Working for big clients with no written contract or substitution right

How secure is my position as a bona-fide business professional when clients ask for me by name? Often no written contract anyway.

My problem is that I tend to work for very large clients who have their own way of working and are not at all interested in helping the small sub-contractor to take "reasonable steps". They would probably laugh at me and go somewhere else if I even asked them to sign a contract. So, for much of my work, I have not only no substitution right, but no written contract.

I went into business on my own account starting a limited company four years ago. As I have naval experience the company takes on contracts both on and off shore. The company pays for my safety training and certification that is mandatory for offshore workers. It holds public indemnity and professional liability insurance. There is an office in my home (although not presentable enough to bring clients into), separate business telephone and fax and of course email address, several computers (for running servers and networking evaluations etc), and specialist tools and expensive books.

I make it very clear to clients that engaging my company is for their benefit, and if it suits them to terminate early that it's perfectly OK. I have a page of "small print" business terms that I try to make available to all clients, explaining this and (among other things) about the business to business nature of all contracts.

The first three contracts were not offshore. The first saw me working initially at the client's site in Scotland (temporary accommodation locally was funded from fees), and then from April to June 2000 I worked for the same client in my home office. The client then had a cash flow shortage and terminated early with my full agreement.

It was not until this contract ended that I had the need for company stationery and business cards.

Next contract, three months commuting close to home and working on a number of the client's projects (Disaster recovery, etc). Because of errors in the wording and eccentricity of the management, the contract here never got signed. This client then terminated early and took on an employee.

Third was a company in the City of London. Working mostly at client's office, preparing for server installations. When ready, I would then visit the client's customer and carry out the installation. I used my company computer, and my company also paid for additional software to match that used by the client. Very much non-supervised, knowledge-based work – in fact the client's customers were banks' head offices throughout Europe and so I was working entirely independently. However I also represented the client to their customer (as a solicitor might – I always revealed that I was a sub-contractor) and I agreed to carry business cards in the name of the client as well as my own company cards. The description on the cards was "Installation consultant" – if I do it again I will insist on something like "External consultant".

After these contracts came the IT slump, and all my business in the last year (with the exception of a few sales, consultancy and technical repairs for local companies) has been offshore. This sort of work is obtained by going through agencies. It is often at very short notice (e.g., "Can you make it to Gatwick four hours from now?"), but even when notice *is* given the dates are frequently changed, and there can be consequent financial loss. There is no mutuality of obligation – I can and do refuse offers, and if the circumstances of the project change clients have no hesitation in dropping me off at the nearest port or by the first helicopter. Several times I have left the country having no idea when I'll be back. Naturally the client covers the cost of all travel, and a daily flat-rate fee is paid.

Although the agency I use is IR35-friendly, there are no written contracts, and there is naturally a very clear restriction of the workplace. Add to this the fact that in what amounts to a high-pressure, ship-borne building site, the management treats everyone as though they are employees. If you complain about being treated like that, then you aren't likely to get repeat business. Also everybody on a ship is subject to the legal authority of the Captain (as are passengers on a liner). Most clients have some sort of "job description" which you don't get to see until you arrive on site, and some ask for these to be signed. Of course, once again it is knowledge-based work and although I have no choice about where I do it, I am the only one who knows *how*.

There is email available on board some ships (I'm writing this at sea), and as a result I can sometimes keep in touch with a handful of clients, and have even earned some consultancy fees during my off times. I lug several hundred pounds worth of electronic tools and my portable computer (company property) out to every contract, and these are used to achieve real results for the client.

I have won a series of contracts for the same client over the past year. In fact I am currently on the same ship for the fourth consecutive project. Once you are known in the offshore industry you get asked for by name – this is of course very satisfactory repeat business, but no chance of substitution there!

This gives a rough (although sadly not short) summary of my business. I have not yet taken the steps of advertising locally or in Yellow pages, because I need to know that the investment will not be wasted if I happen to be out of the country for a long project. Other than that I believe I have taken all reasonable steps to run my business in a proper and open manner. My accountant is very optimistic about my IR35 position, but I am also considering FO35 at the moment, because if I were to come under pressure from IR I would find it hard to sustain my own defence.

--

Sealand

Attachments... IR35b.doc IR35 explanation Termsb.doc Terms of business