Agency refusing to pay correct rate - are terms contract lock in terms enforcable

[Wingnut724]

Speak to the client and be prepared to walk out a couple of hours afterwards.

If you do walk out, send a letter by 24 hour registered post to the agency head office claiming breach of contract and enclosing an invoice for the amount of money they have taken off you giving them a legally reasonable time to pay (21-28 days) and state you will take action to recover the debt if it is not paid and they will be liable for costs plus interest.

Then contact Safe Collections, who frequently post on here, for advice. It is frequently better to send a debt collection firm after non-payers rather than take them to court as smaller agencies will go out of business rather than pay up.

Thank you. I have already drafted the invoice. I will speak to the Safe Collections for advice.

The Agency is large and established and has a nationwide customer base.

[Wingnut724]

Have you actually received that in writing? If not, I'd try to get it in writing before talking to the client.

Once you have that in writing, then you have proof that they are not honouring the contract that has been signed. At that point, any handcuff has to be dead, and if you want to go direct you almost certainly can. They can't hold you responsible to honour the handcuff provision if they won't honour the payment provisions. But I would NOT talk to the client until you have the above in writing from them.

Once you do, you can go to the client and say, "The agent agreed a rate with me, and we signed a contract. They are now saying I need to amend our agreement and work for a lower rate or cancel the contract. I would be quite happy to work direct and not through an agency at all, for what you agreed to pay them. Since the middle-man isn't sticking by their agreement, are you interested in cutting out the middleman?"

But you have to get in writing that they aren't going to honour the contract you've signed with them. (They won't say it quite that bluntly, but hold their feet to the fire until you get something specific in writing. They signed a written contract with you, they should give you a written demand to amend it.) If you act without that proof, you run the significant risk that they'll mess things up with the client. Their contract with the client will have a handcuff agreement. They may try to enforce that. If you can provide written evidence that they've intentionally breached your contract, that makes it much easier for the client to tell them to get lost. Without that written proof, the client is likely to say, "I don't want the hassle or to have the agency drag us through legal trouble, goodbye." They might say that anyway, but if they like you and you can prove the agent is blowing off contractual provisions, you've got a decent chance of coming out of this pretty well.

Thanks.

Yes they emailed me the options of accept the lower rate and we will re-issue the contract with these revised terms or cancel your contract. All my communications to date have been via email so I have a full written record. The client has worked directly with individuals before. They have also used agencies before but not this particular agency as far as I am aware.

[cojak]

Looks like you’ve got this all sewn up.

I would be looking forward to this if I were you, don’t forget to come back with the gory details tomorrow night!

[Wingnut724]

Thanks every one for your help.

I will let you know how it goes

[psychocandy]

Thanks.

Yes they emailed me the options of accept the lower rate and we will re-issue the contract with these revised terms or cancel your contract. All my communications to date have been via email so I have a full written record. The client has worked directly with individuals before. They have also used agencies before but not this particular agency as far as I am aware.

Thats a compete piss take in my book. No chance...

Im assuming this is not PS and therefore no IR35 to muddy the waters here?

Sounds like agency have screwed up big time on the rate and are making nothing/losing which is why they are trying to do this. Easy out for them - just you that they have to take employer NI off first (even when they don't) and hope you dont kick off. And, as you can see here, front it out by attempting to get a new, correct contract in place.

[northernladuk]

That's a compete piss take in my book. No chance...

Im assuming this is not PS and therefore no IR35 to muddy the waters here?

Eh?

Hi,

I am currently working on a contract via an agency under my Limited Company and have been working for the end client for 3 months now. The contract is inside IR35.

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Sounds like agency have screwed up big time on the rate and are making nothing/losing which is why they are trying to do this. Easy out for them - just you that they have to take employer NI off first (even when they don't) and hope you dont kick off. And, as you can see here, front it out by attempting to get a new, correct contract in place.

But couldn't be that they've accidently stated gross rather than net on contract?

Like in this thread and others I CBA finding...

https://forums.contractoruk.com/busi...-2-months.html

[psychocandy]

Eh?




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But couldn't be that they've accidently stated gross rather than net on contract?

Like in this thread and others I CBA finding...

https://forums.contractoruk.com/busi...-2-months.html

Quite possibly you're right this is what they've done i.e. stuck gross down not net. BUT, if the rate on the contract matches what was agreed verbally/via email etc then surely the contractor has accepted in good faith and agency need to suck it up now. Not saying that come renewal time this won't change - after all either party can do as they please then.

Big difference to the contractor knowing that there's been a mistake made and keeping quiet about it of course.

BUT, its a bit off that they're trying to wangle out of it. Also, IF a mistake has been made, how is the client going to react when after x months you tell them agency has made a big mistake, they've dropped the rate, it no longer works for you, therefore you can't renew. I would imagine client is going to be less than pleased if this happens if they had every intention of renewing.

[northernladuk]

Quite possibly you're right this is what they've done i.e. stuck gross down not net. BUT, if the rate on the contract matches what was agreed verbally/via email etc then surely the contractor has accepted in good faith and agency need to suck it up now. Not saying that come renewal time this won't change - after all either party can do as they please then.

He's accepted it on good faith in a contract that has a notice period that allows the agent to rectify his mistake. You more than most keep saying the notice period is there to be used, so now it's in the agents interest to invoke it. They are after all losing money so why would they continue?

Big difference to the contractor knowing that there's been a mistake made and keeping quiet about it of course.

indeed

BUT, its a bit off that they're trying to wangle out of it. Also, IF a mistake has been made, how is the client going to react when after x months you tell them agency has made a big mistake, they've dropped the rate, it no longer works for you, therefore you can't renew. I would imagine client is going to be less than pleased if this happens if they had every intention of renewing.

They'd have to deal with it open and honestly and move on. Crap happens to everyone at some point and no contractor is irreplaceable. I'm still interested to know exactly how much it is. OP has mention a number of the period of the gig but how much off the daily rate is it?

Let's just see. You never know, the agency might actually just fold and pay him it. If so I'd be suspicious he's being ripped off on his rate. If the agent is on fixed percentage around the 8% I'd guess they will be losing money and have no choice.

[WordIsBond]

He's accepted it on good faith in a contract that has a notice period that allows the agent to rectify his mistake. You more than most keep saying the notice period is there to be used, so now it's in the agents interest to invoke it. They are after all losing money so why would they continue?

Yes, the agency could tell him they will invoke the notice period and cancel if he won't amend the rate. You could respect that. They made a mistake, it is the best they can do, the contract permits that.

The contract does not permit them to pay less than agreed for work he has already done, and tell him that if he doesn't like it he has to cancel. It's a weaselly way to try to keep the handcuffs on while paying less. They are in breach of contract. He could probably both go direct AND get the money he's owed for the work he's done, though the latter may not be worth the hassle.

[eek]

Yes, the agency could tell him they will invoke the notice period and cancel if he won't amend the rate. You could respect that. They made a mistake, it is the best they can do, the contract permits that.

The contract does not permit them to pay less than agreed for work he has already done, and tell him that if he doesn't like it he has to cancel. It's a weaselly way to try to keep the handcuffs on while paying less. They are in breach of contract. He could probably both go direct AND get the money he's owed for the work he's done, though the latter may not be worth the hassle.

Given that the contract is inside IR35 you could just wait a while and then kick off an employment tribunal - I’ve heard stories that they are a lot of them planned.