Recruiter in administration stiffs contractors

Just an update on the situation reported on Names Faces. It's a very important story for anyone working through an agency.

The recruiter re-opened as a new entity under the same directors but did not take over the old contracts that it owed money on. That is, where it owed lots of pay to the contractors. Those contractors will not be paid now.

Meanwhile the directors took the contracts that will deliver more revenue to them. This is a disgusting business practice. The directors simply paid shell games to avoid having to pay their workers. It's an old game.

Names Faces has very good coverage of how IT contractors can, for once, do something to stop themselves getting screwed.

http://www.namesfacesplaces.com/html/view_article.asp?id_no=1305&photopage=0

x
Sunday, December 14, 2003

A real problem in IT contracting is that contractors tend to look on themselves as employees of these bodyshops and they willingly give employer-like powers over themselves to these shops. (Many/most contractors also price their services like they're taking a regular job, IE way too low to reflect the risks, but that's a separate rant.)

IE, if your EMPLOYER is late paying you, well then you must be PROFESSIONAL and not make a scene because "big daddy employer" knows best. 

Except - you are really a vendor, and the body shop is really your client, and you are really not protected by any employment laws, including those that specify that employee wages must be paid, because you aren't an employee.

If contractors that worked for these outfits would simply not be pushovers and would force themselves to be businesslike and not be embarrased about talking straighforwardly about money, then we would not have these patterns of body shop abuse.

Bored Bystander
Sunday, December 14, 2003

Agree 100% with Bored Bystander.

These supposedly dodgy agencies only get away with it because their contractors let them.

UK contractors need to start acting more like businesses and less like sweat-shop employees. Who can be suprised by IR35, etc when 90% of contractors don't even hold the pretense of running a genuine business.

[Sorry if this is secerely off-topic for JoS].

Steve Jones (UK)
Monday, December 15, 2003

I meant "severely" - ooops.

Steve Jones (UK)
Monday, December 15, 2003

US contractors generally act like a bunch of pantywaists, too, and stuff like this also happens a lot here. I guess our shared culture and values extend deeper than our legal system... :-(

Bored Bystander
Monday, December 15, 2003

This is the third time that this has happened this year, where agencies have gone into receivership and then opened with a similar name. This one was Chamberlain Scott who metamorphosed into Chamberlain Scott UK.

Most contracts havean insolvency clause in them that invalidates the contract if one party goes into administration.

The administrators have confirmed that the new Chamberlain Scott does not own the contracts. However, they are telling their contractors and clients that nothing has changed and are trying to operate as normal. Most contractors don't realise that anything has changed.

It has changed dramatically for the contractors who are still owed money by them and who no longer contract through them.

They are owed up to $100,000 each. The ones we know of are owed $1.5 million, and the debt may be as much as $4 million.

We have got them all free legal advice and they are being formed into a fighting team by a group of lawyers that we know.

Chamberlain Scott (UK) have told their contractors that they are closing down for Christmas from December 23rd to Jabuary 5th. they have phoned round asking them to get their timesheets and invoices in. No doubt they will continue to bill clients while not paying contractors.

Their staff have been told that it is paid leave but that they won't be paid till the end of December.

There is more to come here, I believe, from this story, e.g. what happens on January 5th.

Gerry
www.NamesFacesPlaces.com

Gerry McLaughlin
Monday, December 22, 2003

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