm can never come back to you with demands or liabilities in respect of your early departure.

Has your employer breached the contract? Perhaps you can leave early

But often your unfriendly employer wants to keep you, because replacing you is a nuisance, even though the employer has made it clear that you’re not liked. In this case, ask yourself if there is any way in which your employer has not respected the terms of your contract.

Have all of your holiday benefits been paid? Have the conditions in terms of the workplace been respected? Is there any area in which the employer has been remiss? If so, you could claim breach of contract, and terminate the contract immediately. You could even sue for constructive dismissal eventually if the breach is a serious one.

This happens more often than one might expect. It is probably wise to take professional advice if you choose to pursue the breach of contract route, for, as we’ve pointed out, leaving early without justification could cost you a great deal.

Timing your departure

Assuming you are not looking to leave immediately, then there are a few aspects to consider:

  • How long will you have to work for? What is your notice period?
  • Do you have any saved holidays that will need to either be paid, or taken?
  • How much money will you exit the employment with?
  • How long do you think it will take to secure your first contract?
  • How long can you last with no work until whilst you seek your first contract?
  • Do you have a back up plan?

Calculate your best and worse case scenarios. The most common fear soon-to-be-contractors have is "what if I don't find work quick enough?" - we'll, crunch the numbers and work out how long you have got? The advantage of having spare savings is that is gives you choices. You won't be desperate to take the first contract that comes along. And you'll also be able to negotiate more strongly if you can afford to say no.

Updated: 21 November 2016

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