Temporary Worker - Company gone into administration

[howlinmad]

Hi, I'm hoping someone could help with a problem my friend has. He worked for a company over Christmas on a short term contract and left the company in the first week of January. In the second week of January it was announced that the company had gone into adminstration. He was due to be paid last Friday but when no money had appeared in his account he telephoned the administrators and was told that as he had left the company before they were called in they were not going to pay him. However, they did pay all the people still working for the company. Are they allowed to do this?

[RacerMDR]

It's a tough one. He'll need to register with the administstors.

When it happened to me - I was on a 2 month payment schedule.

I was offered a penny in the pound. The company owed my 40k and the inland revenue over 1million.

You can imagine what happened.

I suspect your friend will be out of pocket.

Hope it isn't too much

[Jonboy_t]

Unfortunately, I don't think any good will come of the situation. If the company is in administration, they are obviously in considerably more debt to others than they are to a temp they took on to cover Christmas. The company should have an obligation to clear a percentage of the largest debts first wherever possible I believe, so I would imagine that your friend may very well be close to the bottom of the pile, if not lower.

Best of luck to him though, nasty thing to happen to anyone.

[fergywales]

Paid all company employees still working there, you say? They should start praying that the administrators are short sighted then, that is payment in preference and a disgruntled creditor can demand the recovery of paid wages/salary from the employees.

As for the OP's friend, it will as said be a case of joining a probably long list of creditors, as an unsecured creditor at that, so expect nothing when the process is complete.

[JimiGT]

fergywales said:

Paid all company employees still working there, you say? They should start praying that the administrators are short sighted then, that is payment in preference and a disgruntled creditor can demand the recovery of paid wages/salary from the employees.

As for the OP's friend, it will as said be a case of joining a probably long list of creditors, as an unsecured creditor at that, so expect nothing when the process is complete.

Employees are classed as preferential creditors so they will have preference over other unsecured creditors.

As for the OP question, employees are preferential creditors for money owed from the 4 months leading up to the insolvency order. The other issue is you say he was on a short term contract. Was this DEFINITELY an employment contract rather than a contract for service? If not then he woud not have been a preferential creditor.

HTH

[fergywales]

JimiGT said:

fergywales said:

Paid all company employees still working there, you say? They should start praying that the administrators are short sighted then, that is payment in preference and a disgruntled creditor can demand the recovery of paid wages/salary from the employees.

As for the OP's friend, it will as said be a case of joining a probably long list of creditors, as an unsecured creditor at that, so expect nothing when the process is complete.

Employees are classed as preferential creditors so they will have preference over other unsecured creditors.

As for the OP question, employees are preferential creditors for money owed from the 4 months leading up to the insolvency order. The other issue is you say he was on a short term contract. Was this DEFINITELY an employment contract rather than a contract for service? If not then he woud not have been a preferential creditor.

HTH

Since when does a preferential creditor get paid within two weeks of insolvency proceedings? The administrator would probably not have even seen anything bar a court appointment notice (as I would doubt the way things sound that this was a voluntary course of action), let alone have established in that time that the company was not in a position to be saved and quantified the saleable value of the business as a whole.