Agency Must now Pay Up signed Timesheet or not

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Signed Timesheet for work done
Signed Timesheet for work done by contractor

John Antell considers the implications of The
Conduct of Employment Agencies and Employment Businesses Regulations 2003

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Do Contractors need a signed timesheet to get payment?

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 apply to most IT and engineering contractors contracting via an agency.

Limited company contractors can opt out. However, it is unlawful for the agency to make assignments conditional upon a limited company contractor agreeing to opt out.

Formerly it has been usual for the contract between a contractor and an agency to provide that payment for work carried out is not due unless the contractor supplies a timesheet signed by the client.

Contractor Weekly Timesheets
Contractor Weekly Timesheets for getting paid

The use of a timesheet is a convenient means of showing that the work has been carried out. That’s given that most agencies have little or no involvement with the work once a contract has been signed.

Signed Timesheet Can Cause Problems

However making payment conditional on a signed timesheet can cause problems for the contractor if there is a dispute as to whether work has been done properly or at all. If the dispute cannot be resolved and the contractor is considering legal action, the contractor may be placed in a Catch-22 situation.

The contractor generally cannot sue the client for failing to sign the timesheet, That’s because there is no contract between contractor and client.

Suing the Agency

If the contractor sues the agency, the agency will raise the defence that irrespective of whether the work was actually carried out or not, no money is due under the contract unless a signed timesheet is produced.

It might be possible in some circumstances for the contractor to argue that there is an ‘implied term’ in the contract with the agency that that agency will not withhold payment if the client unreasonably refuses to sign the timesheet but there can be no certainty, in any individual case, that the judge, when the matter comes to court, would hold that such a term was implied.

Regulation 12 – Timesheet

Timesheet Dilemma
Timesheet Dilemma for contractor

now prohibits the agency from withholding payment because a timesheet is not signed.

It does not prohibit the use of time sheets. So, if a signed timesheet is not produced the agency is probably entitled to delay payment for a short time whilst enquiries are made to ascertain whether the work was carried out. However, crucially, it does prevent the agency making a signed timesheet an absolute pre-condition for payment. This avoids the Catch-22 situation we describe.

John Antell

John Antell is a barrister specialising in contractual disputes. That’s particularly those involving IT, engineering or constructio. Also, in employment law. Barristers must normally be instructed through a solicitor but chartered engineers,
Members of the Institution of Electrical
Engineers
(whether chartered or not) and some other professionals can contact barristers directly for advice.

Neither the author nor the publisher can be held responsible for any actions undertaken as a result of the opinions expressed in this article. They are necessarily of a general nature and cannot be a substitute for individual legal advice on your particular situation.

© John Antell

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