Are these payment terms legal in the UK

[BJacques]

Hello everybody,

I have a question about contracting with a UK based agency to work for a final customer based in France.

I am also based in France and I am very surprised byt the proposed payment terms :

This invoice will be paid in full by electronic transfer to the consultant’s company account within 3 days of
receipt by XXXX Resources (the agency) of payment from the end client.

In France, the trade regulation prohibits payment terms above 60 days from invoice date, and I think that an invoice issued in France has to follow french trade regulation (payments terms and late payment penalty rate has to be printed on the invoice).

So, my question is :
- are these payments terms legal in the UK ?
- is these payment terms very common in the UK ?

Many thanks for your thoughts about that

B.JACQUES

[SueEllen]

In the UK it's up to you to negotiate with a company you are supplying goods and/or services to for better payment terms. So it's not rare to find large organisations i.e. well known supermarkets and government agencies paying their suppliers on 90 day terms.

Commonly people negotiate with agencies for weekly or monthly payment terms with the invoice being settled within 7-14 calendar days. This is due to the agency skimming anything from 7% upwards (normally around 15%) as a margin for their services.

I personally would never let an agency pay me when they receive payment from the end-client as I expect them to have enough money to pay my company regardless of whether they have been paid first. However if the end-client starts mucking them around with payments I'm very happy to agree not to provide services to that client.

[northernladuk]

Why does everyone assume something they see and don't like/understand on a contract is illegal??

[BJacques]

Why does everyone assume something they see and don't like/understand on a contract is illegal??

Thank you SueEllen.

For northernladuk,
I was just looking for information about UK rules to know how to negociate the contract. If the agency was a french one, I would accept the contract with such payment terms as it is not legal by french trade law (not more than 60 days in France), and for this reason the clause is considered as non existant. In this case the default payment terms of 0 days is applicable.

This is applicable for any contract or invoice issued in France, in the UK it is different, good to know !

[Wanderer]

This invoice will be paid in full by electronic transfer to the consultant’s company account within 3 days of
receipt by XXXX Resources (the agency) of payment from the end client.

So, my question is :
- are these payments terms legal in the UK ?
- is these payment terms very common in the UK ?

Bonjour!

By UK, I presume that your contract is formed under "English law". Legally, there is no "UK law", it will either be England/Wales OR Scottish law. Most likely it's English law.

The answer to your first question is No, these payment terms are NOT legal in a contract with an employment agency formed under English law. The practice is specifically prohibited by Regulation 12 of The Conduct of Employment Agencies and Employment Businesses Regulations 2003.

There is a possibility to sign away your legal rights under this regulation and it is very likely that they agency has tried to trick or coerce you into doing this. It is commonly known as an "opt out" of the above regulations and agencies try to force people to agree to it.

Sometimes agencies may refuse to do business with people who won't opt out, even though they are specifically prohibited from doing this by law.

If you have been tricked or coerced into signing the "opt out" declaration then you can still withdraw it (in writing) at any time before you start work. If you have not signed the opt out then the contract is unenforceable and in the absence of any written payment terms, the terms will be presumed to be 30 days from the date of the invoice. If they don't pay within 30 days then you can add a penalty and statutory interest.

However, the best way to deal with this situation is to go back to the agency and tell them that you aren't a stupid foreigner and you will take payment terms of 7 days and it's up to them to deal with getting payment from the client, not your problem.

Typically, contracts will be 7 to 30 day payment terms. If it's 30 day terms then I would invoice weekly rather than monthly.

You may have figured out by now that some agents are nasty people, if they are doing business with someone they think is naive
then they will try to rob them. You really have to stand up to them and fight.

Bonne chance!

[d000hg]

Why does everyone assume something they see and don't like/understand on a contract is illegal??

Maybe try reading his post before engaging "noob attack mode"?

[BJacques]

Many thanks to all, and especially to Wanderer, very clear explanation !