Issue with a non-paying agent.

[Wintelftw]

Hi All,

Last summer I started a new contract with an agent, via which I was providing IT engineering services to their client. The engagement model was the usual arrangement although I was aware of a clause in the contract which I had not seen in previous engagements. This isn’t exactly what was written, I can go and verify this for all, but this is basically the length of it :-

“The contractor shall invoice the agent, which shall be paid once the agent has received payment from the client.”

Now, for anyone working through a factored agent then this might not raise any eyebrows, however it transpires that this particular agent is not factored at all and so a number of contractors were engaged at the same time, all of which had to wait to invoice at the end of the billing period (30 days) and then wait for the agent to bill the client and wait a further 30 days for the invoice to be paid – which doesn’t sound too horrible until you discover that the client, despite being a multi-billion-dollar turnover organisation, turns out to be one of the worst payers out there.

I’m not engaged with this agent any more and I’m enjoying working for a more reputable agent that is 100% factored and pays my invoices weekly, on the dot.

The question is this. The aforementioned agent still has outstanding invoices to pay which are now due almost 120 days and I’m rather tired of chasing them. Does that clause that I’ve listed above actually affect my legal right to be paid for services that I’ve provided? Can they legally do this and does it stack up in law? Yes I’ve signed the contract but on the basis of what I’ve described, can this be considered to be legally binding? Have I really just waived away my right to be paid for work I’ve done? Is that even possible?

What I want to do is just register a small claim against them, but I don’t want to do that if it transpires I’ve effectively waived that right in signing this contract.

Thanks,
Wintelftw

[TestMangler]

Have you 'opted out' ?

[pmeswani]

Hi All,

Last summer I started a new contract with an agent, via which I was providing IT engineering services to their client. The engagement model was the usual arrangement although I was aware of a clause in the contract which I had not seen in previous engagements. This isn’t exactly what was written, I can go and verify this for all, but this is basically the length of it :-

“The contractor shall invoice the agent, which shall be paid once the agent has received payment from the client.”

Now, for anyone working through a factored agent then this might not raise any eyebrows, however it transpires that this particular agent is not factored at all and so a number of contractors were engaged at the same time, all of which had to wait to invoice at the end of the billing period (30 days) and then wait for the agent to bill the client and wait a further 30 days for the invoice to be paid – which doesn’t sound too horrible until you discover that the client, despite being a multi-billion-dollar turnover organisation, turns out to be one of the worst payers out there.

I’m not engaged with this agent any more and I’m enjoying working for a more reputable agent that is 100% factored and pays my invoices weekly, on the dot.

The question is this. The aforementioned agent still has outstanding invoices to pay which are now due almost 120 days and I’m rather tired of chasing them. Does that clause that I’ve listed above actually affect my legal right to be paid for services that I’ve provided? Can they legally do this and does it stack up in law? Yes I’ve signed the contract but on the basis of what I’ve described, can this be considered to be legally binding? Have I really just waived away my right to be paid for work I’ve done? Is that even possible?

What I want to do is just register a small claim against them, but I don’t want to do that if it transpires I’ve effectively waived that right in signing this contract.

Thanks,
Wintelftw

This has been covered a few times, I believe. However, unless you can prove the agent has been paid, I am unsure if you have a leg to stand on. If you are on good terms with ClientCo, you can ask your Hiring Manager to find out if the Agent has been paid. If you can collate evidence to prove they have been paid, then you may have a case against the old agent.

HTH.

[Wanderer]

“The contractor shall invoice the agent, which shall be paid once the agent has received payment from the client.”

That's a nasty trick. Who was the agency?

Did you opt out of the agency regulations? Read this sticky and understand that you should NEVER opt out.

Do a search here for "dunning" and there is lots of advice but really it boils down to this:

Send them a copy of the unpaid invoice with a covering letter saying it's well over due, plus an invoice for Interest and penalties. Send it "Signed for" and address it to the director of the agency.

Make it clear to them that they have 7 days to pay up or face court action to recover the debt and that no further delays will be tolerated. Be polite but firm, don't get into a load of details just tell them you want the money. Now.

If they don't pay, send them a final warning headed "notice before action" then start action in the small claims court.

[TheFaQQer]

“The contractor shall invoice the agent, which shall be paid once the agent has received payment from the client.”

so what value does the agency provide here? I trust you won't be making the same mistake again.

had to wait to invoice at the end of the billing period (30 days) and then wait for the agent to bill the client and wait a further 30 days for the invoice to be paid – which doesn’t sound too horrible

Sounds like an absolute nightmare - no way would I consider giving anyone 60+ days credit as a routine matter

The aforementioned agent still has outstanding invoices to pay which are now due almost 120 days and I’m rather tired of chasing them.

120 days after you invoiced, or 120 days after they received payment from the client? From the earlier clause, they don't become due until the client has paid them.

Does that clause that I’ve listed above actually affect my legal right to be paid for services that I’ve provided?

No.

Can they legally do this and does it stack up in law? Yes I’ve signed the contract but on the basis of what I’ve described, can this be considered to be legally binding?

Yes, and yes.

Have I really just waived away my right to be paid for work I’ve done?

No - you have the right to be paid when the agency gets paid.

Is that even possible?

Yes, you could waive the right to be paid. Plenty of companies do it to deal with bad debt.

What I want to do is just register a small claim against them, but I don’t want to do that if it transpires I’ve effectively waived that right in signing this contract.

Without proving that the agency has been paid, then there isn't much you can do. If you can prove that the agency has been paid, then there are legal avenues that can be pursued. But since no money is due to you until they have been paid, then there's no point in a court case yet.

Have a look at www.payontime.co.uk for advice as well.

[TheFaQQer]

That's a nasty trick.

It's standard practice if going via an umbrella.

[prozak]

That's a nasty trick.

It's standard practice if going via an umbrella.

Therefore, All umbrellas are nasty?

[TheFaQQer]

Therefore, All umbrellas are nasty?

Sorry, I'll rephrase.

An umbrella will not pay without receiving funds from the agency. I can understand why they operate that way, but I can't see why anyone would go with an agency that does nothing for their money once they have found you.

[SueEllen]

. I can understand why they operate that way, but I can't see why anyone would go with an agency that does nothing for their money once they have found you.

Clauses like that are for people who don't read their contracts.

Even if you get your contract reviewed by someone they will not neccessarily point a clause like that out to you as it's in plain English.

[TheFaQQer]

Clauses like that are for people who don't read their contracts.

Even if you get your contract reviewed by someone they will not neccessarily point a clause like that out to you as it's in plain English.

Agreed - it also depends on what you are paying the review for. An IR35 review won't pick that up, whereas a full contract review might.