Hundreds of IT contractors have been left without pay after an Australian payroll management company unexpectedly and abruptly stopped trading.
Plutus Payroll covers thousands of contractors, many of whom worked in IT in Canberra, and has operated for more than two years.
It suspended trading this week owing to what it described as a “commercial dispute”, putting the pay of some of its customers in jeopardy.
All content has been removed from its website, and an email to recruiters warns them against sending further payments through Plutus.
“If you have funds in preparation for transfer to us we urge you to take immediate action with your bank to ensure the transfers are stopped,” the Plutus email reads.
“Some of your contractors will have had their pay adversely affected … We have taken the initiative to contact these and all other contractors to let them know we are attempting to resolve the issue and recover any pay that may be owed to them.”
An assistance phone line offered in the email goes straight through to a mailbox, which is full and unable to take new messages.
Tim Munk was a former client services manager for Plutus but was made redundant earlier this year, along with a number of other staff.
Munk said he was now fielding calls, texts and Facebook messages from worried contractors who were trying to find out what had happened to their pay. He said the situation had caused significant uncertainty.
“My understanding is that there’s a lot of pain in the market, a lot of contractors are worried about their pay and their super,” Munk told Guardian Australia. “I’ve been trying to help people wherever I can.
“These are people who I’ve looked in the face and shared coffees with, and to have this all unfold so abruptly … it’s just heartbreaking.”
A Plutus spokesman said the contractors would be paid once the commercial dispute was resolved. He was unable to divulge the nature of the dispute, and could not say how long it would take to be resolved.
“There is definitely a commercial dispute and the result of the dispute is that they cannot make payments,” he said. “And obviously for a company that survives on making payments, they’ve made a decision to suspend their business.”
The spokesman said he believed fewer than 1,000 contractors were affected.
“I’m not going to insult you by saying the company feels very badly, but they do,” he said. “The brand was really built on the provision of services … and they do take it very seriously.
“They are well aware that many of their contractors will have made other arrangements with other payroll management providers and they deeply regret that.”
The viability of the company’s business model had been questioned by others in the sector. Plutus tried to undercut competitors by offering no-fee payroll management services.
It was bought last year by a private equity firm, Synep.
The Association of Professional Staffing Companies managing director, Julie Mills, said it was still unclear exactly how many contractors had been left without pay.
Mills said the company had about 3,000 contractors on its books but said it was unlikely all were affected.
She said it appeared the new owners of Plutus wanted to offload the payroll management side of the business but that something had gone wrong during negotiations.
“They’ve notified everybody as soon as they had gotten their own advice, but they had more than 3,000 contractors on their books,” she said. “How many of those are actually impacted, in terms of not being paid in the last five days, I don’t know.”
Munk said the company’s model had raised questions about its ability to turn a profit. But he said the company’s staff were told it could make money by offering “peripheral services” to customers.
He said he had no reason to disbelieve that was a profitable model. “Having worked there for two years give or take, and seeing the expenses that the company was chewing through, I had no reason not to believe that,” he said.
