Reply to: Client gone bust =- should I still get paid?

[original PM]

No. Depends on the contract.

If your contract states you get paid regardless then it fails IR35 but you get paid.

However if your contract is "normal" (well to me) then it will state that notice period is 2 weeks but you are only paid for work done, no obligation to find work etc.

Your contract notice period will be 2 weeks. Nothing saying they have to ask you to do any work in those 2 weeks.

Stop thinking about notice periods like permies - just becuase it says 2 weeks does not mean you will get paid 2 weeks.

Not sure about this - if they have not given your company the agreed 2 weeks notice then you will be able to sue for breach of contract and subsequent loss of income.

That is the reason why companies have notice periods for termination of contract - it is nothing to do with being paid or not being paid for work.

Think about it - you are tied into contracts on many levels - but say with Sky - you have to give a months notice to terminate the contract - you still have to pay during that month regardless of whether you watch it or not - in the same way that sky have to provide the service for that month whether you use it or not. And that is they key - your companies time has been set aside to work for this client at x per day - if they decide not to use it well that is fine but they still have to pay.

Small point I think but probably valid.

Maybe..

erm?

[xoggoth]

If the company goes into administration then there may be a distribution at a later date if there is any dosh left over. I would be inclined to discuss with the agency how they intend to insure that they are registered as creditors and how they will then pay you any proceeds.

[Sockpuppet]

assuming you are ltd company then the agency are in breach of contract for not paying the 2 week notice.

it is pretty black and white for me - bill them and chase it through courts.

as others have said if the agencies end client goes bust it is nothing to do with you - you have no contract with them.

No. Depends on the contract.

If your contract states you get paid regardless then it fails IR35 but you get paid.

However if your contract is "normal" (well to me) then it will state that notice period is 2 weeks but you are only paid for work done, no obligation to find work etc.

Your contract notice period will be 2 weeks. Nothing saying they have to ask you to do any work in those 2 weeks.

Stop thinking about notice periods like permies - just becuase it says 2 weeks does not mean you will get paid 2 weeks.

[original PM]

assuming you are ltd company then the agency are in breach of contract for not paying the 2 week notice.

it is pretty black and white for me - bill them and chase it through courts.

as others have said if the agencies end client goes bust it is nothing to do with you - you have no contract with them.

[TykeMerc]

Sorry the contract is with the Agency, invoice them.

If they went bust their administrators would pursue any avenue that led to profit. If you have a contract that specifies you are paid notice then that is what is paid. If you owed money to your bank would it matter to them if your customer went bust? No!

Invoice them, pursue it reasonably don't spend too much time on it. Worst case its an IR35 pointer. Best case you get some cash.

Valid point that, the Agent isn't bust, the fact that their customer went boom isn't your problem, while they're still afloat you can purse them.

[Beefy198]

But if he legally hasn't opted out (because an opt clause was signed after being introduced) surely the contract couldn't include a termination clause if the client goes bust?

[Inside Agent]

You may find your agency has the right to terminate if their client goes in to administration or equivalent.

If they don't you are entitled to notice. In most instances they will have to give you notice in writing, if they haven't ask for it and review against contract.

[vetran]

Contract with the agency

Sorry the contract is with the Agency, invoice them.

If they went bust their administrators would pursue any avenue that led to profit. If you have a contract that specifies you are paid notice then that is what is paid. If you owed money to your bank would it matter to them if your customer went bust? No!

Invoice them, pursue it reasonably don't spend too much time on it. Worst case its an IR35 pointer. Best case you get some cash.

[Beefy198]

I would check the date you signed the opt out. If you had already been given job info, interview dates or had the interview you should have a pretty good case for actually still being opted-in (and therefore, as I understand it, being paid by the agency regardless)

[YHB]

You didn't have to have met them face to face.

You just had to be intorduced to them before the opt out for it to be invalid.

do you mean by just your cv being put forward for the role? or a telephone chat etc

[SueEllen]

If the company is really gone bust then you should find out exactly why to see if there is any chance of them paying creditors. If it's to do with the taxman or fraud then your agencies will be way down on the list of creditors.

A member of my family years ago worked for a dodgy bank and didn't get their 4 week notice period paid.

[Pondlife]

Yes but he's talking about the notice period. It falls into that slightly grey area of whether you should be paid for work you haven't done (and so don't have timesheets for) because of the notice period.

I would have thought, esp if claiming to be outside IR35, that the MOO clause would dictate that the client is not obliged to provide you any workfor those 2 weeks and therefore you have nothing to bill for.

Notice period is, IMHO, only there to ensure that the contractor doesn't down tools halfway through.

[blacjac]

You didn't have to have met them face to face.

You just had to be intorduced to them before the opt out for it to be invalid.

[monkeygeorge]

A couple of points which may be of interest. Firstly, opting out is ineffective if you have met the client by the time you sign the paperwork, which is usually the case, so that might be a way around it.

Secondly, are you a member of the PCG? If so, I think their subscription (it might be the more expensive version) insures you for such losses.

No, I didn't meet the client face to face.

Not, not a member of the PGC.

[THEPUMA]

Thanks all.

My contract is with the agency.

Looks like I acted too hastily when the agent told me to go ahead and opt out, assuring me there's no problem and that most people do it. Of course no one expected this would happen.

I was intending to work a few days during the notice period but I don't see what difference it makes, unless it looks better for me if this does get to court.

Looks I have to read up on opting out for my next contract.

A couple of points which may be of interest. Firstly, opting out is ineffective if you have met the client by the time you sign the paperwork, which is usually the case, so that might be a way around it.

Secondly, are you a member of the PCG? If so, I think their subscription (it might be the more expensive version) insures you for such losses.