IT Contractor Employment Law

WGT

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Hi,
I'm an IT Contractor and have been contracting for the same client for the last 4.5 years. Redundancy is a possibility in the near future (although not a certainty). A colleague of mine told me that if you contract for the same client for more than 2 years, then you're entitled to 2 weeks salary for each year, which in my case would be 8 weeks (so pretty much 2 months).
Is this correct, or do you know a good web-site where I can verify this?
Thanks a mill
 
[broken link removed] might help.

I think it comes down to whether you were self-employed and contracting your services to the company, or whether you were on a fixed term contract with them.

If the company issued you with a payslip stating that you're PRSI class A, then you would be entitled to redundancy.

If you send the company invoices, they pay you, and then you pay your own taxes and PRSI (Class S?) then I don't think you would be.
 
If you are an IT contractor working through your own limited company then of course you are not entitled to redundancy,you might only be entitled to a weeks notice,check your contract
 
If you are contracted as self employed purely as a mechanism for the employer to avoid giving you full employee benefits ( eg tax - avoiding paying prsi) then you may be deemed to be an employee by revenue.
They issued a code of practice last March - you'll find it under leaflets in Income tax on revenue.ie

If this applies to you, you may be deemed to be an employee and would have all the entitlements of employees - so if your employer refuses to pay you redundancy - then you could make a claim to the EAT.

It really all depends on the terms under which you work.
 
Hi,
Seems to be mixed views on this. Does anyone have a definitive answers. I am IT contract with same client for last 4.5 years.
Some are saying, of course there wouldn't be a redundany paid in the case of a lay off, other's are saying if the client used this as a means of not paying you VHI/Pension etc, then I should be paid redundancy.
Can anyone clarify this?

Thanks
 
Hi WGT

You have to be clearer yourself. You have not said whether you are a PAYE employee or a self-employed contractor or limited company.

If you are paid under the PAYE system and you have been with the same employer for over 2 years, you are entitled to statutory redundancy. It does not matter if that employer is a recruitment agency or not.

If you have been providing services through a limited company or as a self-employed contractor, you are not entitled to redundancy as you were not an employee.

Brendan
 
You won't get a definitive answer with the level of detail you have given.

Do you contract through a company or in your individual name? If the latter and you are effectively under the "control" of the company, then you could be deemed to be an employee and not a contractor. The fact that you have described yourself as a contractor is not dispositive of the issue but does imply at least that neither of you intended that you should be considered to be an employee and you are changing your mind on how that position should be now that redundancy is on the cards. That said, depending on the "control" test, you could legally be considered to be an employee, notwithstanding your contract for services and notwithstanding the fact that both parties intended that you be treated as a contractor from the outset.

There is info on the contractor/employee issue here (from Revenue). As you can see, no one here can make a determination as to whether you are actually an employee or contractor - length of service alone is not sufficient to make such a determination.

If you are a de facto employee, you and the company should have withheld PAYE and paid employee PRSI etc. In addition, the employer should have made other employee benefits available to you (such as pension and share options). Those things are ultimately the responsibility of the employer. I presume you paid all you own relevant taxes (such that the company would not now have to repay any PAYE that should have been deducted). Seeking a re-determination of your employment status if you knowingly agreed to be a contractor will cause problems for your employer and you may have to sue to enforce such a determination.

You should go to an employment solicitor to get full advice on the issue.

Sprite
 
... Seems to be mixed views on this...
Rather than asking the same question again, can you provide some of the clarification requested by people trying to help you? e.g.
... If the company issued you with a payslip stating that you're PRSI class A, then you would be entitled to redundancy...
whereas,
... If you send the company invoices, they pay you, and then you pay your own taxes and PRSI (Class S?) then I don't think you would be.
or
If you are contracted as self employed purely as a mechanism for the employer to avoid giving you full employee benefits ( eg tax - avoiding paying prsi) then you may be deemed to be an employee by revenue.
...
 
Fair enough guys, I was sketchy with my details, I am an IT Contractor that contracts through my own limited company, I issue my client with an invoice each month, and then I write a company cheque to pay myself a salary.
All this sounds as if I wouldn't be due any redundancy, except that a colleague who also contracts in the same fashion as me (I know because there are about 20 of us) has been made redundant and he told me (I've no reason to doubt him) that he received 2 weeks salary (capped at 600 euro per week) for each year he worked with them.
Perhaps this is just goodwill from the client. From your answers above, it doesn't seem like they had to.
 
You should contact the National Employment Rights Authority to clarify your employment status.

I think the position you're refering to is a change to the law that occurred in recent years regarding the status of contracted workers. The law was introduced to guard against employers using contracted workers as a means of avoiding their legal responsibilities.

AFAIK, there is maximum duration for which you can be a full-time contractor before you must be either offered a job or let go. It's one or the other.

You wouldn't be entitled to redundancy payments (or any other protections offered by empoyment law) unless you're working in a contracted position that should properly have been regarded as a full-time job i.e, if your employer was continuing to treat you like a contractor instead of putting you on the payroll as he was required to by law.
 
You worked through your own limited company?

You pay a much reduced PRSI rate.

The Redundancy Payment comes from the Social Insurance fund, so you should not get anything.

Brendan
 
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