Company Fails to Pay for Services.

Discussion in 'Finance, Property, Law' started by roninxix, Sep 6, 2012.

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  1. Recently I carried out a period of work for another company which works on a contract alongside the company I work for. This period of work was cleared through my management structure as the work was of a sensitive and operationally important nature. There was no temporary contract signed, just a mutual agreement between my company and the other. I basically prevented the company defaulting on their service level agreement because they failed to provide adequate leave cover.

    My question is twofold. Firstly, would I be entitled to be payed for this work I carried out and secondly if the company refused to pay me, what would my course of action be to secure recompense for my services?

    Any comments, sensible ones that is, will be greatly appreciated.
  2. Yes I am.
  3. First off, you should be advised to get a professional legal opinion blah blah blah liability blah blah but..given all that, here is my ha'penny's as someone in business:

    Try and get what you want without going to court. If you do have to rely on a contract to enforce your rights, it can get very expensive / messy very quickly, so potential costs and grief (not all of which are financial) should be carefully weighed up against what you might reasonably expect to get back if you succeed in "going after" (which could well be zilch).
    Also, it can be awkward if you currently / in the future tender for a contract involving someone / some company you sued.

    The answers to your questions depend on several factors including Drivers_log's points and not forgetting where the work was carried out and under what jurisdiction (country) the contract (if any) is covered legally.
    The two can be different, so e.g., you can carry out a contract in Iraq but the contract could termed so as to be covered by English law. If this work was carried out under a foreign law contract then I've no idea where you stand. If this work was covered under an English law contract then it's likely to be a bit easier to understand your options. A contract doesn't have to be written down to be “legitimate”, it can be verbal or just "implied" depending on the cirumstances. But it's always easier to enforce a contract if it is clear, on paper and signed by both parties etc.

    It's very iffy carrying out any kind of work for anyone until you are sure of the substance of the contract & terms which will cover the work. Stuff like: who is the work for? What is the work? Who can sign it off as acceptable? Who is paying for the work? Who gets paid? What will be the rate for the work? Who is liable for any defect and to what extent? What guarantees are provided ?etc etc.

    From your description, it appears that there was some kind of agreement made between your company and the other organisation concerning the supply of your services – can you find out the exact details of this agreement? There was likely some kind of conversation with you about this – maybe it seemed quite innocuous at the time. It's really key to knowing what you might be due. The agreement probably covered, though maybe not explicitly, how the work was to be paid for, how much it was going to cost, and who would be liable should anything go wrong. This last point is key.
    If the shit hit, would the other organisation (or any other party involved) have come after you for compensation? If so, you are or should have been a party to this agreement, as you will have needed to ensure you had the insurance etc in place to cover your arse. If you carried out the work as an agent/servant of your company and were covered under their insurance/bona fides for this work, then I'd say your company is your first port of call for compensation, in line with whatever the existing agreement is you have with them (whether as an employee or contractor or whatever) for your services - that could form an "implied" contract for this new work, where you had reasonable grounds for expecting your existing terms would also apply to the new situation.

    If this new situation was not covered by your contract with your company, then you are in a grey area. If your company says you didn't do this work on their behalf, and that nothing was agreed with you concerning the work/cost/payment, and they refuse to deal, it could be reasonable for you to bill the other company at, say, a similar rate to that previously charged for your self employed service rate to your company plus any necessary expenses incurred.

    So, all that shit really means:

    1 Be clear about the details of what are you are claiming - what are you due, who agreed what with whom and when etc. If you can't get some clear information about what was agreed and what you should be getting, it is probably not worth pursuing.
    2 If you have to sue to get your money the relationship with your company / the other company has gone (or will have when you get legal) and you are best off elsewhere. Will you have to/can you afford to move on? (assuming you've not already).
    3 Can you really be arsed to sue given the grief you will endure? If it's international, it has to be worth really big mula to be worth it. Even if it's English law and small beer, you might do better writing it off to experience and being more careful next time. If you really are still up for legal, for small beer go through the Small Claims procedure. Big amounts/international, get some professional advice - if you have deeeep pockets.