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Self Employed IT Contractor – Recruitment Agency Withholding Payment

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    Self Employed IT Contractor – Recruitment Agency Withholding Payment

    The recruitment agency (xyz) I had a contract to work for a client is withholding the payment.

    The client ended the contract stating that they are not happy with my performance and paid for the all work done plus one week additional for the notice period.

    The recruitment agency saying they shall deduct from my payment because I breached the contract by not performing to the required standard and they incurred losses. In accordance with clause 3(f) and 10 of the contract, XZY shall deduct this sum from outstanding invoices.

    Please advise on how to respond to the agency claim.


    PS: I have extracted section 3(f) and 10 from the contract and shown below.

    3 (f) Whenever under this Contract or otherwise arising from the relationship between XYZ and the Consultant Company any sum of money shall be recoverable from or payable by the Consultant Company, the same may be deducted from any sum then due, or which thereafter may become due, to the Consultant Company under this Contract, or any other contract between XYZ and the Consultant Company (or any of its affiliates).

    10 Indemnity
    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.

    #2
    What losses have they incurred? And how much are we talking about here? Are they simply not paying you the 5 days notice or what?
    Down with racism. Long live miscegenation!

    Comment


      #3
      Well that's obvious. They had a contract too supply a resource and be paid for a set period. If the resource lost the contract the agency have lost their expected fees for the intended length of the gig through no fault of their own, so of course they will try and recover them.
      Blog? What blog...?

      Comment


        #4
        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...
        Last edited by northernladuk; 23 October 2018, 20:14.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Originally posted by NotAllThere View Post
          What losses have they incurred? And how much are we talking about here? Are they simply not paying you the 5 days notice or what?
          Agency have not mentioned what exact losses. They have mentioned the following in the letter.

          The reason agency (XYZ) was unable to continue its contract with the Client (ABC) was due to the services not being performed by the Consultant Company (myself) to the required standard.

          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.

          Comment


            #6
            Originally posted by northernladuk View Post
            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 ended the contract because they thought I was not performing well and it is one week notice period from both parties. Instead of working for one week, the client said they will pay for the all days worked + one week notice period wages.

            I did not breach any contract. I carried out my work as per the requirements and as asked.

            The Agency is not holding all the wages. They are claiming for £5k + vat which I believe is unfair.

            Comment


              #7
              Originally posted by malvolio View Post
              Well that's obvious. They had a contract too supply a resource and be paid for a set period. If the resource lost the contract the agency have lost their expected fees for the intended length of the gig through no fault of their own, so of course they will try and recover them.
              That is nature of contracting. Either parties can end the contract anytime. Their is no protection for contractors especially.

              What would the Agency have done in case the client ended the contract in-between stating that the project is on hold so we don't need any contractor for this project and just giving extra 1 week wages for the notice period. In this case I would have lost estimated 6 months of wages and I cannot claim through the Agency or the Client for the loss of remaining term.

              - They cannot claim stating that I did not carry out as per the required standard when their is no Defined Standard or Metrics for carrying out work. -
              - When the Client is happy to pay the full wages plus one week notice period wages, the Agency should not be holding that payment.

              Comment


                #8
                Originally posted by xtonehari View Post
                The client ended the contract because they thought I was not performing well and it is one week notice period from both parties. Instead of working for one week, the client said they will pay for the all days worked + one week notice period wages.

                I did not breach any contract. I carried out my work as per the requirements and as asked.

                The Agency is not holding all the wages. They are claiming for £5k + vat which I believe is unfair.
                In which case it is. Notice has been paid as per the terms of the contract so they have lost nothing. Twats.

                Keep 'dunning' them. Read up on the late payment of commercial debts act and include this in you letters. Don't threaten them by suing them or anything daft. Just keep reiterating the terms of the contract have been adhered to and you want payment. Past x date you'll start charging interest as per the act.

                Send them that enough times as you think necessary and then go to a solicitor and get them to draft you a letter along the same lines. Costs a few 10s of pounds. If the fact that you know about the late payments act isn't enough to take notice then the solicitors letter will.
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #9
                  Hand on heart, have you delivered to the best of your ability? Is performance the real reason?

                  If not, have a chat to the client and ask them to tell the agency they got the reason wrong and that it's the budget has been pulled for your team and it's no fault of the contractor.
                  The greatest trick the devil ever pulled was convincing the world that he didn't exist

                  Comment


                    #10
                    The client might cite performance, but the real reason could be anything - e.g. your skirt wasn't short enough, or they didn't like you turning up in the carpark in a Bentley, or budget... From what I read here, the agency hasn't a leg to stand on. Even if they did, they can't just summarily decide they'll keep £5K back without itemising their losses exactly.

                    Do as NLUK says. Eventually it might go to court, but so long as you give them time to pay and behave sensibly, you'll probably win. I am not a lawyer.

                    Also - it's not wages, it's fees. And if you're working through a brolly or your own limited company, you're not self-employed.
                    Down with racism. Long live miscegenation!

                    Comment

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