Black Friday | 25% off online accounting for 6 months!
Freelancers and contractors will generally have no legal right to reinstatement if their client terminates or chooses not to renew their contract.
However, you may be due a paid notice period from your client if they end the contract early, or a sum of money may be owed to you on early termination as compensation (often referred to in freelancing circles as a kill fee).
Our Crunch advisors are only able to answer accountancy related questions. If you have an employment question, please either leave a comment below or phone the Acas Helpline on 0300 123 110.
A contract is any agreement with two or more parties; this agreement can be written (on paper or email), oral, implied or a combination of these. If you’re working on the project or assignment, a written contract will usually still be binding even if you haven’t signed it (as you’ve ‘accepted’ the terms of the agreement by beginning work).
Some freelancers and employers don’t like a written contract of any description, but we would recommend it to ensure both parties are clear about what has been agreed and to minimise the risk of confusion or dispute later. If you don’t have a written contract, it can be more complicated to enforce the rights contained within the agreement.
The main elements of a valid contract for services (that the self-employed have) are:
The contract is the main legal document but it can be supported by other documents that are referred to in it. These include:
Assuming you’re a genuine freelancer/contractor (see our guide to determining your employment status here) and not a worker or employee, there are no legal minimum notice periods you or your client need to provide each other to terminate the contract early, or at its natural end.
If you have notice rights, these should be written down in any agreement between yourself and the client (including third parties, e.g. Recruitment Agencies).
The contract should clearly set out the ways in which termination will be handled and, ideally, should allow either party to terminate the agreement immediately or with notice, whether a breach of contract has occurred or not.
With regard to notice periods, if you have a written agreement, check to see if there are any written termination and notice clauses for either you or the client to give each other included in it.
If there are written termination clauses, what do they cover? Common clauses that allow a client to terminate the contract include misconduct on your part if you’re unable to fulfill the work, if you breach any terms of the contract, if they’re unhappy with your work, or if you fail to meet deadlines. There may be a ‘for any reason’ clause that allows both you and the client to end the agreement for any reason at any time (with or without notice).
Sometimes, there may be a provision for some level of financial compensation if the agreement is terminated early by the client. For example, where you’re not at fault but the contract has to end for other reasons (this could be a percentage of the total fee that would’ve been due over the total contract period).
Some industries have, as common clauses, “cancellation rights” that allow the contractor to be paid a sum if the agreement is cancelled at short notice by the client before it starts (but these must be agreed between both parties to the contract).
As a genuine freelancer, you’re unlikely to have Unfair Dismissal rights. The rights you do have as a freelancer/contractor include:
If your contract has been ended in a way the agreement doesn’t allow, your client may be in breach of contract and you may be able to sue for damages. This area of the law is complicated and you’d need to take advice from a professional to understand whether you can make a claim. There are also different categories of damages for those making or defending a claim for breach of contract.
You also could be in breach of contract if you don’t fulfil the terms of the contract.
If you’re an Employer and need ongoing professional help with any staff/freelance issues then talk to Lesley at The HR Kiosk – a Human Resources Consultancy for small businesses – our fees are low to reflect the pressures on small businesses and you can hire us for as much time as you need.
Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.