Agency witholding funds and threatening to go insolvent

[Southernest]

Hello,

First of all this is my first post so my apologies if I commit some major faux pas.
I have run through the forum but couldn't find any thread related to my situation, hence the new one.

I have been working for my end client for over 10y now and was told to use a Placement Agent as shield between the Financial Institution and myself. That Placement Agent did not find me the contract neither did they do anything for me, bar passing the funds paid to them to my umbrella company.

Things have been fine until 2 or 3yrs ago when payments to my umbrella started to be late with little or no explanations given. Then they requested that their payment terms changed from 21 days to 30 days from invoice date. Which I agreed.
Things did not improve, just got worse and worse.

Until a couple of month ago, despite many promises, I was still owed monies due on invoices for Oct 19, Nov 19 and Dec 19. Eventually Oct and Dec were paid (Nov was the highest).
I have had many emails conversation with the manager of the Placement Agent, I have had many promises of payment, on April 1st I was told that a payment plan will be set up from June 1st. Of course June 1st came and went and still no payment.

Finally on June 3rd I was sent an email by the said Manager giving me 2 options:
Option 1: Agree to 65% of the invoice and walk away.
Option 2: Agree a 10 month payment plan.

Given that it is very obvious that the company is in dire straits, Option 2 is a non starter. i am being told that it is either 1 or 2 or they will file for insolvency and I am unlikely to get anything.

I have since found out that the Director of the company (as per Companies House) has walked away and delegated all daily operations to the said manager.
The said manager has registered an IT Recruitment Company with Companies House in March 2020.
The said manager has told me that he isn't a salaried employee of the Placement Agent but invoice for his services.
The said manager has told me that he is also a debtor of the company.
The said manager has told me that he is a shareholder of the company.

For completeness, I was Opt Out of Reg 32 at the time and would have been considered an employee of an umbrella company.

Has anyone come across such a rat's nest of a situation?

Is their behaviour even legal? Short of going to Court and facing the risk that I end up with no one to speak to, what are my options?

Thanks,

Southernest

[Old Greg]

Do you have this in writing?

Research this Trading while insolvent - Wikipedia

Contact Safe Collections.

[GhostofTarbera]

Agency witholding funds and threatening to go insolvent

So you have agreed with your end client to stop paying this company already until you find a new one ? Or they pAy the umbrella directly (no idea why you did this in 1st place) ??


Sent from my iPhone using Contractor UK Forum

[Southernest]

Yep, I have all of it in writing and will indeed look at the post.
However I feel that the Agent is dead man walking.

Do you have this in writing?

Research this Trading while insolvent - Wikipedia

Contact Safe Collections.

[Southernest]

End client is not interested in the slightest. as far as they are concerned, work was done, payment was made, end of.
I requested that they held the funds before and was denied, 'Not our problem' I was told.
And on basis that I am the last Contingent Worker left from that Placement Agent, zero leverage from that corner.

So you have agreed with your end client to stop paying this company already until you find a new one ? Or they pAy the umbrella directly (no idea why you did this in 1st place) ??


Sent from my iPhone using Contractor UK Forum

[TheDogsNads]

End client is not interested in the slightest. as far as they are concerned, work was done, payment was made, end of.
I requested that they held the funds before and was denied, 'Not our problem' I was told.
And on basis that I am the last Contingent Worker left from that Placement Agent, zero leverage from that corner.

Im afraid you're between a rock and a hard place. Only you really know how far up tulip creek the payer is. It comes down to your attitude to tough it out.

65% of something is better than nothing but could you be sure you'd get the 65% in full? You could call on someone like Safe Collection for advice. They'd give you an idea of what percentage they'd be able to recover. Theoretically, it would be 100% but the likelihood is it wouldnt be that much more than the 65% on offer plus, they'd also need paying for their services.

In your shoes, Id talk to someone like Safe Collections to see what they say. At the end of the day, unless you're very lucky, you're going to lose money here. Your best strategy is to get out losing as little as possible.

I hope you're successful because losing any money is a PITA and a bitter pill to swallow.

[JoJoGabor]

Another recommendation for safe-collections.com here. They do this all the time and know how far they can push. They're not bully boys and will explain your options to you.

One thing I learned when in a similar position is that if the agency are paying you late, they are in breach of contract so you are not bound to any terms of the contract. I'm not sure if this would apply to the contract between agency and client, but if that was void nothing would stop you from working for the client directly, so at least you can continue your work with them while sorting out this debt

[Old Greg]

Another recommendation for safe-collections.com here. They do this all the time and know how far they can push. They're not bully boys and will explain your options to you.

One thing I learned when in a similar position is that if the agency are paying you late, they are in breach of contract so you are not bound to any terms of the contract. I'm not sure if this would apply to the contract between agency and client, but if that was void nothing would stop you from working for the client directly, so at least you can continue your work with them while sorting out this debt

That is absolutely not necessarily true.

[jmo21]

Until a couple of month ago, despite many promises, I was still owed monies due on invoices for Oct 19, Nov 19 and Dec 19. Eventually Oct and Dec were paid (Nov was the highest).

And on basis that I am the last Contingent Worker left from that Placement Agent, zero leverage from that corner.

Are you still working for the client/agent? Have you been paid for Jan20-May20??

Is it only Nov19 you are waiting for?

[rootsnall]

A bit late but you should have cut and run at the first sign of late payment. And I'd say that still applies if you are still working through that agency. You've just got to hope they are still collecting money from enough mugs elsewhere. Call in the money collection outfits and see if they can apply the correct pressure to get them to pay you off.