Agency Refuses to Pay Acknowledged Debt, Citing Time Delay

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by

Sean Curran
in

If you are stuck in such a situation, here is what to do.

Ms. Amelia Vance was employed as a teaching assistant at Oakwood Primary School, with her contract managed through a recruitment company, Prime Education Recruitment. During her employment, Ms. Vance became pregnant and faced several difficulties with the agency concerning her maternity pay rights, which necessitated the involvement of her trade union.

Through this process, it was discovered that a national pay rise for teaching assistants had not been applied to her wages. After discussions between the union, the agency, and the school, Prime Education Recruitment formally acknowledged in writing in late 2023 that they owed Ms. Vance back pay amounting to £664.15. This was calculated based on her entitlement under the Agency Workers Regulations.

On the advice of her union representative, Ms. Vance temporarily held off on accepting this payment as they were attempting to resolve other outstanding issues with the agency. Unfortunately, her union representative then ceased all communication, leaving her case in limbo. After months of trying to get an update from the union without success, Ms. Vance decided to cut her losses and contacted Prime Education Recruitment to accept the previously offered £664.15.

In response, a new contact at the agency informed her that because a significant amount of time had passed since the offer was made in November 2023, they now considered the matter closed and would not be making the payment. Ms. Vance is now faced with a situation where the agency has acknowledged a debt in writing but is refusing to pay it, using the delay—a delay advised by her union—as the reason for their refusal.

Advice in such cases

When an employer or agency acknowledges they owe you money but later refuses to pay, it is crucial to act methodically. The fact that the debt was acknowledged in writing is a very strong piece of evidence in your favour.

  • Stay Professional: Keep all communication with the agency in writing. Avoid emotional or aggressive language. State the facts clearly and reiterate your request for the payment that was agreed upon.
  • Formal Grievance: If you have not already, consider raising a formal written grievance with the agency, outlining the history of the issue, their admission of the debt, and their subsequent refusal to pay.
  • Letter Before Action: If they continue to refuse, the next step is to send a formal “Letter Before Action”. This letter states that if the debt is not paid by a specified date (e.g., 14 days), you will commence legal proceedings to recover the amount without further notice.
  • ACAS Early Conciliation: Before you can make a claim to an Employment Tribunal, you must contact the Advisory, Conciliation and Arbitration Service (ACAS) to start ‘Early Conciliation’. ACAS provides a free service to help resolve workplace disputes.
  • Consult with Lawyer: The very basic and important step to start is talk to a Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of 100 GBP to 400 GBP depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored.

Applicable Sections of Law

Several key pieces of UK legislation are relevant in this scenario:

  • Employment Rights Act 1996 (Part II): Section 13 of this Act makes it unlawful for an employer to make deductions from a worker’s wages unless certain conditions are met. The refusal to pay wages you are contractually owed constitutes an unlawful deduction. A claim for this must typically be brought to an Employment Tribunal within three months of the deduction.
  • The Agency Workers Regulations 2010 (AWR): Regulation 5 establishes the right for agency workers, after a 12-week qualifying period in the same role, to receive the same basic pay and working conditions as if they had been hired directly by the client. Ms. Vance’s claim for back pay following a pay rise for permanent staff stems directly from this right.
  • Breach of Contract: The agency’s agreement to pay you the specified amount could be considered a contractual agreement. Their refusal to pay is a breach of this contract. A claim for breach of contract can be brought in the County Court, and the time limit for this is much longer, typically six years from the date of the breach.

If you are the complainant

As the person owed money (the complainant), you must follow a clear, escalating process to recover the funds.

  • Final Written Demand: Send one final, formal email or letter to the agency. Reference their previous email where they calculated and acknowledged the debt of £664.15. State that you are formally accepting this offer and request payment within 14 days.
  • Letter Before Action: If they fail to pay, draft and send a Letter Before Action. This is a formal legal step and often prompts payment. You can find templates online or have a solicitor draft one for you.
  • Initiate ACAS Early Conciliation: If the Letter Before Action does not result in payment, you must contact ACAS. This is a mandatory step before proceeding to an Employment Tribunal. A conciliator will be assigned to try and mediate a settlement between you and the agency.
  • File a Claim: If conciliation fails, ACAS will issue a certificate. You can then use this certificate to file a claim with the Employment Tribunal (for unlawful deduction of wages) or the County Court (for breach of contract). Given the amount, the small claims track in the County Court may also be a suitable option.

If you are the victim

Being denied money you are rightfully owed can be incredibly stressful. It is important to manage the situation and protect your position.

  • Organise Your Evidence: Gather every piece of written correspondence. This includes your employment contract, payslips, the emails from the agency confirming the amount owed, your communications with the union, and your recent emails attempting to accept the payment.
  • Create a Timeline: Write down a clear, chronological history of events, with dates. This will be invaluable for any formal complaint or legal claim.
  • Avoid Verbal Discussions: Do not discuss the case over the phone. If the agency calls you, politely state that you wish for all communication to be in writing and follow up with an email summarising their call.
  • Report Your Union: If you are paying fees to a union that has failed to represent you or communicate with you, you should raise a formal complaint with the union’s head office.

How the police behave in such cases

The police will not get involved in this type of dispute. This is a civil matter concerning employment law and contract law, not a criminal one. Reporting this issue to the police would be inappropriate, and they would direct you to seek civil remedies like contacting ACAS or consulting a solicitor.

FAQs people normally have

  • Can an agency retract an offer of back pay just because time has passed?
    It is highly unlikely that their argument would succeed in a legal setting. A delay of a few months does not invalidate an acknowledged debt. Their written admission is strong evidence that the money is owed, and they would need a far more compelling reason to justify not paying it.
  • What are the time limits for making a claim?
    This is critical. For a claim of unlawful deduction from wages, you have three months less one day from the date the payment was due to start the ACAS Early Conciliation process. For a breach of contract claim in the County Court, you have six years. A solicitor can advise on the best route.
  • What if I can’t afford a lawyer?
    You can represent yourself in both the Employment Tribunal and the small claims court. ACAS is a free service designed to help resolve disputes without legal action. However, an initial consultation with a solicitor can provide invaluable clarity on your rights and the strength of your case.

What evidence is required?

Strong evidence is key to a successful claim. You will need:

  • Your contract or terms of engagement with Prime Education Recruitment.
  • Payslips covering the period in question.
  • The email or letter from the agency dated November 2023 (or thereabouts) in which they calculate and confirm they owe you £664.15. This is your most important piece of evidence.
  • All subsequent correspondence with the agency, including their email refusing payment.
  • Any correspondence you have with the union regarding their advice to delay acceptance.
  • A clear timeline of your employment, the pay issue, and all communications.

How long will the investigation take?

The timeline can vary significantly depending on the path you take.

  • ACAS Early Conciliation: This process is scheduled to last for up to six weeks, during which a conciliator will try to broker an agreement.
  • Employment Tribunal: If conciliation fails and you proceed to a tribunal, the entire process from lodging a claim to a final hearing can take many months, sometimes over a year, due to backlogs.
  • County Court (Small Claims): This can also take several months, but is often perceived as a slightly quicker process for straightforward debt recovery claims.

Advocate Sudhir Rao, Supreme Court of India

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