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Payment Issue

By Mona Vishal Poonja on 32 Comments / 2110 views

Hi All,

I recently started working as independent consultant, doing leadership hiring across. I have closed one Senior Position with one of the Water EPC Co at Ahmedabad of Rs.50.5Lacs at 10% rate. Clause signed in agreement is post 15days and within 45days payment should be released. I had raised invoice on 25th Nov,2013.

Now inspite of regular follow-ups with MD and President HR of that Co, they do not revert for any communication, and as this is my startup organisation with one man show i can’t afford paid legal lawyer too. 

Request you to help me with your advise..

Regards,

Mona

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32 Comments

  1. Hi

    Sit on the client’s head….sit in their office from morning….chew their brains and get the cheque from them…dont leave the office till they give the cheque…this can be for 2-3 days….they will definitely give the payment……else ….there are many other ways to get the payment……If your contract is signed with the perfect  “payment clause” ..its possible to sue them..

    Regards

  2. Mona

    I usually add this clause in my contracts 

    Payment Terms: Invoices are payable within 15 calendar days of candidate joining.. Delayed payments will attract a penalty of 18% per annum on the payment amount and any cost incurred by “The Search Consultant” in the recovery of such payments.”

     

  3. Hi Anushka,

    Thanks for your reply,appreciate.They had a standard contract – “payment post 15 days and within 45 days” with no penalty for late charges. Yes i am traveling to their office this week, so hoping for good.

    Agree my mistake and its a learning from your above mentioned clause. 

    Regards,
    Mona

  4. 10% of 50.5 lakh is 5.05 lakhs – if that is the due amount, I dont understand why you do not seek out proper legal help for a few thousand rupees. Don’t let it be a situation of penny wise and pound foolish. At least get one standard contract drafted that you can use with clients, or learn from other people who has the knowledge as to what practices will increase your chances of quick money recovery.

    Anushka is right, penalty clause for delayed payment is a must in these agreements. Also, there should have been an arbitration clause to prevent the matter from going to a court and be dealt with arbitrators of your choice. Suing people without all these clauses is not always very effective, but if the due amount is 5.5 lakhs, it may be worth doing as last resort.

  5. Hi Ramanuj

    Thanks..!

    Plsease find – arbitration clause : 

    “This agreement shall be governed by and construed and enforced in accordance with the laws of India. Any disputes or differences arising out of this agreement shall be subject to the exclusive jurisdiction of the courts of India”

    Mona – You may add the above clause too…All the best.

  6. Even I learned the same way….:)

  7. Well my reply might not go down well with many but i rather use the legal option as the last option.

    Going legal is lengthy and cumbersome.  The ideal way would be to try and meet them in person and figure the problem/delay out. You might have to do that couple of times and a regular followup inbetween via email/sms.

    Luck

  8. U may also start by posting relevant part of the contract in their facebook page and bring out the unethical practices they are indulging it. if they are a company of any repute, they should address the issue or atleast respond back. 

    regds 

    Sanchita (http://www.indiacod.com) 

  9. Hi Sanchita

    My views are to avoid social networks…its a public platform…lot of things get revealed and may backfire…a professional de-repute may occur for both..hence being wise we can get the money back by stringent followups and meetings….else ..Lastly a legal intervene.

    This is purely my viewpoint.

    Thanks

  10. Thanks for your valuable time and reply.

    Sanchita – I agree with Anushka, as we are involved in HR business (people b’ness) it may backfire and also credibility of my organisation would go on toss. So would avoid posting anything social directly.

    Amar – Yes I am meeting them on coming Monday and if require would stay in that city and chew their brains…

    And Anushka thanks so much for all your support. Shall mention this clause and take utmost care reg Payment clause. Also i feel as we do candidate Ref Check before final offer, same should go with Client before Signing up or empaneling with them.

    Regards,

    Mona

  11. who is the client?

    send me the case with his mail id.

    mail – alok@rodinhood.com

  13. Thanks Alok,Sent mail thru mona@ritetalent.in

  14. You can use vakilsearch.com to send them a strong worded legal notice. This usually does the trick for over 80% of our clients!!

    Mention that you are a fellow Rodinhood and we’d be happy to offer you a discount.. 🙂

  15. Hi All,

    Firstly thank you so much for your support and valuable inputs.

    Client just kept it longing for payment and atlast even candidate left the organisation with Rs.9Lacs advance salary (mite he squared off his salary). And as mentioned in clause “free replacement if candidate leaves within 6months” .

    Just thout of updating you all.

    Thanks & Regards,

    Mona

  16. Hi Mona

    this is crazy stuff….the candidate had just joined and also could avail “advance salary” …

    The clause we mention for a “free replacement” is valid for only for 3 months and not 6. please find the same.

    Replacement :  “The Search Consultant” will provide a replacement  in one month, if the candidate leaves within the warranty period of 3 months.  However, this would be on best effort basis and refunding of  fee cannot be part of the agreement.  “The  Search Consultant” will consider adjusting the fee against any other position for the above.

    Mona – I will mail you the sample “Terms of Engagement” which I sign with my clients. Hope it helps.

    Since the client has not paid you the “hiring frees”  ….it’s not required to provide a replacement. 

    If so, it would be free service to the client …I guess we are not here to do charity. What Say ?

    Let me have your inputs.

    Cheers

  17. Nice

  18. Dear Mona

    YES we should make a back reference check of the “Client” too…if they are not known to us.

    Lets keep it simple..If the “Organization” is paying their employees their Salaries on the Last day of the month or the 1st of the next month..they sure would pay their “Talent Acquisition Business Partners” the hiring fees as mentioned in the TOE.

    Also, if their employees have not left them since 4 years and more ..then it speaks about the culture and ethics of that place…Surely your money is gonna come…..:)

    Else you may begin the search with a Non-Refundable Retainer Fee and the balance amount can be adjusted with the closure as per the Agreement.

    Hope you had conducted a thorough back reference check on the candidate whom You had placed. If the process is met…..then there is no chance of any candidate backing out except for an unavoidable situation for him/her.

    Hope these few options help. Hear from you too.

    Best Regards

  19. thanks Anushka,

    yes normally our Replacement Clause is for 90days and i have signed with same clause for my other clients. Only this company had this standard clause, and i had empaneled with them just cause of reference.

    Sure please share sample “Terms of Engagement” which will definitely help me.

    Hope to see you on March 8,2014 for open house event in Mumbai.

    Regards,

    Mona

  20. hi Anushka,

    Request you to please share your terms of engagement.

    Regards,

    Mona

  21. Please send a test mail on
    Anushka.shroff@gmail.com

  22. Sent u mail from mona@ritetalent.in

  23. Hi

  24. :))

  25. Did u get the terms?

  26. Yes i did get and is quite helpful too..

    Thanks to Anushka!!! 🙂

  27. Dear Alok…….I did send her…:) !!!

  28. Anytime Mona !

    Do connect if you need more details…

    Best Regards

  29. 🙂 🙂 🙂 🙂 🙂 🙂

  30. Hi Mona,

    Came across your post; while searching for delayed payments. Wanted to know did you finally receive your overdue payment?

     I am also facing  a similar situation where the payment is delayed by 2 months ! Met the Owner / MD [who happens to be an Israeli] , did follow up mails  The only plus point is that my calls get answered promptly; but no firm commitment on payment !! All the candidates are still with the client [a well known luxury brand] & completed their indemnity period and there is no complaints regarding the candidate’s work performance.

    Working only with “referred clients” doesn’t make sense; since the client list will be small [unless you happen to be a well networked person – which majority of us are not!]  I have a comprehensive agreement [ would be happy to share it with you ; if required] The agreement serves only as a reference point; which goes for a toss in event of default. Unless its a huge amount; going legal doesn’t make sense ; considering the state of legal affairs and legal costs. The only way out is to deal with reputed clients [ the downside is they already have empanelled vendors & don’t entertain new ones!] There is whole lot of hiring opportunities with small & mid size companies and start ups; but default risks will always remain. 

    I think there is a good scope to have a database of defaulting clients [something like CIBIL]; which can be referred by other consultants. I am unsure if similar one already exists. The CRISIL rating is voluntary and not many corporates opt for it. 

  31. Actually, this is a service website I want to build…

  32. Sadly i didn’t receive the payment 🙁 

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