Agency wont pay my invoice because end customer has not paid them Agency wont pay my invoice because end customer has not paid them
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  1. #1

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    Default Agency wont pay my invoice because end customer has not paid them

    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
    Last edited by aokanlawon; 23rd October 2020 at 12:05. Reason: Updating with new information

  2. #2

    Respect my authoritah!

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    Go through The Late Payment of Commercial Debts Regulations 2013 - Pay On Time. Don't engage in any further email exchanges, just send a final demand via registered letter explaining that if payment is not made within the next 7 days, you will begin legal action to recover the debt. If it's not too much, then you'll be able to use the small claims court.

    Or sell the debt to a debt-collection agency for an easier life.

    And next time, don't leave it so long.
    Down with racism. Long live miscegenation!

  3. #3

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    Does your contract say anything about not being paid unless the end client does?

    Do you have IPSE+ membership?
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  4. #4

    bored now

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    Quote Originally Posted by aokanlawon View Post
    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:
    Ignore what you've found online - what does your contract with the agency say - unless it explicitly mentions that you won't be paid until they are paid the agency has to pay you.

    Given that it's been 6 months debt collectors won't really help here so just pay out the fee and use Make a money claim online - GOV.UK

    But in future treat debt collection as a process - invoice them, wait 30 days and then throw it at someone like Debt Collection and Debt Recovery from Safe Collections to do the next stages.
    merely at clientco for the entertainment

  5. #5

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    Quote Originally Posted by northernladuk View Post
    Does your contract say anything about not being paid unless the end client does?

    Do you have IPSE+ membership?
    Here is a clause in the contract. This is a MAY and not WONT. Do I still have a case?

    See section 10(b)ii:

    10 (b) we may withhold payment if

    ….

    (ii) we do not receive, or we have proper reason to believe that we may not receive, payment of any sums including Expenses

  6. #6

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    Quote Originally Posted by northernladuk View Post
    Does your contract say anything about not being paid unless the end client does?

    Do you have IPSE+ membership?
    No I do not have IPSE+ membership

  7. #7

    bored now

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    Quote Originally Posted by aokanlawon View Post
    Here is a clause in the contract. This is a MAY and not WONT. Do I still have a case?

    See section 10(b)ii:

    10 (b) we may withhold payment if

    ….

    (ii) we do not receive, or we have proper reason to believe that we may not receive, payment of any sums including Expenses
    I need more than that to give you an answer but actually it's completely irrelevant as the clause may or may not be legal.

    So take a step back,

    1) Do you have signed timesheets?
    2) Have you appropriately, correctly and legally opted out of the Agency Regulations prior to being introduced to the client?

    If the answer to 2 is No (and chances are even if the agency thinks they have issued an opt out correctly, they probably haven't) then the clause is once again irrelevant.

    So basically go to the small claims court with the appropriate evidence (unpaid invoice, signed timesheets, you can probably even ignore the contract to begin with) and start a claim for the money. Chances are once the agency sees that they will work out a means of paying.

    Next time however be far more organised - this should have been at Safe Collections by 10th April 2020 and heading towards court by the end of June.
    merely at clientco for the entertainment

  8. #8

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    Quote Originally Posted by eek View Post
    I need more than that to give you an answer but actually it's completely irrelevant as the clause may or may not be legal.

    So take a step back,

    1) Do you have signed timesheets?
    2) Have you appropriately, correctly and legally opted out of the Agency Regulations prior to being introduced to the client?

    If the answer to 2 is No (and chances are even if the agency thinks they have issued an opt out correctly, they probably haven't) then the clause is once again irrelevant.

    So basically go to the small claims court with the appropriate evidence (unpaid invoice, signed timesheets, you can probably even ignore the contract to begin with) and start a claim for the money. Chances are once the agency sees that they will work out a means of paying.

    Next time however be far more organised - this should have been at Safe Collections by 10th April 2020 and heading towards court by the end of June.
    Thank you. I have contacted safe collections and they are reviewing the contract. I did sign the agency opt out regulation for the initial contract but not subsequently for the extension. I am hoping this is okay. I have learnt my lessons and will not allow this to happen again.

  9. #9

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    Quote Originally Posted by aokanlawon View Post
    Thank you. I have contacted safe collections and they are reviewing the contract. I did sign the agency opt out regulation for the initial contract but not subsequently for the extension. I am hoping this is okay. I have learnt my lessons and will not allow this to happen again.
    The actual question is did you sign the agency opt out at the appropriate time? Chances are you didn't - but either way you shouldn't be using Safe Collections now just spend the money and hit the courts.
    merely at clientco for the entertainment

  10. #10

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    Quote Originally Posted by aokanlawon View Post

    I did sign the agency opt out regulation for the initial contract but not subsequently for the extension.
    *WHEN* did they ask you to sing it / *WHEN* did you sign it?

    I have only had one agency insist I sign it BEFORE they told me who the end client was / arranged the interview. All the others were after interview... therefore, all invalid as you need to opt-out BEFORE introduction.

    M

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