HCR Law Events

15 January 2018

Do you need help after the Carillion liquidation? Our experts address the key issues

I work for Carillion – what does the collapse mean for its employees?

TUPE (the Transfer of Undertakings (Protection of Employment) Regulations 2006) is unlikely to apply, which is not good news, but we can advise on how to lodge a claim with the Redundancy Payments Office (RPO) – it is worth noting that employees are being told to go to work as normal and it looks as if some form of quasi-nationalisation of the public sector work will happen. Agency and sub-contractors’ staff should also continue to go to work.

In the meantime, the companies continue to trade and the liquidators will be liable for your pay post appointment.  Historic liabilities may be lost (save where RPO can help) but it’s likely that government will pay for some staff and also, where there is a joint venture, the other party may take on staff.

If you are one of the 27,000 people with a pension with Carillion, then we can help you to get more information from the Pension Protection Fund (PPF) and PwC (appointed to manage the liquidation process) as to your pension exposure. The PPF was established to pay compensation to members of eligible defined benefit pension schemes, when there is a qualifying insolvency event in relation to the employer and where there are insufficient assets in the pension scheme to cover PPF levels of compensation.

For help and advice, contact Sam Payne on 01905 678 548 or at [email protected]

Who should I talk to for advice on my rights as a Carillion employee?

Contact one of the specialist lawyers within our Senior Executive team in confidence on 01242 246 469 or at [email protected].  We can advise on loss of employment, transfer of employment terms, redundancy pay claims or any other employment issue you may be facing. We will take the time to understand your situation and provide professional and expert advice tailored to you.

If I receive a settlement agreement, what should I do next?

Go to http://www.settlementagreementsonline.com/ for more information and for independent advice from a specialist in our Senior Executive Team. Alternatively contact our team on 01242 246 469.

I work for a Carillion contractor – will my job be affected and what can I do about it?

Employees of firms that were sub-contractors for Carillion will not automatically find themselves unemployed following the collapse. Constant monitoring of the situation is needed and management and directors of subcontractors must be alive to the financial ramifications of not getting paid on application by Carillion, and will need to cut their cloth accordingly and/or undertake a review of cash flow to ascertain how their companies will continue to trade if they are owed significant sums by Carillion.

For those companies worst affected, directors, interim FDs and those advising them should be alive to the real possibility of insolvency if their businesses cannot survive losses arising from the Carillion failure, and the risk of personal liability for the directors going forward if insolvency is an inevitability or a very high likelihood. This is a particularly dynamic time and directors need to keep on top of developments and take early advice where possible.

For expert advice on your own situation, contact Paul Grundy on 01242 246412 or at [email protected]

Carillion owes me money – what should creditors do now?

Details will soon be published (probably on the Carillion website) for how creditors can lodge a claim with the liquidators (PwC). Creditors with small debts under £1,000 do not need to prove that they are owed that money (Rule 14.3(3)).

We’re sub-contractors working on Carillion projects – what steps do we need to take now?

While continuing to work as normal, check your agreements with Carillion immediately – find a copy of the contracts you have with them, read them carefully to see if they set out what you and can’t do lawfully, and take legal advice as soon as possible.

There will be many firms, in the construction industry and beyond, who are doing this today – how you react in the short-term will be very important.

If you are in the construction industry, get in touch with Keith Blizzard on 0121 450 7951 or at [email protected]

What protection should my new contracts include to stop this happening to me again?

For the construction industry, make sure that you always contract with a main contractor using a standard form of building contract. For instance, the JCT Contracts, which include the following:

• Standard Building Contract
• Design & Build
• Intermediate Contract
• Intermediate Contract with Design
• Minor Works
• Minor Works with Design
• Major Projects (MP)
• Framework, non-binding and binding.

Set out what happens if a main contractor becomes insolvent and provide some contractual protection by covering the procedure to be followed, and establish some contractual rights within the insolvency rules. For expert advice from an experienced construction industry professional, please contact Keith Blizzard on 0121 450 7951 or at [email protected].

We’re interested in some of Carillion’s contracts – how do we bid for them?

The Official Receiver and PwC will be doing all they can to safely and securely transfer assign or novate contracts – where this is possible, we can advise on all aspects.  If you are aware of any element (part of the business or specific contracts) that you would be interested in acquiring, please let us know as soon as possible, contacting Sam Payne on 01905 678 548 or at [email protected]

What process is involved now?

The liquidator is the Official Receiver and he has asked PwC to act as Special Manager in the process, defining their roles by way of Court Order.

This is an unusual process to see in a business the size of Carillion – we would ordinarily expect administrators to have been appointed with a view to effecting a ‘going concern’ sale.

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About the Author
Sam Payne, Partner, Head of Restructuring and Insolvency Team

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Sam Payne is a solicitor specialising in restructuring and insolvency.

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