Notice period fraud

Question

I have had a Limited company UK contract, with an Agency and worked at their end-client. After working for a few months, my role was suddenly terminated by the client (i.e. the end client, no reason given in writing). But she told (in writing ) that - they will be paying for the full notice.

It seems that - my agency signed me for 1 month (both way) on my contract but under the hood they seems to have signed 1/2 month with the client. And now agency is saying they are unable to pay for the difference as client’s only gonna pay for - what they want to pay— Since client is the supreme authority.

What can we do about it? Will I be able to dispute with the agency on hidden shorter notice period which wasn’t disclosed to me?

Cheers

Answer 1

Make sure you have everything documented - make sure you have documentary evidence of your notice period (your contract should suffice), and make sure you have documentary evidence of the agency refusing to honour the notice period.

Then open an Employment Tribunal claim against your agency - your loss of notice period should be covered under the "unfair deductions from pay" aspect of cases they cover.

Edit to add: from your comment about the small print, you say "but there's a small print that- if for whatever reason, client doesn't pay then they (the agency) won't pay"

This is almost certainly an unfair and unconscionable clause in your contract, and would almost certainly be viewed as such by any Employment Tribunal. The agency is your employer, they are the ones you hold a contract with, and they must pay you your wages regardless of whether their client pays them. The only way they could avoid this is by declaring bankruptcy.

Answer 2

I presume the contractual chain is: client -> agency -> your company -> you.

If so, what your company is entitled to is entirely spelled out in its contract with the agency. What the agency is entitled to is entirely spelled out in their contract with the client and, in general, is none of your business. What you are entitled to is a matter between you and your company.

However, a rather critical point raised in your comment is "if for whatever reason, client doesn't pay then they (the agency) won't pay". If that is in your company's contract with the agency then, then if they don't get paid, your company doesn't get paid. This is called a "pay-if-paid" clause and in generally legal under English law.

Unless your company is working in the construction industry. The Construction Act prohibits "pay-if-paid/pay-when-paid" clauses and they are treated as void. If the work you did falls within the scope of this act then the agency has to pay you the month regardless of if they get paid.

If you were working directly for the agency then you would be their employee and employment law would apply. This would not allow a "pay-if-paid" clause. You could possibly argue that the interposition of your company was a "sham" arrangement and that both parties knew that the real arrangement was between the agency and you but starting a case by saying you deliberately broke the law is a risky move.