Company trying to reduce daily rate mid-term in contract
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    Default Company trying to reduce daily rate mid-term in contract

    Hi all
    I would appreciate some advice on the following tricky situation
    I am 5-6 months into a 12 month contract with a large pan-European company and bizarrely my hiring manager has now being challenged over my daily rate by his superiors who are looking at budget cuts.
    My rate was increased substantially (30%) over last year but until then I certainly undersold myself.
    My hiring manager fully supports my agreed rate but the higher managers are insisting that my rate should be reduced substantially (Max 5% above last year.
    As I operate under a PLC, are they at legally at liberty to enforce this?? , in which case I will almost certainly vote with my feet.
    The agency I am using seems to have one of those unenforceable assignments whereby they can give me only 1 months notice and I can't give then any notice (I know that this practice is quite common practice).

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    I assume you mean PSC not PLC, and that by PSC you mean you operate through your own ltd company.

    You having no notice and the agency having one month is certainly enforceable. b2b contracts are not covered by employment law. However, that's largely irrelevant. In order for your rate to be reduced a new contract must be provided. That means your agency must give your company one month's notice, and issue you with a new contract. You can't be forced to sign the new contract, so you're free to leave at that point. Not paying the amount agreed on the contract is a breach of contract.

    Search this forum for discussions about banks insisting on 10% rate reductions.

    If your client has some power over the agency, they may reduce the amount they pay for you without affecting you, by insisting the agency reduce their margin.
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    Quote Originally Posted by Brncptn View Post
    Hi all
    I would appreciate some advice on the following tricky situation
    I am 5-6 months into a 12 month contract with a large pan-European company and bizarrely my hiring manager has now being challenged over my daily rate by his superiors who are looking at budget cuts.
    My rate was increased substantially (30%) over last year but until then I certainly undersold myself.
    My hiring manager fully supports my agreed rate but the higher managers are insisting that my rate should be reduced substantially (Max 5% above last year.
    As I operate under a PLC, are they at legally at liberty to enforce this?? , in which case I will almost certainly vote with my feet.
    The agency I am using seems to have one of those unenforceable assignments whereby they can give me only 1 months notice and I can't give then any notice (I know that this practice is quite common practice).
    You have a contract to be paid at a given rate. If the client or agency (or you for that matter) want to change that then they need to terminate the current agreement and offer a new contract, which the other party is free to accept or reject. They cannot force a change in the contract terms on you mid-contract.

    If you are prepared to walk, then wait for the new contract offer to arrive (with their termination of the current one) and reject it. At the end of the current contract, you leave. It's a fairly simple process.
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    They'll just terminate your contract and offer you a new one.

    Basically if you can easily pick up another contract then refuse and accept an alternative offer. If the market is bad you haggle a bit, but essentially accept what you can. After all it is still more than you were earning last year.

    If you really undersold yourself then you will be snapped up by an alternative client.
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    Quote Originally Posted by NotAllThere View Post
    I assume you mean PSC not PLC, and that by PSC you mean you operate through your own ltd company.

    You having no notice and the agency having one month is certainly enforceable. b2b contracts are not covered by employment law. However, that's largely irrelevant. In order for your rate to be reduced a new contract must be provided. That means your agency must give your company one month's notice, and issue you with a new contract. You can't be forced to sign the new contract, so you're free to leave at that point. Not paying the amount agreed on the contract is a breach of contract.

    Search this forum for discussions about banks insisting on 10% rate reductions.

    If your client has some power over the agency, they may reduce the amount they pay for you without affecting you, by insisting the agency reduce their margin.
    Short and clear.

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    Thanks to all for your replies. Yes I do expect they will take the route of termination with a month's notice and offer a new contract at the lower rate. Got a few good prospects so will probably be politely declining. Their loss anyway. At least I had the compliment from my client hiring manager today that they will need to pay considerably more to replace me.

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    Quote Originally Posted by Brncptn View Post
    Thanks to all for your replies. Yes I do expect they will take the route of termination with a month's notice and offer a new contract at the lower rate. Got a few good prospects so will probably be politely declining. Their loss anyway. At least I had the compliment from my client hiring manager today that they will need to pay considerably more to replace me.
    If needs be you could haggle on the reduction, find something new and then tell your current client you are increasing your rates by 60%.
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    Quote Originally Posted by Brncptn View Post
    Thanks to all for your replies. Yes I do expect they will take the route of termination with a month's notice and offer a new contract at the lower rate. Got a few good prospects so will probably be politely declining. Their loss anyway. At least I had the compliment from my client hiring manager today that they will need to pay considerably more to replace me.
    Perhaps he should be mentioning that up the chain rather than down? That's without loss of productivity, unrecruitment time, lead time and getting someone else up to speed. Or just reapply at 50/day more than you're on now
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    If they are going to change it mid contract then drop these guys a note and get in on their register if they aren't already there. Not sure they are interested in individual cases and only put the group wide take it or leave it situations.

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