Reply to: 2e2 into administration - what next for contractors

[crowe99]

Sorry to hear about this, hope you get something back.

If you are a member of PCG, you may be covered by their agency default insurance.

Can't remember how much this is, but may be worth checking.

Thanks for the advice. It looks like the PCG cover could assist although in this case the contract is with a 3rd party who provide services to 2e2 who are in Administration. At the least their legal helpline is useful so thanks again. Fingers crossed for a positive (of sorts!) outcome.

[0mega]

Sorry to hear about this, hope you get something back.

If you are a member of PCG, you may be covered by their agency default insurance.

Can't remember how much this is, but may be worth checking.

[rob s]

Even if they have a clause that says the contractor does not get paid unless the agency does? We have had issues with this type of clause on the forums before.

I thought pay-when-paid (or whatever it's called) was made illegal back in about 1998? Or was that just for construction contractors?

[cojak]

2e2 into administration - what next for contractors

WWAS regarding getting legal advice.

If anyone with experience of this has recommendations of legal advisors I'm sure they'll be welcome.

[BoredBloke]

Nice to know that as contractors we have zero risk!!

[WindyAnna]

As someone who has been on the wrong end of this more than once it doesn't look good.

If you're through an agent rather than direct to 2e2 then as PPs have said the agent should pay you but check your contract first, it is possible that there is a clause in their to state that they can withhold payment in the event of their not being paid.

If you're working direct for 2e2 then you're probably stuffed, the role of the administrator is to keep as much money in the business as possible whilst continuing to bring it in. If you are working on a client site then they are unlikely to pay you for the time worked as they will be legally obliged to pay that money to 2e2, so if they pay you then they will be paying it twice! If you have a truly lovely end client they may make a gesture but it is likely to be small and may still be challenged - in my experience when M&S made a clear "goodwill gesture" of payment to each contractor affected the administrator threatened legal action to get that money paid to them and frankly only withdrew when M&S indicated they were prepared to fight.

If you have insurance it is unlikely to cover your daily rate but you can invoke it.

If you have contractual clauses related to insolvency they can't be invoked for administration (I've tried).

Take legal advice before doing anything - administration law is an absolute minefield - don't assume the folks on here know what they are talking about (although many do).

Good luck!
Windy

[northernladuk]

The best thing is to sit tight. Your contract is with the agent (not 2e2) who has insurance in place should such an event happen. Essentially, until your agent tells you to come off site, they're contractually bound to pay you. Someone might jump in and buy the part of the business that you're contracting for (there are 10 in all).

You can be assured that there are people behind the scenes trying to ensure that continuity is maintained with 2e2's client base.

Even if they have a clause that says the contractor does not get paid unless the agency does? We have had issues with this type of clause on the forums before.

[Andy Hallett]

Essentially, until your agent tells you to come off site, they're contractually bound to pay you.

Spot on.

[BolshieBastard]

As already said do not submit any further invoices or timesheets to 2e2.

You need to inform the client you have to break the contract with 2e2 by not coming in for work for one day. This is not a holiday, it is not billable or paid.

You then need to discuss with the client payment of your outstanding invoice (the one(s) not sent to 2e2), whether they'll take you direct, whether you can select another agent or have to use one on their PSL. You also need to make your client aware that any additional or higher charges applied by an agent on their psl wont come out of your rate ie you will be paid the same rate as under 2e2.

Good luck and keep in touch with any other contractors affected by this.

[cojak]

The best thing is to sit tight. Your contract is with the agent (not 2e2) who has insurance in place should such an event happen. Essentially, until your agent tells you to come off site, they're contractually bound to pay you. Someone might jump in and buy the part of the business that you're contracting for (there are 10 in all).

You can be assured that there are people behind the scenes trying to ensure that continuity is maintained with 2e2's client base.

That will VERY much depend on how much they are owed by the agency.

Insurance isn't worth squat on many of these occasions - we've seen agencies go bust leaving contractors out of pocket by £000's.

[Ark3000]

Sit tight...for now

The best thing is to sit tight. Your contract is with the agent (not 2e2) who has insurance in place should such an event happen. Essentially, until your agent tells you to come off site, they're contractually bound to pay you. Someone might jump in and buy the part of the business that you're contracting for (there are 10 in all).

You can be assured that there are people behind the scenes trying to ensure that continuity is maintained with 2e2's client base.

[craig1]

The problem is the client's contract for Jan will be with 2e2, so they can't just pay the money to someone else, and even if they can are under no obligation to do so.

Also, the administrator will be on to the client asking them to pay any accrued work as a debtor while giving you your p/£ slice of the outstanding assets as a creditor, the client would have to be unbelievably generous to pay twice. As a further problem for you, most bank loans of the type 2e2 will have had will have floating charges across their entire estate meaning they get first call on the money after the formally secured debtors, that means those unsecured creditors will get beans at best.

[Cozzi]

2e2

The problem is the client's contract for Jan will be with 2e2, so they can't just pay the money to someone else, and even if they can are under no obligation to do so.

In the same boat ... have you had any advice from your agency?

[VectraMan]

If you send your invoice to 2e2 then you'll go on the list of creditors - and are unlikely to see any or much of the £. Your contract with them should allow you to terminate if either party goes into insolvency, so I would get a direct contract in place with the client from now.

I would also speak to the client and see whether they will pay your Jan invoice directly.

The problem is the client's contract for Jan will be with 2e2, so they can't just pay the money to someone else, and even if they can are under no obligation to do so.

[SarahL2012]

Trying to think back to when this happened to me... ISTR that the timesheets are the key to the money and careful attention needs to be paid to whom they are sumbtted. i.e. the end client vs the agency (or their receivers) I lost one set when an agency went bust, but the client took the second set and paid out on them, meaning myCo only lost a months worth of invoices.

If you send your invoice to 2e2 then you'll go on the list of creditors - and are unlikely to see any or much of the £. Your contract with them should allow you to terminate if either party goes into insolvency, so I would get a direct contract in place with the client from now.

I would also speak to the client and see whether they will pay your Jan invoice directly.