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    Default Payment in lieu and unlawful terms in 'opt in' contract

    Hi, I'll try and keep this as brief as possible as I have a habit of writing too much sometimes

    My background: Professional contractor / senior developer with 17 years solid experience. I have a good reputation within the industry for being a pleasant and reliable worker, and as such am lucky enough to enjoy good contract extensions with very few gaps between roles.

    On 28th September I began a new role Oxforshire. The contract itself was between Haybrook IT acting as an employment business, and my limited company. I also chose to OPT IN to The Conduct of Employment Agencies and Employment Businesses Regulations 2003 from the beginning of the process, and this is also explicitly acknowledged in the contract. I'm aware of the tradeoff between opting in and IR35 but on this occasion I was considering a move to perm next year and felt the non compete would be of benefit)

    9.2. The Supplier has chosen to “opt in” of the Conduct of Employment Agencies and Employment Businesses Regulations 2003.

    I had been brought in at a senior level to ensure "high quality" and offer "project estimation" , alongside general development services. However, after just a few days it was clear that the project was being taken in the wrong direction due to extremely poor coding from an offshore team resulting in an emerging framework that was completely unsuitable and unscalable for the forthcoming requirements. I raised this strongly with some team members and managers but was met with the attitude of "It's a load of c##p but why should you care, you still get paid, just do as your told". A day later my line manger took me aside and claimed that due to his own "personal issues", he didn't have time to deal with any potential 'friction' within the project, and ultimately dismissed me there and then.

    I informed the agency and asked them for an official notice of termination which then took two weeks to supply. It didn't give any reasons and when I asked them they responded with the following:

    "It is our considered view that actually we don’t have to give you a specific reason as that was apparently dealt with between yourself and the client at the time of your dismissal. Our contract just says “if the client dismisses contractor for any reason including, but not limited to…” and the client HAS dismissed you. That’s all we care about. And the client is not prepared to pay a notice period, therefore we aren’t, and don’t have to because of clause 3.3.3

    We are concerned about the potential loss of business caused by your dismissal from the client, and would therefore be in our right to hold back unpaid invoices as compensation for that loss which was caused directly by your actions. However, in this case, we are going to pay all unpaid invoices for work done up to the dismissal, as the client has said that they will pay us, but obviously we will not be paying the notice period as, as far as we understand, there was no notice period, dismissal was instant, and the client will not be paying us for the notice period.

    We do however reserve the right to seek recompense from you if, as a result of your dismissal and actions, we lose future business from the client, and therefore suffer financial loss or loss of future profits as a result of your dismissal and actions."


    They have since stated that they 'believe' the reasons to be.. poor work performance / attitude / unsuitability related, but seem unsure and continue to use phrases like "we don't care" and "we take no responsibility whatsoever for the event”.

    I am now in a dispute for them for 2 week's payment in lieu of notice, but the 'get out of jail free' clause that they are citing from the aforementioned email is:

    "The Agent may terminate this Agreement:
    3.3.3 Without notice, if the client, at whose location the Services are being performed under this Agreement terminates its Contract with the Agent for any reason including, but not restricted to, the technical incompetence, unsuitability, or unprofessional conduct of the Supplier."


    The contract schedule has the following regarding termination (and bear in mind that 'gross misconduct' has not been claimed by anyone party)

    "2 weeks written notice by Supplier, 2 weeks written notice by agency.
    In exceptional circumstances, the contract may be terminated by the Client for reasons of poor performance. Formal termination of the contract would only occur after prior counselling/warning had been given to the contractor and at least one week given for improvement to occur. In the case of gross misconduct no period of notice will be given and formal termination will be immediate".


    Incidentally, I was not offered any opportunity for remedy or indeed substitution.

    Now surely, since this was an opted in contract the suitability should have been ensured by them before introduction to their client (the hirer)? In accordance with Regulation 22(2)(b) they should also have obtained two reference, however it transpires that they didn't contract either of the two recent referees that were provided, each of whom would have offered excellent references. Their threat of withholding payment is also seemingly at odds with the Conduct Regs.

    My overall questions therefore, with the 'opt in' status of the contract in mind are:
    • What are the chances of me successfully pursuing the 2 weeks payment in lieu that is due (which is in excess of 5K)
    • Is there a claim for damages in that official written notice from the agency took 2 whole weeks to be sent whilst my company was out of pocket?
    • They are threatening to counter claim if i proceed to a claim, in that I may have damaged their relationship with the client. What are their chances of this being successful given that there has been no impact on their other contractors who still continue to work there.

    Additionally (and I'm now aware that my initial promise to keep this 'brief' has now bolted from the window ) the contract includes a 6 month non compete clause, threats of withholding payment for work done if no documentary evidence (i.e. timesheets) is provided and other irregularities that contravene the Conduct Regs... would it be worthwhile contracting the EAS inspectorate?

    Once again, apologies for the lengthy email but I just want to get across as many as the facts as I can so that I can hopefully glean some useful advice either way from the members of this forum. If anyone would like a DM of the contract to be able to kindly shed more light on this, I'm happy to oblige.

    Many thanks.

  2. #2

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    Quote Originally Posted by edan291 View Post
    ...
    They are threatening to counter claim if i proceed to a claim, in that I may have damaged their relationship with the client. What are their chances of this being successful given that there has been no impact on their other contractors who still continue to work there. ...
    IANAL but...

    I don't think they'd have any chance, and their threat to counter sue is likely to be a bluff to prevent your pursuing them for payment of notice period.

    It should be pointed out that any advice you get here is worth the paper it's printed on. If you want proper legal advice - talk to a lawyer. FWIW though, if I was in your situation, I'd continue with the claim for payment of notice.
    You won. Get over it.

    --drunk on abuse of power--

  3. #3

    My post count is Majestic

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    If you are trying to keep it short why are you telling us you are a reliable and pleasant worker? Shouldn't that be filed under WGAS?

    Anyway.... You are getting in to the realms of needing a lawyer here. They do have the right to instant dismissal based on a number of factors, some of which the client firmly believes you meet so you are gone. You are going to have to get in to a legal argument over the terms of gross misconduct. The client believes it's enough, you don't. It's going to be down to the lawyers to fight that one out which is going to be very expensive. I think you have got to take that one on the chin.

    They probably do have a right to counter claim and I'm not sure I'd be as confident as NAT. By getting terminated the agent has to spend money to find a replacement so there is a tangible loss that could be considered so they could have an argument. The chance of them doing this is slim to nil though. It would cost too much to follow up.. for the same reasons you won't either. Situations like this very rarely go legal because of the costs.

    I'd say they have you bang to rights. They believe gross misconduct (although arguable) and have exercised the terms of the contract.

    That said, what is the legal out come often has no relation to the actual outcome. If you fight hard enough with them someone will cave at some point because it's just not worth going legal. Depends on the size of your cojones and how much time and effort you want to spend on this.

    Just another thing though. Don't think you have lost 5k. You didn't work it so didn't earn it. You wouldn't have gotten it if the contract had come to a natural end so not quite 'owed' money like if you had earned it.
    Last edited by northernladuk; 20th October 2015 at 11:32.
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    Respect my authoritah!

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    I understood it as: Opted in. Got walked, agent refusing to honour notice period and threaten to sue for their loss of income, what are my options?
    You won. Get over it.

    --drunk on abuse of power--

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    OP - Out of interest what did you do to upset the client so much? How 'strongly' did you object?

    All well and good pointing things out that you disagree with of course and I'm sure you're being professional here but bottom line is you've upset the client and got canned.

    The phrase "Not my circus, not my monkeys" seems apt here. If client has decided that they want to do something one way, then they bring in a contractor to help out, the last thing they want is for said contractor to come in and start upsetting everyone.

    You're probably right in everything you've said to them but they've decided not to listen anyway and they've got rid of so it hasn't worked out well.

    As for notice period, I'd just tell the agent tough tulipe, I'm going for that notice period payment please. And then start a claim if they don't pay.

    Assume you have signed timesheets for the time you were there? In which case, agent hasn't got a leg to stand on threatening not to pay these.

    Only way is if they can prove somehow you did something negligent I reckon. Just disagreeing with them and having a few arguments is not negligent.

    Unless of course you did chin someone
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    This seems like two separate issues that they are trying to roll up into one.

    If you have signed timesheets, they should be honoured.
    The greatest trick the devil ever pulled was convincing the world that he didn't exist

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    Thanks for the replies so far. Psychocandy, you sum it up pretty well. I'm a senior Dev and was placed on a project that had this far been run by juniors. There was no gross misconduct, that hasn't been mentioned in the slightest, the client just felt I would 'rock the boat' despite having introduced me on the first day and said "I'd really welcome your feedback".

    NLUK, thanks also, the reason I stated my record was to illustrate that this situation is a one off for me and I am not a habitual 'complainer'. I rarely post on any forums so please forgive and unessesary detail I may have added.

    I do view the 2 weeks disputed notice as loss of earnings because I didn't simply walk into a new contract the following day, and in fact they had already kept me waiting a week past the initial start date due to general faffing around.

    I was technically more than suitable for the role, but my point is that if they wish to use the notion of unsuitability and NOT gross misconduct, then it was my understanding that the conduct regs places onus on the agency up front before introduction to the client. My references and history show that I am regularly lead developer and team leader, so to place me in a role that wanted just an 'ask no questions code monkey' was a little irresponsible of the agency in my eyes.

    Anyway, I do appreciate the feedback and I am going to weigh all of this up against the potential hassle involved. I am in a new role now anyway.

    Thanks
    Last edited by edan291; 20th October 2015 at 14:29.

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    Ps. I do have fully authorised time sheets for the 4 days work which I am still requesting payment for 3 weeks later.

  9. #9

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    Quote Originally Posted by edan291 View Post
    My background: Professional contractor / senior developer with 17 years solid experience.
    ...
    1. What are the chances of me successfully pursuing the 2 weeks payment in lieu that is due (which is in excess of 5K)
    2. Is there a claim for damages in that official written notice from the agency took 2 whole weeks to be sent whilst my company was out of pocket?
    3. They are threatening to counter claim if i proceed to a claim, in that I may have damaged their relationship with the client. What are their chances of this being successful given that there has been no impact on their other contractors who still continue to work there.
    1 - little to none. You can try chasing for it, but getting paid to do no work (depending on the wording of your contract) is unlikely to happen

    2 - I doubt it

    3 - If your actions cost them business, and they can show that, and there is a clause which allows them to claim damages then they could. But since they have other people there it's unlikely that your actions impact them at all
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  10. #10

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    Quote Originally Posted by edan291 View Post
    9.2. The Supplier has chosen to “opt in” of the Conduct of Employment Agencies and Employment Businesses Regulations 2003.
    Irrelevant, you've been terminated by the client with immediate effect, the reason given amounts to proven to be unsuitable or acted unprofessionally.

    Quote Originally Posted by edan291 View Post
    I had been brought in at a senior level to ensure "high quality" and offer "project estimation" , alongside general development services. However, after just a few days it was clear that the project was being taken in the wrong direction due to extremely poor coding from an offshore team resulting in an emerging framework that was completely unsuitable and unscalable for the forthcoming requirements. I raised this strongly with some team members and managers but was met with the attitude of "It's a load of c##p but why should you care,
    It doesn't matter what you say, without a large lump of proof otherwise, namely a statement from each of the site people that you talked to, the client will say you acted unprofessionally by publicly criticising their approach. As someone new to the project a word to one side asking why the approach is taken and "clarifying" would have been sensible. Too late now they've pulled the pin.

    Quote Originally Posted by edan291 View Post
    I informed the agency and asked them for an official notice of termination which then took two weeks to supply. It didn't give any reasons and when I asked them they responded with the following:

    "It is our considered view that actually we don’t have to give you a specific reason as that was apparently dealt with between yourself and the client at the time of your dismissal. Our contract just says “if the client dismisses contractor for any reason including, but not limited to…” and the client HAS dismissed you. That’s all we care about. And the client is not prepared to pay a notice period, therefore we aren’t, and don’t have to because of clause 3.3.3

    We are concerned about the potential loss of business caused by your dismissal from the client, and would therefore be in our right to hold back unpaid invoices as compensation for that loss which was caused directly by your actions. However, in this case, we are going to pay all unpaid invoices for work done up to the dismissal, as the client has said that they will pay us, but obviously we will not be paying the notice period as, as far as we understand, there was no notice period, dismissal was instant, and the client will not be paying us for the notice period.

    We do however reserve the right to seek recompense from you if, as a result of your dismissal and actions, we lose future business from the client, and therefore suffer financial loss or loss of future profits as a result of your dismissal and actions."


    They have since stated that they 'believe' the reasons to be.. poor work performance / attitude / unsuitability related, but seem unsure and continue to use phrases like "we don't care" and "we take no responsibility whatsoever for the event”.
    There's very little mileage you can make in that situation, the Agent will point to the fact the client told you to your face to get lost, it's at best a fine print dispute and you can't argue that you didn't know. The termination was done because you displayed a poor attitude, that's easily spun into "unprofessional conduct"

    Quote Originally Posted by edan291 View Post
    I am now in a dispute for them for 2 week's payment in lieu of notice, but the 'get out of jail free' clause that they are citing from the aforementioned email is:

    "The Agent may terminate this Agreement:
    3.3.3 Without notice, if the client, at whose location the Services are being performed under this Agreement terminates its Contract with the Agent for any reason including, but not restricted to, the technical incompetence, unsuitability, or unprofessional conduct of the Supplier."


    The contract schedule has the following regarding termination (and bear in mind that 'gross misconduct' has not been claimed by anyone party)

    "2 weeks written notice by Supplier, 2 weeks written notice by agency.
    In exceptional circumstances, the contract may be terminated by the Client for reasons of poor performance. Formal termination of the contract would only occur after prior counselling/warning had been given to the contractor and at least one week given for improvement to occur. In the case of gross misconduct no period of notice will be given and formal termination will be immediate".


    Incidentally, I was not offered any opportunity for remedy or indeed substitution.

    Now surely, since this was an opted in contract the suitability should have been ensured by them before introduction to their client (the hirer)? In accordance with Regulation 22(2)(b) they should also have obtained two reference, however it transpires that they didn't contract either of the two recent referees that were provided, each of whom would have offered excellent references. Their threat of withholding payment is also seemingly at odds with the Conduct Regs.
    If you want them to I'm sure they will add a gross misconduct wording to the much more polite unprofessional conduct.

    You've dropped a massive bollock in the clients eyes, there's no going back from that, all you can do since they've agreed to pay all outstanding invoices is make things worse and possibly attract attention to yourself by making it public in court.

    Walk away with a shred of dignity, your face didn't fit and they got rid.

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