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Successful recovery of £3,600 for a recruitment agency

Posted in December 2014

Studio Staff specialise in the supply of permanent and temporary personnel to the film and television industry. From cameramen to body doubles and even tea ladies, Studio Staff personnel work on some the UK’s most popular TV programs.

The recruitment challenge

The unauthorised employment of temporary staff by clients is a problem that affects most recruitment agencies.

A TV production company that produces news programs and documentaries has been a regular client of Studio Staff for almost 8 years. During this time the placements were always on a temporary basis, however, Studio Staff were aware that occasionally, personnel placed with the company would became unavailable  after a few months and had obviously been directly employed by the company as replacement personnel were never requested.  As the production company was a presitgous and valuable client the poaching of staff was tolerated until the occurrence became more and more  frequent and a lighting technician became unavailable just a week after being placed with the company. Studio Staff referred to their terms and conditions of business and calculated a permanent placement fee of £3,000 plus VAT based on 10% of the permanent salary of the position. The invoice was issued and remained outstanding after 3 months while other invoices continued to be paid on time.

The debt recovery process

Our usual recovery process commenced with an Initial Demand, the letter was sent on the same day we received the instruction and requested full payment within 7 days. Our initial investigations focussed on the robostness of our clients terms and conditions which would be relied upon should litigation be required, and proving that the lighting technician had been directly employed by our client’s customer. A Final Demand letter followed the debtor’s failure to respond within 7 days. This allowed the debtor a further 7 days to pay and explained that a County Court Claim would be issued if the they failed to settle the debt. The Final Demand was accompanied by copies of our client’s terms and conditions relating to the permanent placement fee, and evidence of the lighting technicians name appearing in the credits of the production company’s latest program.

We were contacted by a director of the debtor company 3 days after issuing the Final Demand. The debtor’s position was that while they wished to maintain their working relationship with our client and would be happy to accept the original outstanding debt, they were not prepared to pay the late payment interest or the recovery costs that had been added to the original amount. Late payment interest and recovery costs are both legally recoverable under Late Payment legislation, however, on this occasion our client decided that they would prefer a swift conclusion by accepting the original amount and paying our recovery fee.

Customer retention

Its difficult to recover a debt and maintain a good working relationship with a customer. Working with a third party debt recovery specialist to negotiate on your behalf can produce positive results quickly without the stress and strain involved in direct contact. Studio Staff now have an improved relationship with their customer who has agreed in future to negotiate permanent placement fees before offering direct employment.

Advocate are currently working with and on behalf of Studio Staff on two similar cases.

 

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