My sales contractor is a lying useless idiot. Do I have to pay him?

Dear Aunty B,

We are an advertising agency who hired a contractor for new business sales. He claimed to have so much experience and had clients he could put through straight away. We agreed to pay him a fortnightly amount plus commission for a month then we would review and discuss possible employment.

In the contract his job description was to make a number of cold calls per week and contact a number of new businesses per week.

We monitored this man for a few weeks and he was useless and was not bringing in any work – not even a crumb. Anyway, we finally decided he had to go and we told him we needed his contact list while at our company.

He provided us with a notebook with names and numbers of business that anyone could have written down right from the yellow pages. There were no notes written; nothing that could be held as proof he did his job at all. When we followed up on the businesses he had listed we found out he told a number of clients that we could not help them, therefore costing us money.

We have refused to pay this lying idiot his final weeks contract wages for lying and not doing any work and taking advantage of us. He is now taking us to mediation in order to obtain the money from us. Does he have a case if he cannot produce phone records or details or his sales?

Mark,
Sydney

Dear Mark,

What a rotter. It should be dry cut. Unfortunately it’s not. The good news is you are not the first and won’t be the last to find yourself in this awkward situation.

As this gets tricky legally, I have called in our trusty legal adviser Uncle P (Peter Vitale to you.) He points out that the first step is to think about whether this guy is really a contractor or not. You don’t pay wages to contractors (their word, not mine).

Why does this matter? Read on.

You are effectively saying that he’s breached his contract. The legal remedy for that is damages. But unfortunately, your legal obligation to pay his wages is a separate issue for two reasons.

First, because you have entered a contract with him, and second because he might be considered an employee and entitled to minimum wages under the Workplace Relations Act. I’m also guessing that you don’t have a contract that allows you to offset amounts owing by him against amounts owing to him (problematic in this case in any event).

So here are the final words from Uncle P. Bottom line; if you claim (1) that this guy has failed to perform his contract and (2) you have suffered financial loss, the onus is on you to prove it.

It may be that his inability to produce evidence of his work is telling – once you are tied up in litigation. Which leads to the next curly dilemma in cases of this kind. The proof of your loss of business is going to come from your customers and potential customers. As Dirty Harry would say, you need to ask yourself a question – ultimately do you want to drag your customers into this for a week’s pay?

Instead, be a true entrepreneur, learn a lesson and move on! You will be the better for it.

Good luck,

Your Aunty B.