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Contractor Doctor: Can my agency refuse to pay an approved and signed timesheet?

Dear Contractor Doctor,

I am an IT contractor and I have been working for a client via an agency. The agency has ended my contract early and is refusing to pay me for the last four weeks, despite me having my timesheet signed and approved by my client, saying that I did not meet the contract deliverables and the quality of my work was poor.

I also complained to the agency that the client project manager has been treating me badly, by shouting, changing deadlines and calling me outside of office hours, but my agency has done nothing to support me.

Can the agency refuse to pay me, even though I have a signed timesheet from my client?

Thanks

[Name withheld to ensure confidentiality]

Contractor Doctor says:

Unless there are specific provisions in the contract, which would be unusual, then the agency should not be able to legitimately withhold payment to a contractor once they have been presented with a timesheet approved by the client, according to contractor legal expert Roger Sinclair of Egos.

“A signed and approved contractor timesheet will generally signify the client’s acceptance of the time worked by the contractor,” explains Sinclair. “In the absence of any qualifying note made on it, the approved timesheet would also generally constitute evidence that the client was satisfied that the contractor had completed the work covered by it according to the contract.”

Quality may not even be relevant, says Sinclair, if the contract specifies pay on a simple time basis: “If the client was dissatisfied with the contractor’s work, why did they not note their dissatisfaction on the timesheet? It may be that in this case the client is simply being difficult with the agency, but this should not necessarily prevent the contractor from being paid.”

Conduct of Employment Regulations

“If the contractor has not opted out of the Conduct of Employment Regulations, then regulation 12 applies,” continues Sinclair, “and the agency can’t withhold payment if they have not been paid by the client.”

In fact, Sinclair adds, even if the contractor has opted out, unless there are specific provisions in the contract between the agency and the contractor about the timing of payments, the agency would not generally be entitled to withhold payment if the contractor has a signed and approved timesheet.

Legal action

“If the client has signed the timesheet and accepted the work, then it’s pretty clear that the agency is obliged to pay the contractor,” explains Sinclair. “If the agency refuses, then the contractor should send a firm letter reminding the agency of their obligation to pay and that the contractor will take legal action if the agency does not.”

Sinclair suggests that in this scenario, the contractor would be wise to take legal advice to confirm that there are no unusual provisions in the agency-contractor contract that might prevent payment, and then consider taking legal action to recover the unpaid fees.

And if the contractor did not opt out of the Conduct Regulations, then they can also complain formally to the Department of Business, Innovation and Skills (BIS) about the agency’s behaviour.

If the client has signed the timesheet and accepted the work, then it's pretty clear that the agency is obliged to pay the contractor

Roger Sinclair, Egos

‘Unlawful harassment’

“The client project manager’s behaviour described by the contractor could simply be interpreted as a particularly aggressive management style,” says Sinclair. “However, there comes a point when an aggressive management style could cross the line and become bullying and unlawful harassment, which not only gives rise to civil liability, but can also amount to a criminal offence.”

The contractor’s options are to take legal advice as to whether the harassment is unwarranted, or simply to move on from the contract. If the client project manger is behaviour becomes threatening, then the contractor’s ultimate sanction is to make a report to the Police.

Good luck with your contracting!

Contractor Doctor

Published: 24 September 2009

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