Agency withholding payment

**Wanderer** · 27 November 2012, 19:46

Originally posted by kloot View Post

I did some work for a company a few months ago through an agency called People4. The company I was working for then started to fall behind on their payments to the agency. People4 state on their website 'We guarantee payment for contracts' so I thought I would be protected. However, People4 withheld my money whilst they took the client to court. The client eventually paid up but People4 are now saying that they want to deduct legal fees from the money they owe me. Their justification is that I was working on a particular type of contract where no money is guaranteed unless the client has paid up front. However, my contract kept getting renewed, even when the client (unknown to me) hadn't paid.

I was wondering if anyone had any thoughts on how to proceed from here?

Hi and welcome!

First question is did you sign the opt out that they were so anxious for you to sign? If you didn't then they have to pay you regardless of if the client pays them or not.

If you did opt out then it comes down to what's written in your contract. If it says in the contract that they can hold back all or part of your money if the client doesn't pay then they can completely screw you if they want to.

**contractor79** · 27 November 2012, 20:19

The agency might be lying to you. It's happened before. I'd get hold of a solicitor and demand the payment from the agency before the agency goes bust then you get nothing.

**NotAllThere** · 28 November 2012, 10:11

Procedure is:
Invoice
Dun
Threaten with court
Take to court.

Simples.

**Safe Collections** · 28 November 2012, 10:46

Originally posted by kloot View Post

I did some work for a company a few months ago through an agency called People4. The company I was working for then started to fall behind on their payments to the agency. People4 state on their website 'We guarantee payment for contracts' so I thought I would be protected. However, People4 withheld my money whilst they took the client to court. The client eventually paid up but People4 are now saying that they want to deduct legal fees from the money they owe me. Their justification is that I was working on a particular type of contract where no money is guaranteed unless the client has paid up front. However, my contract kept getting renewed, even when the client (unknown to me) hadn't paid.

I was wondering if anyone had any thoughts on how to proceed from here?

No money is guaranteed?!?

We would love to see that contract!

Seriously though, look at your contract. If the contract includes a clause that allows the agency to retain funds due to client non-payment then it will be difficult (but not impossible) to argue differently.

If the contract does not include a clause like this (and we suspect the contract doesn't) then the agent is just trying it on.

If your contractual relationship is with the agent as it normally is, then the agency has to pay you irrespective of if the end client has paid. But this is open to interpretation now depending on the status of your opt in/out.

**borderreiver** · 28 November 2012, 11:17

Originally posted by kloot View Post

The client eventually paid up but People4 are now saying that they want to deduct legal fees from the money they owe me.

They can do this? I would speak to a solicitor. Sounds like bulltulip to me.

**psychocandy** · 28 November 2012, 12:03

I vote for agency trying it on.

But opted-out status may be relevant here.

**malvolio** · 28 November 2012, 12:08

People4 are not really an agency. Go look at their website.

However you can certainly sue them for misrepresentation and report them to the ASA for false advertising. One line from the "About" page rather stands out -

– We guarantee to pay all Candidates for every hour they work on a people4 contract

**Safe Collections** · 28 November 2012, 12:49

Originally posted by borderreiver View Post

They can do this? I would speak to a solicitor. Sounds like bulltulip to me.

If its in the contract then they can (although you may be able to argue the technicality, but that would be up to a judge).

**kloot** · 2 January 2013, 15:52

Thanks for all the comments. I finally got my cash but they deducted about £400 for legal fees. I had signed the opt-out clause which had all sorts of horrors in it including 'you indemnify the agent against the cost of any legal action etc, etc'. I've been a contractor for quite a few years but have always worked for big clients and big agencies but should have done more due diligence in this case. In the end I settled with them as involving solicitors could have cost me that much.

It's a lesson for me about the opt-out clause.

Agency withholding payment