All contracts come to an end. Ideally, your client has been delighted with your work and would be prepared to prepare a testimonial telling your other potential clients how well you have performed.
However, clients are ‘human’ too, and they don’t always dot the ‘i’s and cross the ‘t’s. This sometimes results in you doing a week’s or a month’s work but not having a signed timesheet, sometimes for a reason as simple as your client taking the afternoon off on your last day.
So what happens when you are left with a timesheet unsigned, and you can’t claim your latest week’s or month’s fees? David Royden, Head of Employment Law at Laytons Solicitors, has some suggestions.
Start by being reasonable
“Contractors are not employees and therefore have a contract of service with their client, so as a business supplying a service, the legal solution is to sue for breach of contract,” explains Royden. “But, as with any dispute over a contract, it is advisable to talk first.”
Most clients have a chain of command, and Royden’s advice is to work your way up the management ‘food chain’ until you find an executive who can sign off on your timesheet.
If this fails, the next step is to contact the personnel department and explain that your project manager has not signed-off your last timesheet. An explanation about your status as a supplier will help when talking to the human resources team.
Ideally, you should have two client company contacts who are able to sign off on your work-related activities. If one leaves, or takes a hostile stance, then you have a fall-back.
Should you have no joy with company representatives then, according to Royden, the next step is a Letter Before Action.
“Most clients will pay-up when faced with a letter from a solicitor because they know you mean business,” says Royden. “But make sure you have exhausted all other options before taking this step.”
Most clients will pay-up when faced with a letter from a solicitor because they know you mean business.
David Roydon - Laytons Solicitors
If you think you may work with the same client again, then it is important to consider the ramifications of any legal action. Although if the client owes you a month’s pay, which for most contractors is several thousands of pounds, then the cost of a Letter Before Action, which Royden estimates at around £200, is a worthwhile investment.
How will agencies deal with no timesheets?
According to the Trades Union Congress (TUC), agency workers should be paid by their agency regardless of whether or not the client has paid. In reality, most agencies that employ contractors work on a ‘pay when paid’ basis. So, if the last timesheet is not signed and the agency does not get paid, then you won’t get paid.
However, Royden says that not being paid by a agency is the same as not being paid by a client: “Contractors supply their services to an agency on a business to business basis, the same as if they were supplying their services direct to a client.”
Contractors therefore have the right to sue their agency for breach of contract, assuming they have completed the project according to its deliverables, and regardless of whether or not a timesheet has been signed.
But if you think further work will come from the agency who refuses to pay, taking them to court may not be a good move.
Weighing up the options
If you have been working directly for a client or via an agency and there is no prospect of further work, and you are owed a significant amount of money, then legal action justifies itself.
Think carefully, though, about the bridges you may burn if you decide to start legal proceedings. Expert legal assistance from the beginning will ensure you mitigate potential losses and, if it gets that far, maximise your return.