Recruitment agency won't pay until their client pays

[it werker]

I did some contract work for a third party via a recruitment agency. In the T&Cs of the recruitment agency they say they will only pay the contractor if and when their client pays them. It’s been over 30 days since they have been emailed an invoice by my umbrella company. Am I entitled to charge interest in accordance with the Late Payment Act 1998 or does that clause make them exempt? Is that clause lawful? I don't particularly want to start charging interest but I was hoping mentioning it might make them pay up sooner. My feeling is that since the contract is between me and the recruitment agency payment shouldn't depend on their client. If their client doesn't pay or is late paying they should have to shoulder the cost.

[SueEllen]

Are you opted-in or opted out?

(And if you don't know what that means then do a search on the forum.)

[it werker]

Until you just mentioned it I was unaware of the recruitment agency regulations. So if this option was never presented to me have I by default opted-in?

[Wanderer]

Until you just mentioned it I was unaware of the recruitment agency regulations. So if this option was never presented to me have I by default opted-in?

Yes.

To be pedantic, there is no "opt-in" - you are automatically in by default unless you opt-out before being introduced to the client. If you didn't know about this then it's unlikely that you have opted out.

agency say they will only pay the contractor if and when their client pays them.

They just put that there to scare you, it doesn't mean tulip because it's not enforceable.

I don't know how it works if there is an umbrella company between you and the agency though because you have a contract with the umbrella who have a contract with the agency. Can the contractor go after the agency in this instance? I don't know.

Considering the bulltulip the agencies give contractors, you shouldn't be scared to give them a bit back and fire off a letter threatening to terminate the contract and take legal action to recover the debt (plus interest and late payment fees) if full settlement is not made within 7 days and future payments made on time.

http://www.payontime.co.uk/legislati...tion_main.html

[Epiphone]

If that clause is in the contract and you (or your bolly) agreed to it then that means the agency is better at negotiating than you (or your brolly).

Bet you read the contract better next time.

[it werker]

There was no contract. It was in the "timesheet and payment procedure document" I received a day after I started.

[Hex]

There was no contract. It was in the "timesheet and payment procedure document" I received a day after I started.

But you didn't object to any of the terms, so you de facto accepted them. However, it sounds like you are opted in, so they can't use the fact that the client is not paying to withold money regardless of their terms.

[Paddy]

Yes.

To be pedantic, there is no "opt-in" - you are automatically in by default unless you opt-out before being introduced to the client. If you didn't know about this then it's unlikely that you have opted out.



They just put that there to scare you, it doesn't mean tulip because it's not enforceable.

I don't know how it works if there is an umbrella company between you and the agency though because you have a contract with the umbrella who have a contract with the agency. Can the contractor go after the agency in this instance? I don't know.

Considering the bulltulip the agencies give contractors, you shouldn't be scared to give them a bit back and fire off a letter threatening to terminate the contract and take legal action to recover the debt (plus interest and late payment fees) if full settlement is not made within 7 days and future payments made on time.

http://www.payontime.co.uk/legislati...tion_main.html

Warn them if they don’t pay within seven days you will take them to court. Send a copy to the agent, the umbrella company and the end client. If they don’t pay take out a small claim and put all three as defendants. You will be amassed of how quickly they will pay up.

[questiontime]

There was no contract. It was in the "timesheet and payment procedure document" I received a day after I started.

is their name the same as the current season.

I had very bad experience with them recently. In all fairness, part of the problem was the client.

[it werker]

Thanks all for the advice.

I'm going down the "you're breaking the 2003 agency regulations" route. I'm fairly certain this would be covered under that. Just in case it's useful to anybody if you get no joy with negotiation, you can report them to the Employment Agency Standards who will do an investigation. Basically they will try and get them to conform to the law and if they don't they can fine them £5000 and ban them from the employment industry for 10 years.

Having an umbrella company complicates things. I can never see them doing more than invoicing the agency via email, they don't get paid enough. So getting them involved would seem like a bad idea. Not sure how the courts would see it, if it ever came to that.