Can an employment agency legally withhold payment to me?

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 prohibit employment businesses from withholding payment to work-seekers in certain circumstances.

For the purposes of the regulations an ‘employment business’ is a business that employs or engages work-seekers under a contract who in turn works under the supervision of another person. This practice is often referred as ‘temping’.

In what circumstances is an employment business prohibited from withholding payment to a work-seeker?

An employment business is not allowed to withhold from a work-seeker the whole or any part of any payment in respect of any work done by the work-seeker on any of the following grounds:

Non-receipt of payment from the hirer in respect of the supply of any service provided by the employment business to the hirer

The fact a hirer has not paid the employment business is not a lawful ground for which the employment business can withhold payment to a work-seeker.

The work-seeker’s failure to produce documentary evidence authenticated by the hirer of the fact that the work-seeker has worked during a particular period of time

Ordinarily, an employment business will require a work-seeker to complete timesheets confirming the hours they have worked. An employment business will usually require the work-seeker to ensure the timesheet is signed by the hirer at the end of each day or at the end of each week.
In practice, hirers may refuse to sign timesheets where, for example, they are not happy with the standard of work carried out by a work-seeker. However, a hirer’s refusal to sign a timesheet is not a lawful ground for an employment business to withhold payment to a work-seeker. In such circumstances, the employment business should satisfy itself by other means that the work-seeker worked for the particular period in question, for example, by asking the hirer, interviewing other workers on the site or by checking any site diary kept by the hirer.
There is nothing in the regulations which would prevent an employment business from delaying payment to a work-seeker while it makes inquiries to verify the hours worked by the work-seeker. However, in such circumstances payment should only be delayed for a relatively short period of time.
If the work-seeker claims to have worked more hours than he actually worked, there is nothing in the regulations which would prevent an employment business from withholding payment in respect of the hours claimed which were not actually worked.

The work-seeker not having worked during any period other than that to which the payment relates

If a work-seeker is late for work, did not work a full week, or did not work for a minimum amount of hours stipulated by the hirer, the employment business is still required to pay the work-seeker for the hours which they did work and cannot penalise the work-seeker, for example, by paying him a lower rate for the hours worked or by refusing to pay him at all.

Any matter within the control of the employment business

Any matter within the control of an employment business will usually refer to the employment business’s payroll system. If, for example, an employment business makes an administrative error with its payroll resulting in a work-seeker being underpaid, the employment business’ failure to correct the error within a reasonable period of time will amount to a breach of the regulations.

What about where an employment business merely threatens to withhold payment?

An employment business is also prohibited from threatening to withhold from a work-seeker (whether by the means of the inclusion of a term in a contract with the work-seeker or otherwise) the whole or any part of any payment in respect of any work done by the work-seeker on the grounds set out above. 

Article written by...
Nicola Laver LLB
Nicola Laver LLB

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A non-practising solicitor, Nicola is also a fully qualified journalist. For the past 20 years, she has worked as a legal journalist, editor and author.