Self Employed IT Contractor – Recruitment Agency Withholding Payment

[malvolio]

The client can't end the contract. It's between you and agents. They can stop giving you work and walk you off site though.

Are you sure you breached contract? What is the notice period? If it is a week then they haven't lost a penny as the client paid it and the terms of the contract have not been breached.

Details... We need more details...

The client can end the contract with the agency, or they can say that the supplied worker isn't up to the job. If they do the former then arguably there is no loss involved since the agency would not have been getting further income anyway. If they do the latter then it is the contractor that's failed to deliver his contract and the agency are right to recover their losses - and they will have suffered a loss even if they can wheel in someone new immediately.

Since in this case the client has paid time served and notice I can't see the OP has anything to complain about.

[northernladuk]

The client can end the contract with the agency, or they can say that the supplied worker isn't up to the job. If they do the former then arguably there is no loss involved since the agency would not have been getting further income anyway. If they do the latter then it is the contractor that's failed to deliver his contract and the agency are right to recover their losses - and they will have suffered a loss even if they can wheel in someone new immediately.

They haven't suffered a loss at all. The terms of the contract allow it and they were followed. It is potentially expected that the contractor might leave early, for whatever reason. That's why the terms are there. The same terms would suit the agency if they want to quit the contract early and we'd not say the OP can sue for losses.

It's there in writing...

The Consultant Company shall indemnify and hold harmless XYZ against any and all claims costs expenses losses or damages whether direct or consequential arising from the Consultant Company's breach of any provision of this Contract including all administration costs and all claims costs expenses losses or damages arising from the negligence or acts or omissions of the Consultant Company or its employees agents or subcontractors.

No breach.. no losses.

Since in this case the client has paid time served and notice I can't see the OP has anything to complain about.

Erm... The agency want 5k+ VAT off him.. You missed that bit?

[NotAllThere]

...

Erm... The agency want 5k+ VAT off him.. You missed that bit?

It depends. We're assuming it's 5K of the invoices he submitted for work done. It might be that 5K is the value of the remaining contract to full term, and he's invoiced them for work not done.

[northernladuk]

It depends. We're assuming it's 5K of the invoices he submitted for work done. It might be that 5K is the value of the remaining contract to full term, and he's invoiced them for work not done.

I can't believe that. Who invoices the full term of a contract? The agency wouldn't have accepted them anyway.

When he says '
As a result of this breach XYZ has incurred losses, such losses amount to £5k + VAT. In accordance with clause 3(f) and 10 of the contract, XZY shall deduct this sum from outstanding invoices. '

You'd imagine these are valid invoices backed up with a timesheet surely else the whole thing is a complete mess.

Would be nice if the OP can clarify though.

[malvolio]

They haven't suffered a loss at all. The terms of the contract allow it and they were followed. It is potentially expected that the contractor might leave early, for whatever reason. That's why the terms are there. The same terms would suit the agency if they want to quit the contract early and we'd not say the OP can sue for losses.

It's there in writing...



No breach.. no losses.


Erm... The agency want 5k+ VAT off him.. You missed that bit?

the client binned him for poor performance. The agency contract (any agency contract) requires a level of performance that does not lead to him being binned. Ergo, he has breached the contract.

In more usual circumstances, such as projects drying up or whatever, then there is no breach because the contractor was not the cause.

It's not that hard to understand.

[northernladuk]

the client binned him for poor performance. The agency contract (any agency contract) requires a level of performance that does not lead to him being binned. Ergo, he has breached the contract.

In more usual circumstances, such as projects drying up or whatever, then there is no breach because the contractor was not the cause.

It's not that hard to understand.

I see where you come from but they binned him as per the terms of the contract whatever the reason. It's in black and white.

We'll agree to disagree here but I'll be interested to see how this ends up so hope he keeps us posted.

[PerfectStorm]

Got IPSE? This is the point they should 'spring into action'

[LondonManc]

The 5k+VAT sounds like the agency's missed future commission, based on the OP working to end of contract.

They shouldn't be able to take it from you as the money they have been paid so far is for work already completed that the client have been prepared to sign off. They should not withhold the payments and any lawsuit they bring against you should be a separate issue, payable from yourco's bank, not from any outstanding monies.

[malvolio]

The 5k+VAT sounds like the agency's missed future commission, based on the OP working to end of contract.

They shouldn't be able to take it from you as the money they have been paid so far is for work already completed that the client have been prepared to sign off. They should not withhold the payments and any lawsuit they bring against you should be a separate issue, payable from yourco's bank, not from any outstanding monies.

Come to think of it, why VAT? It's a recovery of a debt, or a penalty for non-performance, not an invoice for services rendered so why is VAT applicable?

[northernladuk]

Come to think of it, why VAT? It's a recovery of a debt, or a penalty for non-performance, not an invoice for services rendered so why is VAT applicable?

Because it's complete rubbish made up by the agent trying to bully the OP.