Employer hates paying me (or anyone)!!

[mixalis]

I've worked on a self-employed basis for a company for the last nine months. We have nothing in writing, just a "gentleman's" verbal agreement over my pay. I charge per hour for my services, and invoice once a month. This company is well-established, has plenty of money, and has a regular monthly payroll for it's salaried staff, who are all paid on time. I work at their offices two or three times a week. The total days taken to settle my first five invoices was 347 (average time to pay 70 days), and my invoices for the last four months remain unsettled to date. I've recently told this client in writing that I no longer wish to work for him, citing his poor payment record (amongst other things). His response to that was to ask me if he should read my communication as "my 4 weeks notice". I pointed out that we had no agreement covering notice, but that I would be prepared to continue for a short while, perhaps until he found a replacement - PROVIDED that he confirmed settlement of my account would be made forthwith. This he did, yet (no surprise) he has still failed to settle as promised. My inclination now is to just pull out altogether, send him a final account for settlement within 7 days, and file a claim if it's not paid. However, this client is the sort that will do anything to avoid paying (and I think even more so now he knows I'm going). Although I agreed to help for a while (time unspecified) after giving him my "notice", given that he has still failed to settle I consider myself to be under no obligation at all to him, and free to withdraw at any time, though I'm sure he'll try to manufacture some argument around this to avoid paying, should I just refuse to work anymore. I of course regret having allowed him to run up this debt with me, a bad mistake on my part that I won't repeat in a hurry. I've been rather lulled into a false sense of security (always at the back of my mind is the fact that he can pay and it won't become a bad debt), as if it ever came to legal action the court would find in my favour. Any comments or advice on my position please?

[teaboy2]

Re: Employer hates paying me (or anyone)!!

Its pretty clear he is reluctant to pay you - Your best course of action for an amount under £750 would be to issue a final demand for payment giving him 7 days, including a warning that if the account is not settled within the 7 days, you may commence proceedings to collect all monies owed. Then if he fails to pay send a "letter before action" (formal title) giving a further 7 days to pay, making it clear this time that you will issue court proceedings if he continues to fail to pay.

Sending both letters and not just the letter before action, would show that you had given them plenty of time in which to pay. Am sure a reputable company would not wish to be dragged into court

If however the amount is over £750 pounds then send the first letter with the warning you may issue bankruptcy proceedings against them if they continue to fail pay. Then if they not pay it still, send them a Satutory Demand (which is the first step to petitioning bankruptcy against them) they would then have to either pay of the debt owed to you, or have the Demand set aside, and i doubt they have a good argument to have it set aside, after all you did the work for them, so they have no excuse for not paying you - Plus you have (i assume) historic records of accounts showing their poor payment history.

P.s. you have provided a service as a third party self employed trader, then basically you more likely have a verbal sales of goods and services contract with them not an employment contract of any form. I assume your operating as a sole trader when you say your self employed?

[pfloyd]

Re: Employer hates paying me (or anyone)!!

i doubt they have a good argument to have it set aside

What if it's a limited company? that would be a pretty decent argument for starters!

[teaboy2]

Re: Employer hates paying me (or anyone)!!

You can still petition the company for bankruptcy, as its the company that owes the money. So your not petitioning a person for bankruptcy but the company itself which is a legal entity in its own right.

Legal Term is winding up (Company) Petition - Sorry for any confusion

Mixalis

This Guide on Business link will give you some help on what you need to do and prepare for etc - Compulsory liquidations | Business Link
Here is a full break down of the complete process you will need to follow including taking it to court - Compulsory liquidation for companies and limited liability partnerships: the process | Business Link

[mixalis]

Re: Employer hates paying me (or anyone)!!

That's excellent advice, thanks very much, just what I was looking for. I've had a couple of bad debts in the past that I'd written off as clients simply weren't able to pay (guess I took the easy option by convincing myself it wasn't worth pursuing someone who couldn't pay anyway), but this is a bit different. The figure is about £2k, and I'm not going to let that go simply because I'm dealing with someone who'll do anything to avoid paying if he can, and will make things as difficult as possible for me (probably in the hope that when I've gone I'll eventually get tired of the brush-offs, and it'll just all go away eventually). One of the hazards of self-employment I guess, but I'm told that I am too soft with people! I really am reluctant to do any more for him and further increase my exposure, as I'm of the mind that he's now just trying to get as much out of me for as little as possible, given that he knows I'm not around for much longer. Luckily I've already got another client to replace him. Yes, I operate under my Business Name as a sole trader, and therefore always consider myself to be a sub-contractor or supplier. But the majority of my work (consultancy) for clients is on an on-going basis, and I think it might be wise to investigate my actual "employment status" attained on this basis. I think if you work as a sub-contractor or supplier on a regular on-going basis, as I have for years with some, there may be some specific differences to consider in this respect? I've always secured my work by word of mouth and recommendation, and as such have always felt that a handshake and a "gentleman's agreement" should suffice. But this always tend to happen before you really get to know the person/company properly!! Thanks again for all your advice, most useful to me. Kind Regards

[mixalis]

Re: Employer hates paying me (or anyone)!!

What if it's a limited company? that would be a pretty decent argument for starters!

Hope I'm doing this right and replying to the right person(!), I've only just joined this site. Well it is a long-established limited company (20 years+). They have no reason not to settle, have never disputed or queried my invoices, but just drag their heels (to say the least) when it comes to paying, even though it's a profitable business with plenty of money available. What are reasons for "setting aside", and what exactly does this mean?
Thanks, Regards

[teaboy2]

Re: Employer hates paying me (or anyone)!!

That's excellent advice, thanks very much, just what I was looking for. I've had a couple of bad debts in the past that I'd written off as clients simply weren't able to pay (guess I took the easy option by convincing myself it wasn't worth pursuing someone who couldn't pay anyway), but this is a bit different. The figure is about £2k, and I'm not going to let that go simply because I'm dealing with someone who'll do anything to avoid paying if he can, and will make things as difficult as possible for me (probably in the hope that when I've gone I'll eventually get tired of the brush-offs, and it'll just all go away eventually). One of the hazards of self-employment I guess, but I'm told that I am too soft with people! I really am reluctant to do any more for him and further increase my exposure, as I'm of the mind that he's now just trying to get as much out of me for as little as possible, given that he knows I'm not around for much longer. Luckily I've already got another client to replace him. Yes, I operate under my Business Name as a sole trader, and therefore always consider myself to be a sub-contractor or supplier. But the majority of my work (consultancy) for clients is on an on-going basis, and I think it might be wise to investigate my actual "employment status" attained on this basis. I think if you work as a sub-contractor or supplier on a regular on-going basis, as I have for years with some, there may be some specific differences to consider in this respect? I've always secured my work by word of mouth and recommendation, and as such have always felt that a handshake and a "gentleman's agreement" should suffice. But this always tend to happen before you really get to know the person/company properly!! Thanks again for all your advice, most useful to me. Kind Regards

In that case you are not under an employment contract, but a goods and services contract for each invoice, its bit like myself where each invoice i send is for goods under the Supply of Goods and Services Act 1982 - My own company is a Soler Trader/Proprietorship operating under a trading name (business name). So the invoices are for a service you provided, not for work under employment as a worker.

So i would personally press a head with enforcing the debt, as you said if you don't they are not likely to pay - but when you flex your muscles a bit and show your serious about enforcing the debt, they will have 2 choices pay up or goto court and risk a winding up petition or bankruptcy petition landing in their letter box.
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Hope I'm doing this right and replying to the right person(!), I've only just joined this site. Well it is a long-established limited company (20 years+). They have no reason not to settle, have never disputed or queried my invoices, but just drag their heels (to say the least) when it comes to paying, even though it's a profitable business with plenty of money available. What are reasons for "setting aside", and what exactly does this mean?
Thanks, Regards

Satutory demand route, follow the guidance i gave in post number 4 for how to deal with Limited Companies that owe money, its long winded but usually enought to get them to pay up just by sending the first demand as described in the guidance i linked to (see second link in post 4 for full details of the process to follow on a step by step basis)

Post here Legal Beagles Consumer Forum - View Single Post - Employer hates paying me (or anyone)!!

You can issue them the FORM 4.1 Satutory Demand which you would need to do before taking them to court and issuing a winding up petition - How do I wind up a company? | Business Link

[mixalis]

Re: Employer hates paying me (or anyone)!!

In that case you are not under an employment contract, but a goods and services contract for each invoice, its bit like myself where each invoice i send is for goods under the Supply of Goods and Services Act 1982 - My own company is a Soler Trader/Proprietorship operating under a trading name (business name). So the invoices are for a service you provided, not for work under employment as a worker.

So i would personally press a head with enforcing the debt, as you said if you don't they are not likely to pay - but when you flex your muscles a bit and show your serious about enforcing the debt, they will have 2 choices pay up or goto court and risk a winding up petition or bankruptcy petition landing in their letter box.
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Ignore the Satutory demand route as that does not apply to Limited companies, follow the guidance i gave in post number 4 for how to deal with Limited Companies that owe money, its long winded but usually enought to get them to pay up just by sending the first demand as described in the guidance i linked to (see second link in post 4 for full details of the process to follow on a step by step basis)

Post here Legal Beagles Consumer Forum - View Single Post - Employer hates paying me (or anyone)!!

Ah, that's perfect, many thanks again. I've waited long enough for payments from this client, so I'm not overly concerned about waiting a bit longer. More important that I follow the right protocol, in case it does happen to go "all the way". Thanks for the guidance, really helpful. I've noticed some "thanks left by" icons on the website, how do I leave this for you? Regards

[Caspar]

Re: Employer hates paying me (or anyone)!!

Bottom right of the reply there's a button that says thanks, click it!

[teaboy2]

Re: Employer hates paying me (or anyone)!!

Ah, that's perfect, many thanks again. I've waited long enough for payments from this client, so I'm not overly concerned about waiting a bit longer. More important that I follow the right protocol, in case it does happen to go "all the way". Thanks for the guidance, really helpful. I've noticed some "thanks left by" icons on the website, how do I leave this for you? Regards

I did some further checking after i made that post, and altered the post to show that you can still issue a FORM 4.1 Satutory Demand to a limited company. So that should follow any final demand you make, once you issue the Satutory demand, if they still fail to pay you can issue proceedings to enforce the debt in court. If they then still fail to pay you can seek a winding up order on them. Sorry for any confusion - and Thanks for the Thank you

[alsagerman]

Re: Employer hates paying me (or anyone)!!

And don't forget you are entitled to add interest to the outstanding debt. I also run a Ltd company and have had to pursue the odd debt myself. Sounds like your man is hoping you'll get fed-up and go away. Sometimes a business will take you all the way to the wire before handing over a cheque just before going to court. Be prepared for a wait.

There's plenty of free advice for you at the county court offices.