When is a rate cut not a rate cut ?

**BrilloPad** · 26 June 2008, 21:00

Originally posted by Maddog View Post

Say you worked for a City bank with an incumbent resource provider called Hates IT.

The bank lose shed loads on dodgy loans and to try and lessen their huge losses by telling Hates IT to send all their contractors an email stating unfortunately you all have to take a 10% rate cut - take it or leave it. Nice touch !

4 weeks later a new contract turns up for all those who haven't got round to telling them to stick it. For one fortunate contractor,the over worked HR admin person, takes 10% of his rate and then adds a £100 i.e. £500/day - 10% =£450, the contract is written and signed by hate IT for £550/day.

Contractor countersigns it and hand delivers it to Hates IT.

So now the contractor has a new contractor with a £50/day rise.

If such an event happened, have Hates IT got a leg to stand on, or can contractor insist on rate on contract (purely hypothetical question - HR departments are far to good to ever make such a mistake)

Surely they can give 4 weeks notice? I guess the IB might not be too happy with them...

**Maddog** · 27 June 2008, 06:46

Originally posted by BrilloPad View Post

Surely they can give 4 weeks notice? I guess the IB might not be too happy with them...

What if said contractor did not advise they had been underpaying him until month 6, and then asked for the difference £12K, especially as Hates IT do self billing, so the contractor never have to produce an invoice himself , stating what rate he thought he was on - don't think the IB would care, it's down to Hates IT to make the difference up.

Don't anyone say this is immoral - it is immoral for an agency to renew a 6 month contract on a Thurs at the same rate, and then on the Friday say the 1 day old contract is having it's rate reduced by 10%, when they knew that all along about the rate cut (but "were not allowed to tell anyone"!)

- All hypothetical of course !

**TheVoice** · 27 June 2008, 06:56

They wrote & signed the contract, it's legally binding. Yeah they can give notice of termination but at the end of the day, do you really want to be working for a bank that cant count?

Anyway, I'm sure you've got a early termination penalty clause in there

**Lockhouse** · 27 June 2008, 07:03

Originally posted by Maddog View Post

Say you worked for a City bank with an incumbent resource provider called Hates IT.

The bank lose shed loads on dodgy loans and to try and lessen their huge losses by telling Hates IT to send all their contractors an email stating unfortunately you all have to take a 10% rate cut - take it or leave it. Nice touch !

4 weeks later a new contract turns up for all those who haven't got round to telling them to stick it. For one fortunate contractor,the over worked HR admin person, takes 10% of his rate and then adds a £100 i.e. £500/day - 10% =£450, the contract is written and signed by hate IT for £550/day.

Contractor countersigns it and hand delivers it to Hates IT.

So now the contractor has a new contractor with a £50/day rise.

If such an event happened, have Hates IT got a leg to stand on, or can contractor insist on rate on contract (purely hypothetical question - HR departments are far to good to ever make such a mistake)

As a Hates contractor myself this really brightened up my day - good on ya!

**NotAllThere** · 27 June 2008, 07:14

Originally posted by Maddog View Post

What if said contractor did not advise they had been underpaying him until month 6, and then asked for the difference £12K, ...

So at month 6, the contractor "suddenly" notice you've been underpaid for 6 months, and start dunning. . Hates IT might argue, that the contractor was aware that it a mistake had been made, and you had a duty to raise it as soon as he became aware. If it got to court, the judge might be a tad unsympathetic.

What would be better, I think, would be to suddenly notice, a couply of weeks after the second payment seems about right, that the amount paid doesn't match the amount on the contract. Then alert Hates to the problem - they're underpaying you.

By then incompetent bankers will be so in love with the contractor, due to his amazing work and commitment that they won't want Hates to ditch him, and he'll be in a good position to negotiate. They'll be on a narrow margin, so they don't have much room, and I think he'd have to allow them SOME profit... but for past payments, he should hold them to the terms of the contract.

**ratewhore** · 27 June 2008, 08:03

If they (pimp) are that dumb do you really think they'll notice?

Nice one

**Lockhouse** · 27 June 2008, 10:05

The biggest issue I've got with Hates (apart from their rubbish contracts) is their laziness. Even the rate reduction letters were sent out personally - not even with Ltd names on. I hope all you good little contractors that signed them removed all the personal stuff and substituted yourco's name before (cough) sending them back?

**Maddog** · 27 June 2008, 11:31

Originally posted by Lockhouse View Post

The biggest issue I've got with Hates (apart from their rubbish contracts) is their laziness. Even the rate reduction letters were sent out personally - not even with Ltd names on. I hope all you good little contractors that signed them removed all the personal stuff and substituted yourco's name before (cough) sending them back?

You got a rate reduction letter !! They must think the sun shines out your butt -My hypothetical friend was informed by a group email !

**BolshieBastard** · 27 June 2008, 18:47

Contracts normally have a condition that states 'error or omissions notwithstanding' or 'force majeur' (sp?).

The agent could claim the rate increase is a clear error at a time when all other contractors with the same client were being informed of a rate cut.

They could also similarly claim force majeur in that the administrative error of the increase was beyond their control as a slip of the pen.

When is a rate cut not a rate cut ?