Big Corporate vs contractor

[Neo1]

Apologies first for posting this in the general welcome section as this is where the 'how to start a new thread' advises one to do so.

 

I am a freelancer in the pharmaceutical industry contracting through an agency to a multinational company. My contract is reviewed every 6 months. Last November 2012 (just before its renewal in Dec) the multinational company approached me and wanted to transfer me from an hourly rate to a daily rate. As I was used to working long hours I figured that they had considered the rates and thought it best for them that I went onto a daily rate. They suggested a daily rate which I agreed and confirmed in an email to my linemanager. 6 months later (last week) I learnt that my previous 3 invoices (Feb, Mar & Apr) had not been paid and that the multinational company were in dispute with my agency with the rate that was being charged. Despite the fact that the first 2 invoices ie Dec 12 and Jan 13 had been paid with the new agreed rates the multinational company was now stating that 'there was an error' in the calculation of this new rate. They claim that the rate that I was provided with in Nov 12 included both the agency fees and VAT. This was never the case. The multinational company now wants to retrospectively re calculate and for me to re issue all invoices at a lower daily rate. My argument is that the work has already been done under the agreed rates and invoices issued- therefore these should be honoured. Please advise.

[maroondevo52]

Hi,

 

I've moved this thread to the employment forum.

 

Regards,

 

Scott.

[Emmzzi]

I am confused about why you are agreeing rates with the company if it is the agency who employs you. Can you explain?

[Neo1]

Yes I too was suprised when my line manager first started cosulting with me directly about my rates (back in June 2012). This was a definate change to what had occurred during the previous 18 months of the rolling contract. Previously discussions would take place between my agency and HR dept of the client. This was the second time my linemanager had consulted with me. On confirmation of the new rates the client was to notify my agency (which apparently they failed to do in a timely manner).

[Emmzzi]

So who has what information in writing? And what advice does your agency give?

[stivis]

The Agency is liable for the invoices submitted ,that's who previously paid you ........Is that correct?

The Agency gets a percentage of the invoices,over and above the invoiced value ,.............Is that correct?

and a percentage of your signing on fee

HOWEVER the Agency will be arguing that they only act as a "paymaster" therefore are not liable

It's clear to me that the company don't want to pay any increase,and especially the Agency fees or costs.

and are telling the Agency that.

In part the company want the Agency in whatever form to underwrite the costs within the invoices ( the vat at the requisite rate and Agency fees)

What you need to look at the agreement between the Agency and yourself ,together with any variations,that would include ANY direct agreements with the company,if any do exist

I would say that any agreement between the Agency and the company don't concern you Unless you are a signatory within that agreement.

 

 

Without considering anything else the company are looking at a 30% reduction in costs

 

However (again)

On confirmation of the new rates the client was to notify my agency (which apparently they failed to do in a timely manner).

with that, I'd think that no agreement now exists between the Agency and the company,if that is the case then I would say again the Agency has the liability

You need some kind of confirmation that you followed the Agency instructions in regard to employment

 

It's probably not the best news but you can sort it all out

[Neo1]

Thanks for the responses so far.

The agency does pay me and receives a % from the client. My contract is with the agency- but once the client starts negotiating with the service provider (me) and verbally accepts a new rate (which was confirmed in writing by the service provider- does this not over ride any other agreement? The fact that the first 2 invoices were paid does this not mean that the new rate was accepted by the client and therefore active?

[stinkysrevenge]

Aside from the fact that the client should defjnitely not be speaking to you directly concerning about rate changes, were you in contact with your agency to let them know the new rate? Do you have a contract in place with your agency that specifies your new rate?

[stivis]

but once the client starts negotiating with the service provider (me) and verbally accepts a new rate (which was confirmed in writing by the service provider- does this not over ride any other agreement?

Until all the paperwork is in place and signed then no ,but if you write and confirm the acceptance then that shows only your acceptance of the terms they have put forward ,the terms are I believe " an acceptance of that offer which results in a meeting of the minds"With that in mind ,irrespective of the rest .....You have an agreement

I would have be happier if a contract for the period was in existence, Effectively a contract is a signed document formalising an agreement the terms of which that you are both satisfied with, all terms of the contract would be on that document(I'd say the Four Corner rule will apply)

The other agreement would terminate at the end of the six month period, unless there is within that document an extension clause,there will be some wording to cover such eventualities

 

The fact that the first 2 invoices were paid does this not mean that the new rate was accepted by the client and therefore active?

Maybe Yes maybe No, BUT the fact that they paid sets a precedent (that is close enough as I can't think of the phrase to describe the previous action in paying the invoices)

If the two are coupled together ,throw in the legalese(case law or common law) and that should sort it

[Neo1]

No I do not have a contract with my agency that specifies new rate. So is that what it boils down to?

[Neo1]

I was under the impression that a verbal contract is sufficient.

[Emmzzi]

Your contract is with your agency. That makes any side deals you have agreed verbally null and void.

 

So either

a) you go with what the agency says or

b) the company pays a finders fee to the agency and employs you directly

c) you find a new job

 

You never negotiate directly as you can never be totally sure what the fees are on top of your pay.

[Emmzzi]

Thanks for the responses so far.

The agency does pay me and receives a % from the client. My contract is with the agency- but once the client starts negotiating with the service provider (me) and verbally accepts a new rate (which was confirmed in writing by the service provider- does this not over ride any other agreement? The fact that the first 2 invoices were paid does this not mean that the new rate was accepted by the client and therefore active?

 

 

Did you agree a mark up on the rate that was satisfactory to the agency and get their agreement in writing? Otherwise.. no, not good enough!

[stivis]

That makes any side deals you have agreed verbally null and void.

Agree, unless they are documented within the "Four Corners" of the first agreement (Unless your RFC)

 

**"Four Corners"

**he document itself; the face of a written instrument. The term is ordinarily included in the phrase within the four corners of the document, which denotes that in ascertaining the legal significance and consequences of the document, the parties and the court can only examine its language and all matters encompassed within it. Extraneous information concerning the document that does not appear in it—within its four corners—cannot be evaluated.

 

 

The mark up is agreed between the Agency and the Company ,Neo1 would and can be excluded from this agreement ,and with the greatest respect it is not his concern.

Someone said Neo1 shouldn't be talking to the company discussing his rates, I have to disagree ....because the Agency/company agreement is for the plus percentage

That being said the Agency are being a bit lax in their input(that's nice speak for being lazy Richard the Thirds)

the agreements are

1)Neo1 and the Agency..........consist of a rate......who need to know details ......only the two parties,BUT that rate is to be passed on to the company

 

2)Agency and the company.........consist of a percentage figure rate over the above......who need to know details .......only the two parties,

3)Neo1 and the company........consist of a rate discussion over the above(this is where the Agency is lax,for their fees that should be doing it.not Neo1)......who need to know details ...All

 

 

You never negotiate directly as you can never be totally sure what the fees are on top of your pay.

Disagree as I say the fees are not his concern,

Negotiations? Both the company and Neo1 were just trying to expedite matters,but it really should have been down to the Agency and at the very minimum they should have sat in on the negotiations

[steampowered]

From a practical perspective, this sounds contentious. It is probably much better to let your agency have a disagreement with the company rather than involving yourself in the argument.

 

In any event, as others have advised, if the contract is between the company and the agency you probably did not have authority to negotiate your rate on behalf of the agency.

[stivis]

If you read post #6 .I would think I specified where the liability for the invoices lay

 

In any event, as others have advised, if the contract is between the company and the agency you probably did not have authority to negotiate your rate on behalf of the agency.

 

In #14 I clear up both the agreements and the negotiation of rates,all be it in the very simplest of terms

[Emmzzi]

From a practical perspective, this sounds contentious. It is probably much better to let your agency have a disagreement with the company rather than involving yourself in the argument.

 

In any event, as others have advised, if the contract is between the company and the agency you probably did not have authority to negotiate your rate on behalf of the agency.

 

Exactly right. There's no contract between you and the company, only you and the agency.

[stivis]

With respect , have any of you actually dealt with the pharmaceutical industry and contracting?

Middle and upper management are quite incompetent

Negotiations? Both the company and Neo1 were just trying to expedite matters,but it really should have been down to the Agency and at the very minimum they should have sat in on the negotiations

 

As I appear to be ignored or dismissed then it is probably best I go

[Emmzzi]

I've got qualifications in both contract and employment law, and deal with both on a regular basis, yes. But I prefer posters to make up their own minds who to place their trust in, as we could all be anyone on the internet, so there's no point waving your bits of paper and life history about I've been known to be fallible, see my signature.

 

The fact it is pharmaceutical is irrelevant and basic contract law applies.

[steampowered]

I've dealt with more than my share of the fallout from incompetent organisations. There are a surprising number of multi-million pound disputes which could easily have been avoided if organisations maintained clear lines of management responsibility and open lines of communication with their contractors. This must be incredibly frustrating for you.

 

The major problem you face is that, I assume, as a contractor you can be terminated on very short notice. It is always tempting to be bullish in trying to enforce your legal rights but you would not be the first person to be terminated for raising an entirely legitimate complaint. This is why I suggested doing it through the agency - obviously you are the only one here in a position to judge whether this is practical, but ultimately they would normally be best placed to do this, and this route would be less likely to affect your ongoing employment.

Edited May 30, 2013 by steampowered

[Neo1]

I've dealt with more than my share of the fallout from incompetent organisations. There are a surprising number of multi-million pound disputes which could easily have been avoided if organisations maintained clear lines of management responsibility and open lines of communication with their contractors. This must be incredibly frustrating for you.

 

The major problem you face is that, I assume, as a contractor you can be terminated on very short notice. It is always tempting to be bullish in trying to enforce your legal rights but you would not be the first person to be terminated for raising an entirely legitimate complaint. This is why I suggested doing it through the agency - obviously you are the only one here in a position to judge whether this is practical, but ultimately they would normally be best placed to do this, and this route would be less likely to affect your ongoing employment.

 

I have been with this particular company for the past 2yrs and the project that I am working on will be ending in August. My contract is to be extended in June for 2-3 months to assist in closing. Due to these recent developments I doubt v much that I will extend my contract.

[Neo1]

Hi all

Thanks for all the advice/ comments received. Just to update you all the corporate company ended up paying the outstanding invoices in full. It was then agreed that I would continue at the revised rate for June and July but the August payment would be at the higher rate. I received full payments for June and July. My contract completed at the end of August but to date I have not been paid my August costs plus my expenses (which date back to last year). In total I am owed nearly £30K. My question now is what action to take? The agency which I have the agreement with and whom i address my invoices to say that they cannot pay me until the corporate company pays them. They say that they are chasing and that is all they can do. I would welcome any advice to expedite matters. Thank you.

[steampowered]

You could threaten to sue with a LBA. You would need to be completely sure who is responsible for the invoice - do you have a contract with the agency? If so, what does it say?