Reply to: Does my Agency still owe me money if the Client goes into Administration?

[Safe Collections]

I don't see any reason to settle for less than the full amount owed. The agency is still solvent so they can pay up.

Edited: Wrong post... Sorry Below still stands however.

If it is a case of say 85% paid now or pursuing the full 100%, it may make more sense from a cashflow perspective to accept a reduced settlement rather than incur the extra costs associated with being overdrawn and the like.

[Wanderer]

On a related note, do I have a right to send an invoice for the notice period? In the contract it does say something along the lines of we can terminate without notice if we believe the client will not be able to pay their invoices, but just thought I'd double check!

Hmm, probably not. You should just invoice the agency for the time you worked.

In your specific case, I presume you have already raised an invoice for the time worked? If you haven't then they aren't going to pay, are they! If you have raised an invoice and they have not paid yet then it's well overdue.

I would be inclined to up the ante by sending a final demand with 7 days to pay followed by a "letter before action" but do a search for "dunning" on this forum for some general information about how to chase debts. You are not the first person to be messed about by an agency being slow to pay.

Rest assured that (from what you told us) you have a very strong case. When you send your demands, do not get involved in a slanging match just keep it simple and to the point.

Once the demand is made, there is plenty of opportunity for them to argue the point. Ask them to put everything in writing and reply to them in writing otherwise they tend to turn around and deny it all later on or try some stupid stunts on you.

Good luck!

[speling bee]

Payment terms are 14 days in receipt of invoice. I submitted my invoice at the beginning of September.

I am currently pursuing the line of attack that the contract contravenes statutory regulations and will let you all know how it progresses.

On a related note, do I have a right to send an invoice for the notice period? In the contract it does say something along the lines of we can terminate without notice if we believe the client will not be able to pay their invoices, but just thought I'd double check!

You certainly have the right to send an invoice.

[joe500]

Payment terms are 14 days in receipt of invoice. I submitted my invoice at the beginning of September.

I am currently pursuing the line of attack that the contract contravenes statutory regulations and will let you all know how it progresses.

On a related note, do I have a right to send an invoice for the notice period? In the contract it does say something along the lines of we can terminate without notice if we believe the client will not be able to pay their invoices, but just thought I'd double check!

[Incognito]

I agree it looks like the opt out / in question isn't an issue here. What does your contract state with regards to payment terms I.e payment how long after invoice. Secondly how long had it been since you submitted your invoice?

[Wanderer]

I didn't sign any form that explicitly asked me to opt out, nor is there any mention of this term on my contract.

This means you are NOT opted out which is good news. They agency must pay you even if they don't get paid by the client.

My question is this; are the recruitment agency legally obliged to pay my invoice? In the contract there is a clause which states that they can delay payment

The answer is that they DO have to pay you and they CANNOT delay the payment simply because they haven't been paid. This is your statutory right under the Agency Conduct Regulations.

Don't even let them mess you about by delaying the payment, the agency not getting paid is completely and utterly irrelevant to your situation. Write to them and remind them that they will have to pay a penalty and interest if they don't pay on time.

I would also like the point out that the agency haven't said that they're not going to pay me - they've just been a bit cagey and have stated that they are still waiting for the final word from the administrator. I started this thread speculatively to see where I would stand should that scenario play out. In one of their initial responses post administration they actually sent me an email stating that they would be claiming the bad debt off their credit insurance policy, does anyone know much about this? I appreciate that this is a complex area with multiple factors involved but is it likely that they will be able to claim all their bad debt against this policy or do these policies tend to only provide a proportion of it?

None of this matters. The agency owe you money and that is the end of it as far as you are concerned. If they can't get their money from the end client then that's their tough luck. They still have to pay you the full amount you are owed. Furthermore, even if the client can't or won't sign timesheets then this is no barrier to getting paid either, presuming you can otherwise prove that you worked the hours.

In all honesty given that the contract got a bit muddied towards the end our advice is, if you are offered a reasonable figure in settlement, take it and move on. But don't offer them a discount, pursue the full balance and let them make any offer

I don't see any reason to settle for less than the full amount owed. The agency is still solvent so they can pay up.

[malvolio]

It's comments like that, that are vey dangerous on an Internet forum. It is no walk in the park sitting in front of a Judge arguing your own case. Especially not if the other party has instructed counsel. If the sum in dispute is greater than £5000, as the losing party you are potentially liable for both parties legal costs which can quite quickly amount to five figures. Your suck it and see analogy could easily result in the OP losing a lot of money, so again to the OP you really should consult with a legally qualified individual if you want the best answer.

WHo said anything about arguing your own case - although if you do, and if you know your facts, you get a much easier ride than a qualified counsel would. Oh if only there were an organsation that would support such a case to completion in the interests of all contractors...

More to the point, obviously the first step is to get qualified legal advice (hint: most if not all solicitors will give you 30 minutes free consultation, more than enough to establish the rights and wrongs of a case). Then you would have an idea whether or not an action is a sensible next step. It may not be, but then we're all grown ups running our own companies, so we ought to be able to assess the risk for ourselves.

So why do you assume the OP isn't able to make that call for themselves?

[Safe Collections]

In one of their initial responses post administration they actually sent me an email stating that they would be claiming the bad debt off their credit insurance policy, does anyone know much about this? I appreciate that this is a complex area with multiple factors involved but is it likely that they will be able to claim all their bad debt against this policy or do these policies tend to only provide a proportion of it?

Credit insurance is much like any other insurance, you pay a premium for cover and as long as you abide by the terms set out by the insurer they will cover any bad debts.

Provided the client co has stuck to the letter of the policy the insurance will pay out. But like all insurers they will probably try and find a loophole to avoid payment if at all possible...

In all honesty given that the contract got a bit muddied towards the end our advice is, if you are offered a reasonable figure in settlement, take it and move on.

But don't offer them a discount, pursue the full balance and let them make any offer

[joe500]

First of all I would just like to thank everyone for their extremely useful and insightful comments.

I didn't sign any form that explicitly asked me to opt out, nor is there any mention of this term on my contract. I have to get my timesheet approved by the client on a weekly basis if that helps show I'm opted-in??) So on the basis of that I'm pretty certain I haven't opted out.

I would also like the point out that the agency haven't said that they're not going to pay me - they've just been a bit cagey and have stated that they are still waiting for the final word from the administrator. I started this thread speculatively to see where I would stand should that scenario play out.

In one of their initial responses post administration they actually sent me an email stating that they would be claiming the bad debt off their credit insurance policy, does anyone know much about this? I appreciate that this is a complex area with multiple factors involved but is it likely that they will be able to claim all their bad debt against this policy or do these policies tend to only provide a proportion of it?

Thanks

[Safe Collections]

At this point I must make clear, I have no affiliation with any collection agencies that have posted on this thread or on the site. I am not a lawyer however I am a law student. I advise you to seek independent legal advice no matter what you decide to do.

We think he means us

Well OK, but I was not wrong in my intial response either.

No slight intended We agree the question around the opt in/out is relevant but it isn't the only issue.

So long as it's not tested in court or clarified in statute, it will remain as a grey area so Agencies can happily continue with their bully, bluff and bluster tactics then claim that it was an honest interpretation of the law if they get challenged....

We couldn't agree more.

It's comments like that, that are vey dangerous on an Internet forum. It is no walk in the park sitting in front of a Judge arguing your own case. Especially not if the other party has instructed counsel.

We wouldn't fight our own claim and we have a more than passing familiarity with the law.

If the sum in dispute is greater than £5000, as the losing party you are potentially liable for both parties legal costs which can quite quickly amount to five figures. Your suck it and see analogy could easily result in the OP losing a lot of money, so again to the OP you really should consult with a legally qualified individual if you want the best answer.

It should also be noted that costs can be awarded in small claims matters as well, at the Judges discretion. As one judge told a client of ours who got hammered for costs in small claims "litigation is a risky business!"

[Incognito]

That's a very good point but the fatal flaw is that the agency will NEVER allow it to be tested in court because it's quite likely that they will lose the case and this will potentially create a precedent or case law.

A county court judgement is not binding.

[Incognito]

The actual answer is simple. If they don't pay the OP on invoice, sue them for breach of contract and breach of the Regulations and see what happens. I somehow doubt that will come to pass, though.

It's comments like that, that are vey dangerous on an Internet forum. It is no walk in the park sitting in front of a Judge arguing your own case. Especially not if the other party has instructed counsel. If the sum in dispute is greater than £5000, as the losing party you are potentially liable for both parties legal costs which can quite quickly amount to five figures. Your suck it and see analogy could easily result in the OP losing a lot of money, so again to the OP you really should consult with a legally qualified individual if you want the best answer.

[Wanderer]

the law is totally untested: nobody has ever challenged it. The OP could easily be the first to do so, hence "this could be interesting".

That's a very good point but the fatal flaw is that the agency will NEVER allow it to be tested in court because it's quite likely that they will lose the case and this will potentially create a precedent or case law.

So long as it's not tested in court or clarified in statute, it will remain as a grey area so Agencies can happily continue with their bully, bluff and bluster tactics then claim that it was an honest interpretation of the law if they get challenged. When a worker stands up and assets their rights with the threat of legal action they will quietly back down and offer a confidential settlement as a "goodwill gesture" and no admission of liability so the charade goes on...

[malvolio]

Wanderer & Boo are correct.

Looking for any freelance work folks?

Well OK, but I was not wrong in my intial response either. Every time such a question is asked, the usual suspects leap up with the "are you opted in" question, ignoring the detail that almost everyone is unless they both fully understand the rules and have acted at the appropriate time. And if you've signed a clause in your contract allowing witholding of payment - which you will have read carefully at the time, of course - you will know the answer to the question as posed.

The actual answer is simple. If they don't pay the OP on invoice, sue them for breach of contract and breach of the Regulations and see what happens. I somehow doubt that will come to pass, though.

As for "relatively untested", the law is totally untested: nobody has ever challenged it. The OP could easily be the first to do so, hence "this could be interesting".

[Incognito]

I’d be grateful for any help anyone can provide.

As the guys have said, any assistance is going to depend upon your circumstances. Firstly we need to know (a) have you opted out and (b) at what point did you opt out. The law around this area is quite complex and relatively untested.

There is a distinction between an introduction and a supply of a work seeker. For most contractors, the typical scenario would be covered under an introduction. However I'd need to see your contract before advising further.

Going on the assumption that you have only been introduced, the pertinent question is did you opt out prior to that introduction. The regulations don't make it easy in trying to understand what is meant by an introduction. Some people on here and the PCG seem to think it means the initial interview, however I don't think it's as clear cut as that. If you refer to the guidance on the regulations produced by the DTI (at p. 20), they talk about the practical definition of an introduction being day one of you actually starting your 'employment.' Whilst this is only regarding the interpretation of Regulation 20(5) and (6) I am pretty confident that a party would likely use this as part of their defence and this would likely be a key battleground in any proceedings. It is entirely plausible that a Court would construct Reg 20 in that way whilst constructing Reg 32 (the Opt Out) in such a way that the introduction is when you first meet the hirer, I.e. the interview.

Assuming you've signed an opt out form post interview, the Agency will likely argue that you are opted out. You have several options at this point. If the agency play hardball I'd suggest the following:

- Contact your MP, give a brief description of your situation and advise you don't believe you are opted out, but you are unsure due to the lack of definition of an 'introduction'. Ask them to write to the BIS (Vince Cable's department replacing BERR/DTI) on your behalf and ask them to clarify at what stage of the process does Regulation 32 refer to when referring to the term 'introduction' is it the interview or first day on the job.

- Additionally, make a complaint to the Employment Agency Standards Inspectorate state your case again, advise you are unsure about the definition of 'introduction' however you believe you have not opted out and wish to make a complaint about the agency. It's a criminal offence to breach any of the Regulations and the EAS can prosecute the agency. Whilst this is not directly relevant to you, if they are convicted it makes it (potentially) a lot easier for you to recover your money. You might have to deal with some low level individuals here, but if you make it clear you've requested your MP to clarify the situation with the BIS you should get some traction from both ends.

- At this point you would either sue the agency yourself, either in an action for an agreed sum or breach of contract. It is important to note here, your best option in a situation like this is typically not for breach of contract, but is an action for an agreed sum. It is usually easier to argue that you have performed a contract and are due money than arguing that the other side have caused you damage by not performing their side of the bargain.

Be advised though, all this is a lot of work. You may be better off letting someone else do the hard work for you. Just remember though, the more you do yourself the less it should cost you. If you got a solicitor to do all of the above it'd be a quite considerable sum. You could do the first two steps yourself and then leave it to a collection agency to pursue the last bit. There are a couple that post on this site and even one in this thread. I'm not aware of how they've performed so from a site point of view it'd be good to get a real life case study.

Before you do anything though, the very first question you should ask yourself should be is it worth pursuing. I realise you're out of pocket and it's bloody annoying, but it's pointless chasing the agency if they can't afford to pay you themselves. It would cost you a lot of time and money for a pretty hollow victory if all you achieved was forcing the agency to go bust with nothing being paid out to you. Again you could seek advice on this from a collection agency who may be better placed to advise you on the viability of the agency as a precursor to you actually pursuing any of the above.

At this point I must make clear, I have no affiliation with any collection agencies that have posted on this thread or on the site. I am not a lawyer however I am a law student. I advise you to seek independent legal advice no matter what you decide to do.

Apologies it is so long winded.

Incog.