Hi All,
I am looking for some advice on how best to proceed with this. I submitted my invoice for the last work I did for my old agency (invoice was dated 01-03-2020) and I am yet to be paid.
They are saying that the end customer has not paid them, in-fact they have advised me that the end customer has gone insolvent. I have looked at the guidelines around this and it states that:
"Your agency must also
pay you for work you have done, even if the agency hasn’t been paid by the hiring company
be accurate when placing advertisements"
Employment agency rules | nidirect
I am considering using debt collectors to recover the debt but I am also considering using the government money claim process..
Make a money claim online - GOV.UK
I have had several email correspondence with them and its not been fruitful. They are just telling me about the liquidators etc.
Please do advise on what is the best course of action I should take here.
Thank you all.
+++ FURTHER UPDATES +++
All,
Thank you for all the advise here, here is my update on this. I engaged a solicitor and letter was served given 14 days notice etc. 14 days has now elapsed and I have asked what is the next course of action. Here is the response from the solicitor ( I also asked if there was a proof of delivery for the letter)
"
We do not have proof of delivery. However, for the purposes of ‘pre-action protocol’, the letter is deemed served and we have received no response. The next step, should you wish to take it, will be to issue court action. Prior to doing so, we will need to instruct a barrister to draft particulars of claim, setting out the legal and factual basis of your proposed claim. I also think it sensible to ask the barrister to provide a short written advice on your prospects of success. I estimate that the cost of doing this will be in region of £1,000.00 plus VAT. If you would like to go ahead, please let me know."
My plan now is to use the government make a claim web site for this. Please advise. Thank you
+++ UPDATE +++
All here is an update after engaging a solicitor. Here is what the solicitor has advised..
-----
As promised, I have undertaken a review of the documents provided to me by Adam Home at Safe Collections Limited, which comprise:
‘Provision of Services Agreement & Schedule’, dated 17 January 2019;
‘Contractor Schedule’, dated 25 February 2020.
Letter from companyx to mycompany , enclosing ‘Provision of Services Agreement, Terms and Conditions & Schedule’. These documents are not signed and it is unclear on what date they were sent to you.
As I understand it, your limited company is owed in region of £13,000.00 by compabyx in respect of services it supplied to a company called 3XP Solutions Limited, who are now in liquidation. There is one outstanding invoice (I do not have a copy) and it relates to work undertaken during the month of March 2020. companyx have refused to pay you on the basis that they have not received payment from 3XP Solutions Limited.
Having viewed the e-mail correspondence you have exchanged with Adam, I can see that he has drawn your attention to Clause 10(b)(ii) of the Terms and Conditions that accompany the unsigned Provision of Services Agreement. This states:
“… we may withhold payment if … we do not receive, or we have proper reason to believe that we may not receive, payment of any sums including Expenses”.
You appear to have agreed to this term by reason of the fact you have signed Provision of Services Agreement & Schedule, dated 17 January 2019 and the Contractor Schedule, dated 25 February 2020.
The relationships between employment agencies / businesses and contractors are regulated by The Conduct of Employment Agencies and Employment Businesses Regulations 2003 (“the Regulations”). These regulations contain, at Regulation 12, restrictions on the rights of employment agencies / businesses to withhold payment from contractors. Regulation 12 states:
“An employment business shall not, in respect of a work-seeker whom it supplies to a hirer, withhold or threaten to withhold from the work-seeker (whether by means of the inclusion of a term in a contract with the work-seeker or otherwise) the whole or any part of any payment in respect of any work done by the work-seeker on any of the following grounds –
Non-receipt of payment from the hirer in respect of the supply of any service provided by the employment business to the hirer;
The work-seeker’s failure to provide documentary evidence authenticated by the hirer of the fact that the work-seeker has worked during a particular period of time, provided that this provision shall not prevent the employment business from satisfying itself by other means that the work-seeker worked for the particular period in question;
The work-seeker not having worked during any period other than that to which the payment relates; or
Any matter within the control of the employment business.”
However, Regulation 32(9) permits a work-seeker which is a company to opt out of the Regulations – provided that it gives notice to an employment agency / business and that notice is given prior to the introduction or supply of the work-seeker to the hirer.
As I understand it, your position is that you effectively entered into two contracts with X4 Group Ltd:
An initial contract for the provision of services, dated 17 January 2019 (“the First Contract”); and
A further contract for the provision of services, dated 25 February 2020 (“the Second Contract”).
It is evident from the face of the First Contract that you agreed to opt out of the Regulations. However, I cannot see that you agreed to opt out of the Regulations for the purposes of the Second Contract. If that is the case, it may be possible for you to rely on Clause 12 of the Regulations and argue that the withholding of payment by companyx, notwithstanding Clause 10(b)(ii) of the Terms and Conditions that accompany the unsigned Provision of Services Agreement, is unlawful. For that reason, my initial recommendation would be that we consider sending a letter before action to demand payment of the balance outstanding.
If a letter before action does not result in payment or a response from companyx, the next stage would be to issue court action. The initial cost of doing this would incur legal fees of £200.00 plus VAT and a court fee equivalent to 5% of the debt.
Finally, before instructing us to threaten companyx with court action, it may be worth you giving consideration to the impact not opting out of the Regulations (for the purposes of the Second Contract) will have upon your tax position. I am not a taxation lawyer but it may be worth you checking with your accountant before providing me with further instructions, just in case it will cause you problems.
-----
With regards to the last paragraph, is there anything to worry about not opting in as the solicitor mentioned. I have not seen anything based on my research so far, can you please advise.
Many thanks
I am looking for some advice on how best to proceed with this. I submitted my invoice for the last work I did for my old agency (invoice was dated 01-03-2020) and I am yet to be paid.
They are saying that the end customer has not paid them, in-fact they have advised me that the end customer has gone insolvent. I have looked at the guidelines around this and it states that:
"Your agency must also
pay you for work you have done, even if the agency hasn’t been paid by the hiring company
be accurate when placing advertisements"
Employment agency rules | nidirect
I am considering using debt collectors to recover the debt but I am also considering using the government money claim process..
Make a money claim online - GOV.UK
I have had several email correspondence with them and its not been fruitful. They are just telling me about the liquidators etc.
Please do advise on what is the best course of action I should take here.
Thank you all.
+++ FURTHER UPDATES +++
All,
Thank you for all the advise here, here is my update on this. I engaged a solicitor and letter was served given 14 days notice etc. 14 days has now elapsed and I have asked what is the next course of action. Here is the response from the solicitor ( I also asked if there was a proof of delivery for the letter)
"
We do not have proof of delivery. However, for the purposes of ‘pre-action protocol’, the letter is deemed served and we have received no response. The next step, should you wish to take it, will be to issue court action. Prior to doing so, we will need to instruct a barrister to draft particulars of claim, setting out the legal and factual basis of your proposed claim. I also think it sensible to ask the barrister to provide a short written advice on your prospects of success. I estimate that the cost of doing this will be in region of £1,000.00 plus VAT. If you would like to go ahead, please let me know."
My plan now is to use the government make a claim web site for this. Please advise. Thank you
+++ UPDATE +++
All here is an update after engaging a solicitor. Here is what the solicitor has advised..
-----
As promised, I have undertaken a review of the documents provided to me by Adam Home at Safe Collections Limited, which comprise:
‘Provision of Services Agreement & Schedule’, dated 17 January 2019;
‘Contractor Schedule’, dated 25 February 2020.
Letter from companyx to mycompany , enclosing ‘Provision of Services Agreement, Terms and Conditions & Schedule’. These documents are not signed and it is unclear on what date they were sent to you.
As I understand it, your limited company is owed in region of £13,000.00 by compabyx in respect of services it supplied to a company called 3XP Solutions Limited, who are now in liquidation. There is one outstanding invoice (I do not have a copy) and it relates to work undertaken during the month of March 2020. companyx have refused to pay you on the basis that they have not received payment from 3XP Solutions Limited.
Having viewed the e-mail correspondence you have exchanged with Adam, I can see that he has drawn your attention to Clause 10(b)(ii) of the Terms and Conditions that accompany the unsigned Provision of Services Agreement. This states:
“… we may withhold payment if … we do not receive, or we have proper reason to believe that we may not receive, payment of any sums including Expenses”.
You appear to have agreed to this term by reason of the fact you have signed Provision of Services Agreement & Schedule, dated 17 January 2019 and the Contractor Schedule, dated 25 February 2020.
The relationships between employment agencies / businesses and contractors are regulated by The Conduct of Employment Agencies and Employment Businesses Regulations 2003 (“the Regulations”). These regulations contain, at Regulation 12, restrictions on the rights of employment agencies / businesses to withhold payment from contractors. Regulation 12 states:
“An employment business shall not, in respect of a work-seeker whom it supplies to a hirer, withhold or threaten to withhold from the work-seeker (whether by means of the inclusion of a term in a contract with the work-seeker or otherwise) the whole or any part of any payment in respect of any work done by the work-seeker on any of the following grounds –
Non-receipt of payment from the hirer in respect of the supply of any service provided by the employment business to the hirer;
The work-seeker’s failure to provide documentary evidence authenticated by the hirer of the fact that the work-seeker has worked during a particular period of time, provided that this provision shall not prevent the employment business from satisfying itself by other means that the work-seeker worked for the particular period in question;
The work-seeker not having worked during any period other than that to which the payment relates; or
Any matter within the control of the employment business.”
However, Regulation 32(9) permits a work-seeker which is a company to opt out of the Regulations – provided that it gives notice to an employment agency / business and that notice is given prior to the introduction or supply of the work-seeker to the hirer.
As I understand it, your position is that you effectively entered into two contracts with X4 Group Ltd:
An initial contract for the provision of services, dated 17 January 2019 (“the First Contract”); and
A further contract for the provision of services, dated 25 February 2020 (“the Second Contract”).
It is evident from the face of the First Contract that you agreed to opt out of the Regulations. However, I cannot see that you agreed to opt out of the Regulations for the purposes of the Second Contract. If that is the case, it may be possible for you to rely on Clause 12 of the Regulations and argue that the withholding of payment by companyx, notwithstanding Clause 10(b)(ii) of the Terms and Conditions that accompany the unsigned Provision of Services Agreement, is unlawful. For that reason, my initial recommendation would be that we consider sending a letter before action to demand payment of the balance outstanding.
If a letter before action does not result in payment or a response from companyx, the next stage would be to issue court action. The initial cost of doing this would incur legal fees of £200.00 plus VAT and a court fee equivalent to 5% of the debt.
Finally, before instructing us to threaten companyx with court action, it may be worth you giving consideration to the impact not opting out of the Regulations (for the purposes of the Second Contract) will have upon your tax position. I am not a taxation lawyer but it may be worth you checking with your accountant before providing me with further instructions, just in case it will cause you problems.
-----
With regards to the last paragraph, is there anything to worry about not opting in as the solicitor mentioned. I have not seen anything based on my research so far, can you please advise.
Many thanks
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