DCA & employment debt

homer_j_3

Hi,

I have a client who I am trying to sort a remortgage out for and they have been telling me about a problem they are going through. Not being on the internet, I told them that I might know a few nice people who can try and shed some light on what could happen to them.

The issue is that one of them is contracted to a company and has a 12 month contract. Without going into the boring details, my client wants to exit his contract early and was prepared to pay what he thought was the charge for exiting (approx 2k). The company he is contracted to has now said that he will be charged a significant amount more for the earnings that the company will be losing due to them not being there (approx 12k).

They are not key to the business in a sense that he is the only person doing that job but does generate income for them.

I have looked through his 80 page contract but not being a legal eagle, I cannot see where it says that they can do this. I have recomended he take legal advice with regards to the contract and he knows that he should have done this prior to signing but hinesights a wonderful thing - He is a genuine person who trusts people on their word and did ask what the penalties were if they had to break contract and was told it would work out to be in the region of 2k with the breakdown of what they would charge ( cost of training and recoup of the money paid to the recruitment co).

He is now worrying that the company will instigate their solicitors and ultimately DCA's to chase this money. I do not know if DCA's can get involved with these kind of debts if they are not under a CCA type agreement unless they bought the debt? I am not an expert on this either so wouldnt be suprised if I was misguided here.

If the dispute gets to a DCA, what can my client expect, will they go for a CCJ or will they just be looking for an agreement to pay?

My client has said that if his sols advise that the contract is worded to allow the loss of earnings figure then he would be prepared to offer an amount and to pay it back at a figure that is affordable but he is worried that they will just sell the debt on and/or pass it to a DCA to deal with? Can they do this?

Many thanks in advance for any replies.

madduck

Is your client contracted as an employee or as a contractor? ie is it an employment contract or a contract for service?

If it is an employment contract - what is stated in the contract re notice period? Strictly speaking, just as an employee is legally entitled to notice of the termination of employment, the employer should be entitled to receive notice of the employee leaving. Failure to do so would constitute a breach of contract and the employer could sue for costs incurred in filling the gap left by the employee.

Don't think that it happens all that often though - and would tend to be posts which are particularly business critical or where there are issues regarding the employee going to work for a major rival and perhaps taking particular technical information/skills with them or being in a position to poach clients and such.

homer_j_3

Good question...he is contracted to the company on a self-employed basis. He is a trainee IFA and they have spent money on trying to get him through his final qualification and upon his 2nd successive fail, he is questioning the support he is getting - promised more than actually received. He is not paid a salary, just income on business written, and he is repaying the cost incurred to recruit him so it seems all a bit heavy handed to me.

His contract says that he has 3 months notice to give but it cannot be served until 3 months before the end of the 12 months - i.e. he cannot give notice which would mean he would leave before the 12 month anniversary.

I am not sure how this works within employment law but he is really worried about what action they can take against him to chase for a debt that he does not agree with?