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I’m a IT contractor based in the United Kingdom, I have my own limited company. Recently I have been working on a project for a client through a recruitment company. My contract is with the recruitment company who has then sub contracted me to the end client. Last month the end client went into administration. The client went into administration at the start of October, the recruitment company is now refusing to pay me for the work I completed during the previous month September, as they will not get paid by the end client.

The recruitment company claims they have the right to do this because I the contractor opted out of "The Conduct of Employment Agencies and Employment Businesses Regulations 2003" and our contract states under the sections termination.

"The Company reserves the right to terminate a Project with immediate effect with out liability in the event of any of the Client entering into liquidation/becoming insolvent, dissolved or subject to a winding up petition or administration order, or having its credit rating revoked or materially reduced."

As the recruitment company is still operational and they themselves have not gone into liquidation can they refuse to pay me the subcontractor for work I have already completed? The section on terminations seems to be referring to cost that maybe occurred from the sudden termination of the project not work already completed. Where does a contractor stand in this situation?

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They can terminate the "Project" (presumably defined elsewhere) if the client blah, blah, blah, however, they must still pay you for the work you did prior to them terminating the Project (if, in fact, they have terminated it - they have the right but they still have to exercise it).

Hire a lawyer.

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