Breaking Contract Early


I’m currently contracting for one of the 4 large banks in Australia. I’m about 8 months into a 1 year contract.

My question is the following: is it a big no-no to break contract early? What’s generally the view in the industry about respecting contract durations especially since I’ve worked a good portion of it already.

I work in Melbourne which doesn’t have much going on in the finance sector compared to places like Sydney. The bank I work for is one of 2 that has some workforce down here. I’m a little concerned about burning bridges seeing as job options are limited down here.

I’m not thrilled about the work I’m doing at the minute and have been keeping an eye on the job market. Just wondering if I should sit tight until my contract ends or bail when something decent comes up.

I don’t know how tight-knit the industry is there, but in general I would say it’s a bad idea to break the contract. Word will almost certainly get around and future employers will at least have it in the back of their heads. You’re also only talking about 4 months, it’s not like your stuck for 2 more years. That being said, if something spectacular came up at a place where you would expect to stay for several years, you have to get when the gettin’s good.

It doesn’t sound as if you have something amazing to go to. In that case I would just stick it out. This industry is surprisingly small and I’d worry about the reputational harm, especially if you’re in a small market.

What are the penalties of breaking contract? If they say “if you leave, you forfeit your XXX bonus”, then that might be perceived as more of a “fair” deal for the company. If the only real penalty is reputational damage, then maybe you should worry about reputational damage.

If you have a job you’d rather be at, take it. Otherwise, just sit tight, four months will fly by.

I break contracts all the time. I have worked for 5 investment banks in NYC in my duration of 7 years here in the US. I even get full time offers when I tell my hiring manager about my plans to leave, but there are some visa issues which don’t allow me to avail those opportunities and as we talk, I am desparately waiting to leave from my current company where my consulting contract is till Dec 2013.

Probably since the financial industry in NYC is diverse (“It’s a small world”, not for NY), I never had to bear any consequences of breaking contracts early and face any sticky situations during interviews. I get the new contract elsewhere, give 2 weeks notice to the curent firm, happy hour with team on Thu, last day on Friday and join the new firm on Monday. That way I never had a day’s break in my hourly billing.

Not sure if the consulting industry works the same in Australia or elsewhere, so ask around.

ohai - Contractors don’t get any bonus, we just have the billing rate pre-determined by the client before the contract is signed.

I’d recommend that you finish out your contract if it stipulates a work term and doesn’t say anything about employment at will. You’re better off using the next four months to job search in your spare time so you can have something lined up once your current contract expires. However, if there is a clause that your arrangement can be terminated anytime by either you or the employer, then you can really do whatever you want. It doesn’t sound like you have that clause, though.

Anyway, it really all depends what fits with your moral and ethical compass, but that’s what I would do if I were in your shoes.

P { margin-bottom: 0.08in; }

I don’t know what the laws are in Australia but in California in the US contract work is huge and a way for companies not to pay benefits. Most companies in California for contract do not provide health insurance or any benefits which is why they do it. Plus it is super easy for them to dump you. So my answer to you is you need to do whatever is in your best interest. If you give them two weeks notice that has to be sufficient as there has to be a termination notice in your contract.

You’re not a slave brah. A “contract” does not mean you are obligated to fulfill it if there are appropriate termination clauses and you fulfill them.

I don’t see the issue here. If I’m reading correctly, you are four months away finishing a contract with no guarantee it will be extended. Therefore you should be actively looking for another job now.

Even if you happen to get an offer in the next couple of months, it usually takes a few weeks before you start in the new job. It is not unusual for it to take a month or even longer to start at a new job after signing contracts.

So as I see it, in a best case scenario where you get another offer quickly you will still be very close to the end of your current contract before being in a position to start in a new position. At that point I’d go to your current manager and see if they want to make you a better offer - if you are happy to stay on there.

To be honest, I would be more concerned about the prospect that you are out of a job in four months and could be without a salary for a while. Unless the Melbourne financial job market is in much better health than it is in most places right now.

Reread this quote. If you don’t look after yourself first, no one will.