Help - Unpaid invoice working via an umbrella company

[the4thamigo_uk]

Hi I have recently moved into the contracting world and am currently near completion of my second contract working under an umbrella company and via an emplyment agency. Everything has been more or less smooth running until this month when the end client has not paid the agency. As a result of this the agency have not paid my umbrella, within 30 days of invoicing as stated in the contract between the umbrella and the agency.

As I understand it, formally I am an employee of the umbrella company and I have a contract (A) with the umbrella stating that they will pay me when they receive funds from the agency. There is also a contract of services between the umbrella and my agency (B) defining the rate, dates and payment terms for my period of work with the end client. Finally the agency has a contract (C) with my end client. The situation is such that I submit timesheets to both my agency so they can invoice the end client as well as a separate timesheet to the umbrella.

So legally speaking if the end client does not pay, contract C is breached. If the agency does not cover the costs of the non-payment and in turn refuses to pay my umbrella then contract B will be breached.

Am I correct in assuming that since I am not a signator of contract B, I cannot sue to recover payment on the basis of contract B?

My umbrella does not take any cut of the money coming from the agent so it has no incentive to make a claim under contract B on my behalf. If they are unwilling to do this, what is the correct legal route to recovering my monies owed?

[privateeye]

You should seek legal advice - there is a court order known as a Garnishee Order which can enable you to bypass third parties in a contract chain and go direct to whoever is the source of the debt. It is a bit complicated to do without a solicitor so seek advice first.

I've often found the best way is to inform such debtors of how you can legally obtain the money from them - it often scares them into paying. I think a lot of non-payers think that they can easily get away with it but if you show them that you know how to do it the story changes.