Contractor not paid subcontractor

juejue7214

Free Member
Nov 13, 2024
12
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Hi all, newbie here looking to drawing on your wisdom 🙏
My other half has been working as a subbie for a large contractor most of this year in between other works. They were great at first, he did the work, it was signed off and invoices paid after 30 days, then they would call him and say we have another job, tell him what’s involved and he would give them a price, they’d say fine, it needs to be done by x date and so on.

Now a problem has happened and they haven’t paid for several jobs, they owe around £15k for 5 invoices and work is near completion on another £10k job. There was no problem with the quality of my workmanship and they are not disputing it or asking for any rectification works, it just got to the 30 days and they didn’t pay, left it a few days and then asked when it was being paid and was told oh it will be paid in a few days - let me look into it etc.

They haven’t given a pay less notice and now some of the invoices are 30 days late. I emailed on my OH behalf and they have said the invoices are under review as they believe them to be too high for their margins. However they are at the agreed price. They have asked for a meeting where I believe they are going to apply pressure to reduce the prices, they know he has a small business and struggling with cash flow as he into them for nearly £25k so getting desperate. My OH has paid his lads and some suppliers but owes HMRC and other suppliers so we need the money quick and fear we haven’t got time to pursue them through courts, which I think they know and that’s why they will apply pressure for him to reduce invoices for fast payment. We have told them until they pay we cannot work for them as need to work where we will get paid but am worried they will use it against him if he doesn’t work on the current job and complete by deadline but I also know at the end of the job they will do the same with that invoice so feeling trapped between rock and hard place, any advice?
 

fisicx

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Sep 12, 2006
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I suspect your other half will never see the money. They aren't paying because they don't have the cash or are about to make the company insolvent.

Tell your other half to down tools and stop work until the outstanding invoices are paid.
 
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Newchodge

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    He is working for free, in fact he is paying to do their work as he has paid his own bills for the jobs. He MUST STOP, preferably before the current job is complete. He has no other leverage.
     
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    fisicx

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    Doesn't change the fact that they have no intention of paying.

    Stop work. Secure the site and go home.
     
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    Newchodge

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    They are a large well known company, am pretty sure it’s just greed trying to increase their margins
    It doesn't matter why they have not paid. Stop working and start legal proceedings for all invoices that are overdue.

    If they want a meeting, meet with them and refuse point blank to accept anything less than the agreed price. Tell them you need immediate payment of the most overdue invoices and a certain date for payment of the others. If they try to negotiate on the price just keep repeating that the price was agreed and unless it is paid NOW he will commence legal action. Don't discuss anything to do with the agreed price - they will be looking for ways to get him to make concessions. Forget how much you need the money, or you will be shafted.
     
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    ChrisCallaghan

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    Hi @juejue7214

    I agree with @fisicx and @Newchodge - your OH is essentially working for free at this point. It may now be time to consider beginning your own collection action in the hope of recovering what you can. The following link may be helpful:


    When it comes to dealing with HMRC and other suppliers for you OH's business, may I ask if he runs his business as sole trader or through a limited (Ltd) company? What sort of amounts are we talking about?
     
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    juejue7214

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    Nov 13, 2024
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    He is working for free, in fact he is paying to do their work as he has paid his own bills for the jobs. He MUST STOP, preferably before the current job is complete. He has no other leverage.
    I’m worried though as read online he has to given written notice to suspend work giving 7 days notice (which would mean he has to finish the current job) and then has no leverage and also cannot take on other work where he will get paid?
     
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    Newchodge

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    I’m worried though as read online he has to given written notice to suspend work giving 7 days notice (which would mean he has to finish the current job) and then has no leverage and also cannot take on other work where he will get paid?
    They have to pay him by the agreed date. They are in breach of the contract so he can, without any doubt walk off the job, preferably locking it in a way that means others cannot gain access.
     
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    fisicx

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    I’m worried though as read online he has to given written notice to suspend work giving 7 days notice (which would mean he has to finish the current job) and then has no leverage and also cannot take on other work where he will get paid?
    The contractor has already broken the contract so just stop work. Call him right now.

    There is always work for subbies. He just needs to make a few calls and can be on a new job tomorrow.
     
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    fisicx

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    STOP WORK NOW!

    Tell the contractor if they don't pay he will take legal action to recover the money.

    Don't prevaricate. Don't post on forums. Take action.
     
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    juejue7214

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    Nov 13, 2024
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    I just can’t get my head around this - can you work for us - yes it will cost you £10k, great can you start, yes I can - do the job, they say it’s fantastic but we’ve changed our mind and only want to pay £5k. Errr no I need the £10k as agreed, well tough we only going pay £5k - walk away and work elsewhere but can’t afford the loss - it’s sickening :(
     
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    fisicx

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    Take legal action to get the money!

    I assume he has a contract with the agreed amount.
     
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    I just can’t get my head around this - can you work for us - yes it will cost you £10k, great can you start, yes I can - do the job, they say it’s fantastic but we’ve changed our mind and only want to pay £5k. Errr no I need the £10k as agreed, well tough we only going pay £5k - walk away and work elsewhere but can’t afford the loss - it’s sickening :(
    Sad but true

    The construction industry has a long and shameful history of this.

    Unfortunately it's 'least loss' time, which involves not giving any more free labour.

    You may be lucky, if you wave your legal fist they may pay you to keep you quiet - or they may simply not have the means to pay you
     
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    Newchodge

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    He has stopped work for them as of yesterday and demanded payment but am worried of the penalties he could incur as he hasn’t given them 7 days notice, even though they breached contract first by not paying
    Is that 7 days notice in his contracts? Or is it just something that you read online that may not apply even if the contractor had behaved impeccably.
     
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    juejue7214

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    Nov 13, 2024
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    Thanks all for your advice, I do appreciate it. His paperwork got a bit lax so some of the jobs mentioned the price agreed in emails, some was over the phone but surely they legally can’t suddenly dispute an invoice they received 60 days ago that had 30 day terms
     
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    juejue7214

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    Nov 13, 2024
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    7 days is what I’ve read online regarding the Construction Act as it says leaving the site without proper notice can lead to termination by the contractor and they can ask a new subcontractor to finish the work and charge it to the original subcontractor
     
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    fisicx

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    They can do whatever they want. No paying a few subbies is of no matter to them. Forget the 7 days thing.

    It's up to your partner to fight this. A decent solicitor will get this sorted in no time.
     
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    Frank the Insurance guy

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    @juejue7214 , so sorry to hear of OH's problem.

    Great advice above.

    Check OH's Insurance policy - many include free legal advice and some will also pay legal costs of contract disputes! If his policy includes this - call them now for some professional and legal support.

    Unfortunately, I've seen this many times - they may well try to drag this out in the hope that you go bust!
     
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    juejue7214

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    Nov 13, 2024
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    It’s sickening, wish he’d stuck with working for private customers. I’ve told him what your suggestions are, he’s going to stick to his guns and demand full payment, will tell suppliers/hmrc we need time and just try muddle through whilst he earns off future works. Our subbies are all paid (we’ve used our savings), will just have to look if we can keep them going forwards. Going be a poor show this Christmas and plans we had made will have to be scrapped as effectively if they don’t pay, he’s just gone months not earning. I came here as know once solicitors get involved we will lose a fair chunk and after legal fees, he will only come out with enough for business bills, none left for household bills. I could cry but we’ve gotten over hurdles before and will again
     
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    Lisa Thomas

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    Recommend you instruct an insolvency solicitor to pursue the debt. I can recommend one if you dm me. There will of course be a cost to it.
     
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    Oh never thought about insurance, we pay a lot in business insurance as I added every extra I just never thought about asking them :)
    Fingers crossed you are covered. If you are, have a chat immediately.

    Failing that, don't start paying out until you have met the contractor & have a feel for what they will do/say.
     
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    fisicx

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    I came here as know once solicitors get involved we will lose a fair chunk and after legal fees, he will only come out with enough for business bills, none left for household bills.
    The legal fees and costs will be paid for by the contractor.

    But as suggested, pass this all over to your insurers. Let them deal with it.
     
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    Newchodge

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    7 days is what I’ve read online regarding the Construction Act as it says leaving the site without proper notice can lead to termination by the contractor and they can ask a new subcontractor to finish the work and charge it to the original subcontractor
    Did you read the part of the Construction Act 2009 that states that A Notice to Pay Less must be served within 5 days of the Payment Due Date? Querying the amount weeks later would appear to be illegal!
     
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    juejue7214

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    Nov 13, 2024
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    They compared his work to others and had him in for a meeting. At the end of the day, there’s different levels of skills in every job but being able to assemble a flat pack piece of furniture doesn’t make you a time served joiner and customers want perfection. I’d want a first aider to attempt CPR if my heart stopped but I’d want the best experienced and qualified surgeon to operate and fix it lol
     
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    Frank the Insurance guy

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    Good news - all invoices are being paid in full and business insurance is to remain claim free :) thanks again for all support and advice :)
    Great news!

    Fingers crossed, they follow through and you get paid in full!

    Take it as a lesson learned and going forward start demanding payment when due - don't let it slide and don't carry on working until outstanding payments made!
     
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    fisicx

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    @juejue7214 - have they now paid or are they still prevaricating?
     
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