As a general rule immediate contract termination is not a recommended course of action and should not be done lightly or in frustration or anger. As well as the damaging emotional effects on the child of suddenly feeling they are not welcome in the setting (without explanation and usually with negative parental comments), it can also lead to parents suing providers for loss of earnings and your insurance company will not normally support you because you put yourself in that situation without their permission.
There are some instances when it is not safe to have a child in the provision and they need to be collected and taken home straight away – this is an exclusion rather than a termination and should be recorded as an incident to share with Ofsted during your next inspection (this is a requirement of the Early Years Inspection handbook). An exclusion should be followed up by an urgent meeting with parents to discuss the issues and to make a decision about either the child returning to the setting with support or whether it is best for them to move on.
Money problems seem to be the main reasons when providers ask ‘can I terminate the contract immediately?’ Best advice is ‘don’t do it’ - you can have a rule in your terms and conditions that states ‘if you do not pay me by the due date I will ask you to take your child and go to the cashpoint and bring my money to me’ … that’s fine, that’s not terminating a contract: it is simply reminding parents that they have to pay you on time.
However, terminating a contract is another thing entirely. If you cannot resolve the issues with parents and feel you have no alternative but to give notice, best advice to protect yourself from malicious allegations which could damage your business and lead to you being sued without insurance support (causing legal issues for you) is to write a notice letter that follows the notice period stated in your contract / terms and conditions.
In many instances, a quicker notice period can be negotiated with parents, but if this does not happen make sure you are paid in advance through the notice period by following your terms and conditions as above and asking parents to bring cash with their child if their normal bank payment or voucher does not arrive.
For further financial protection, a deposit paid by parents at the start of the contract will protect you from loss of earnings at the end of the contract – it should be adjusted through the years if children’s days change and can be withheld if parents leave owing you money.
It is very unlikely that the debt recovery services provided by your insurance company will protect you if a family leaves without paying you because you have immediately terminated their contract. It is much better to have procedures in place to ensure this does not happen in the first place.
You will find more free information about debt management from Childcare.co.uk here.
If you have any childminding related questions that you would like me to answer in my blog, please let me know. I am sure if you are asking them then so are many other colleagues.
Chat soon, Sarah