Help Required / Contractor Dispute

[ammark]

I am an IT contractor/freelancer working in the IT contracting market here in London since June 2004. I joined Brookson Ltd as my umbrella company in Jan 2005, which forms a limited company for me, pays part of my money as a permanent salary and the other to the limited company of which I am a shareholder. So I am an employee of Brookson as well as shareholder in the limited company they form for me. I have a membership no in this company too.

When we find a new contract anywhere, we ask the contract agency to pass the agreement to Brookson. Brookson negotiates for IR35 compliance, but other than that, it is we who agree on a daily rate. Brookson charges a small fee on each weekly timesheet it processes and as contractors we pass them our signed timesheets, and they invoice the client/agency for them.

I started contracting with Etheios (a city consultancy) on July 11, 2005 and an agreement was reached b/w Brookson and Etheios which stated that I would provide my services. The agreement stated a 4 weeks notice period. The contract allowed me to join any other contract while I am working or providing services here.

On Oct 07, 2005 I asked Etheios if I could leave them on Oct 14, 2005, thus effectively giving them 1 week time period. The project was in a very comfortable state and I showed the testimonies of my workmates to my project manager about the impact on the proejct if I leave. My project manager Morgan Sheehan (from Etheios) showed some reluctance but agreed to see if some tasks can be finished in the coming week. I also pledged him that I would still remain available to the project and they just need to call me after Oct 14, 2005 if they need so. I finished all the tasks by Oct 13, 2005 noon time, and at about 1600 GMT on Oct 13, 2005, my project manager Morgan Sheehan came to my desk, and asked me to leave within 10 minutes and never show up again. So effectively he fired me on Oct 13, 2005.

I didn't mind that, as I wanted to leave myself too and it was verybally agreed with Morgan too. However now it was clear, they would not call me next week to ask to come, as they burned all the bridges. I have about 25 days timesheets signed from Etheios which I presented to Brookson. However, to my astonishment, Etheios sent a claim of abot £6000+ losses to Brookson which were heavily fabricated and I think it was me who should be sending a claim against them. Now Brookson told me that even to reply to their claim, I have to pay for their lawyer (Brookson's lawyer) which is completely nonsense as it is a dispute b/w Brookson and Etheios. I told my case again and again and also sent documents to Brookson to let them know how Ethios is breaching the contract, and not me, they don't listen. They have not payed for my 25 business days since Oct 2005.

I have contacted DWF and DTI employment standards. Anyone who is experienced of such disputes could give me any adivce?


Thanks
Ammar Khalid

[malvolio]

So the four-week term in the contract didn't count? Did you have your fingers crossed when you signed it or something?

It's really quite simple - you break a contract, you get smacked. Nobody owed you anything and now you've proven yourself to be unreliable (they don't actually care about your work, only the legalities). So fight away if you wish, although I don't think you've got much of a case - but don't whinge when you break the rules and get punished.

And I find it amazing that people think they can run through a clear tax avoidance arrangement via a Ltd Co with no intention of running their own business properly, then complain when they have to face up to the realities of their actions and (shock horror!) pay for professional advice. It's not Brookson's problem, it's yours (or to be precise, your Ltd's).

Grow up, dry your eyes, go look for the next contract.

[Denny]

So the four-week term in the contract didn't count? Did you have your fingers crossed when you signed it or something?

It's really quite simple - you break a contract, you get smacked. Nobody owed you anything and now you've proven yourself to be unreliable (they don't actually care about your work, only the legalities). So fight away if you wish, although I don't think you've got much of a case - but don't whinge when you break the rules and get punished.

And I find it amazing that people think they can run through a clear tax avoidance arrangement via a Ltd Co with no intention of running their own business properly, then complain when they have to face up to the realities of their actions and (shock horror!) pay for professional advice. It's not Brookson's problem, it's yours (or to be precise, your Ltd's).

Grow up, dry your eyes, go look for the next contract.

What daft advice. It is clear that Ammar got agreement from his project manager to leave before the contractual notice period, left when the project was not in a vulnerable state was up to demonstrate that. The end-client have clearly done the dirty on him by claiming underperformance and fabricating evidence of this to justify a claim for damages against his brolly.

Ammar I would get independent legal advice if I were you. Too many clients are stiffing up contractors via their mediators. You may have a fight on your hands though but I fully support you. Whether the DTI will intervene I don't know, but I doubt that they will, as they will simply claim that this is a contractual matter and not within the remit of the scope of the Employment Agencies Act.

Go and see a solicitor immediately and don't honour any claim via your limited company until you do.

[XLMonkey]

Ammar,

unfortunately, it doesn't look like you have any basis for a claim. By breaking the notice period in the contract you have lost the (very limited) protection that the contract offers. It is unlikely that DWP/DTI will be able to help (or interested in helping either).

Your company has no rights to pursue the outstanding 25 days, since you carried them out as an employee of Brookson, not as an employee/director of the company.

You don't have any rights as an employee since, under the arrangement with Brookson, they will not have to pay you unless or until Etheios pay.

The good news (if that's the word), is that the £6000 claim from Etheios is probably designed to make clear that they won't pay the outstanding 25 days. I would be surprised if they actually tried to impose it.

Next time round, if you want to break the terms of your contract, you must get agreement in writing in advance.

Write the time off, don't make the same mistake again, go do whatever was so important that you had to leave at a week's notice.

[privateeye]

If you had the agreement in writing that you could leave earlier from the contract - I would have suggested that you obtain what is known as a Garnishee Order which enables you to bypass all the middle men and go to the source of the debt. However, it looks like you have shot yourself in the foot here.

I think you may have to accept you have been a bit un-professional here and just have to accept that there is a case against you because of that. There was 4 week notice period - you should have used that. You should have kept some sort of paper/email trail of any communication regarding modifying your notice clause as you haven't you have no evidence to take it further - even if you are right.

[XLMonkey]

Hot damn. Garnishee Order. I kneeeww there was a word for it!

[privateeye]

Hot damn. Garnishee Order. I kneeeww there was a word for it!

I've had the pleasure of hand deliverring one of those to an agent who boasted to a contractor he had no chance of getting his money because the contract chain was. Contractor - UK Umbrella - Offshore Umbrella - Agent - Client. The Client had given me proof of payment to the Agent. The Contractor got their money but all the betweenies got nowt.

[malvolio]

What daft advice. It is clear that Ammar got agreement from his project manager to leave before the contractual notice period, ...big snip....

Not that daft, since it is in fact correct. Anyway, I''m not qualified to help the OP with a fairly ambiguous legal question - I am qualified to judge that he has failed miserably to behave as a freelance, failed miserably to honour a legal and binding contract and failed miserably to realise the difference between employee and company owner. Plus he's out a lot more than the three weeks earnings he was not willing to work to compelte his contract.

It all goes to support my consistent assertion that there are employees, freelancers and tax avoiders, and the latter group have only themselves to blame for getting their fingers burnt.