Client fabricated agreement to reduce notice, agency not honouring contract

[7specialgems]

Hang on a minute.

If I engage a company to do 30 days work at £500 per day - and then after 2 days turn around and tell them I no longer want them fine - but I will still be paying for 30 days work at £500 per day.

The point is they have engaged your company until date x for a fee per day with a 20 day termination clause.

Surely they have to pay for the 20- days even if they do not want you to work it?

Or not?

That's my understanding of it.

I am the owner of/employed by my own IT consultancy and this client has reserved the use of one of my consultants (me) for the period of the contract, which includes a notice period if they decide that they don't want to procure the services until the end of the term.

You don't "just" run out of work. Poor planning on the client's part is no excuse not to honour the contract. My consultant (me) should have been issued termination notice sooner and then I would already have gone.

I also rather take the view that "but that's how it is for us" is self-fulfilling. If everyone took a hard line with this sort of practise the romantic in me would like to think that we would see less of it.

I know that morals and business seldom go together, but rant over

In reply to Northern Lad - public sector, poorly managed project, money has run out, client has panicked and issued termination to virtually the entire project which is about 30 contractors. Short sighted as usual, project about 95% there, close to shipping, burnt its pot early, government would rather bin it and have another go on the public purse on next year's budget rather than show a bit of nous, reduce the headcount a little bit and ship (oh and by the way they have virtually zero in-house technical talent).

In reply to the chap recommending a couple of pints - sound advice, duly being followed as I type

[northernladuk]

Hang on a minute.

If I engage a company to do 30 days work at £500 per day - and then after 2 days turn around and tell them I no longer want them fine - but I will still be paying for 30 days NO work at £500 per day.

The point is they have engaged your company until date x for a fee per day with a 20 day termination clause.

Surely they have to pay for the 20- days even if they do not want you to work it?

Or not?

You are not doing any work. How can you charge them £500 for no work....

[northernladuk]

That's my understanding of it.

I am the owner of/employed by my own IT consultancy and this client has reserved the use of one of my consultants (me) for the period of the contract, which includes a notice period if they decide that they don't want to procure the services until the end of the term.

Yep and over that period they will pay for for every day worked.

You don't "just" run out of work. Poor planning on the client's part is no excuse not to honour the contract. My consultant (me) should have been issued termination notice sooner and then I would already have gone.

Wouldn't that be a lovely world. But it isn't this one.

I also rather take the view that "but that's how it is for us" is self-fulfilling. If everyone took a hard line with this sort of practise the romantic in me would like to think that we would see less of it.

Rubbish.

[speling bee]

That's my understanding of it.

I am the owner of/employed by my own IT consultancy and this client has reserved the use of one of my consultants (me) for the period of the contract, which includes a notice period if they decide that they don't want to procure the services until the end of the term.

You don't "just" run out of work. Poor planning on the client's part is no excuse not to honour the contract. My consultant (me) should have been issued termination notice sooner and then I would already have gone.

I also rather take the view that "but that's how it is for us" is self-fulfilling. If everyone took a hard line with this sort of practise the romantic in me would like to think that we would see less of it.

I know that morals and business seldom go together, but rant over

In reply to Northern Lad - public sector, poorly managed project, money has run out, client has panicked and issued termination to virtually the entire project which is about 30 contractors. Short sighted as usual, project about 95% there, close to shipping, burnt its pot early, government would rather bin it and have another go on the public purse on next year's budget rather than show a bit of nous, reduce the headcount a little bit and ship (oh and by the way they have virtually zero in-house technical talent).

In reply to the chap recommending a couple of pints - sound advice, duly being followed as I type

The client may not have run out of work but you have. Consider what would happen if the agency gave you 1 month's notice but advised there would only be work for the next week.

But it's not nice so enjoy your pints.

[Wanderer]

I took the line that my contract is with the agency, the clause is clear and unambiguous

Yep, I would take the exact same line.

Is this a cut and shut case of going down the Small Claims?

It depends on a number of things.

Does your contract give the agency the right to terminate the contract without notice, change the notice period or to tell you that there is no obligation to offer work during the contract (ie, a zero hours type clause)? If so, you may have a fight on your hands to get the money you think you are owed. Now is the time to read the contract very carefully. It does sound like the agency are just saying "tough tulip" without actually explaining anything which makes it sound even more likely that they are trying it on and hoping that you will just bend over and take it like a man.

Did you agree to opt out of the agency conduct regulations? If you didn't then you are in a much stronger position but it's not the end of the world if you did opt out.

The fact that they are paying at least part of the notice period seems to imply that they are contractually obliged to pay you for the notice period. If they were NOT contractually obliged to pay any notice period at all then I can assure you that they wouldn't be paying it! To my mind, if they can pay any of the notice period at all then they can pay the whole bloody lot.

Invoice for the notice period they are offering and try to get your money for that. Send a separate invoice for the remaining notice period - it is likely that they will refuse to pay this invoice. Just follow the standard procedure (search for "dunning" on this forum) but basically, you submit an invoice then chase it up a couple of times, don't forget to add the penalties and interest. Then send a "letter before action" to the agency director and if that doesn't work then start an action in the small claims court. It's quite likely that they will just pay up (rightly or wrongly) without it coming to court because they won't want the hassle.

The other option is to talk to a debt collection agency and ask if they will review your contractual terms and advise if you have any chance of getting your money and take the case on for you. Remember that you can recover your debt collection costs from the agency if you win.

One thing I can tell you for sure though - if you don't even invoice them then there is ZERO chance that they will pay you so submit the invoice anyway. You can also use this as proof of financial risk if it ever comes to an IR35 investigation.

Finally, have you asked the client what notice period they are paying the agency off with? It's possible that the agency are pulling a fast one on you or the agency have offered to do the dirty work for the client and save them a bit of money by denying the contractors payment for their notice period.

Good luck and let us know how you get on!

[CheeseSlice]

The time to take action is when you've done the work and then you're told they've run out of money and can't pay you for it.

In this case the clientco, whilst incompetent at budgeting and planning by the sounds of it, has held up their hands and told your agent that they have no work or no money, or both. They've prevented anyone from getting into the unpaid work situation, so you should count yourself lucky.

[psychocandy]

This old 'client notice period is pointless because they can just not pay you' is fair enough.

And I know everyone is going to disagree but imagine telling client/agency that you're giving them a months notice as per contract but you dont want to accept any work for that month so you wont be in.

Wont go down well.

[vwdan]

This old 'client notice period is pointless because they can just not pay you' is fair enough.

And I know everyone is going to disagree but imagine telling client/agency that you're giving them a months notice as per contract but you dont want to accept any work for that month so you wont be in.

Wont go down well.

It won't no, but he doesn't have to ever work with these people again if he doesn't want to. The sad truth is that most of us need the work more than the work needs us.

[northernladuk]

This old 'client notice period is pointless because they can just not pay you' is fair enough.

And I know everyone is going to disagree but imagine telling client/agency that you're giving them a months notice as per contract but you dont want to accept any work for that month so you wont be in.

Wont go down well.

But you are in a client/supplier relationship. The power base isn't equal so you can't apply the same logic to both parties.

And anyway, you can. The client will moan like stink but nothing will come of it. Just like some contractors do.

[speling bee]

But you are in a client/supplier relationship. The power base isn't equal so you can't apply the same logic to both parties.

And anyway, you can. The client will moan like stink but nothing will come of it. Just like some contractors do.

Exactly. I'd be interested to hear from an expert whether a client has any legal comeback if MyCo gives 1 month's notice as per contract and then advises that I will be unavailable for the last three weeks.