Reply to: Can bank cut your rates within the first months of your contract?

[oliverson]

Banks can (and do) cut rates whenever they want. They cut mine after only five weeks as part of a bank-wide cut. You're lucky if you escape these (or mission critical).

I can do better than that. I landed my first investment bank contract in 2008 at RBS. Started on the Monday and on Wednesday got my rate cut 10%. I argued that they must have known about the cut before they offered me. After numerous emails they maintained their stance. I was gutted and angry. Contemplating what to do I bumped into my 'line manager' (translation - some public schoolboy for whom this was his first proper job - total kn0b as well) at the lifts and he asked me what I was going to do so I resigned on the spot. Next day Lehmans went bust. Fortunately I landed another one with a commodities trading company within a couple of weeks.

[billybiro]

The recruitment agency told me they couldn't cut rates in the first 12 months, lies?

As if you even need to ask....

[Bluenose]

Wow banks sound like such a great place to be right now

10% rate cut plus 8% tax increase could mean up to 18% pay cut for some staff.

The sad truth is that many won't realise this until the tax bill is due in January.

[LondonManc]

Wow banks sound like such a great place to be right now

If you can weather the next six months, they'll be fine.

[ChimpMaster]

Wow banks sound like such a great place to be right now

[LondonManc]

Bank cut my rate 10% after 2 months of my contract (as part of a firm-wide cut)

Luckily I didn't have to have 2 weeks enforced leave like some other contractors.

Two weeks enforced leave > rate cut imho.

[CompulsiveArsonist]

Bank cut my rate 10% after 2 months of my contract (as part of a firm-wide cut)

Luckily I didn't have to have 2 weeks enforced leave like some other contractors.

[jmo21]

Depending on the exact words that they used, then they are right.

The client / agency cannot cut the rate on the existing contract at any stage, unless there is a clause in the contract allowing the variation. What they can do is terminate the existing contract and offer a new one with a lower (or higher!) rate, which you are free to accept or reject.

So they aren't cutting the rate - they are terminating the contract and offering a new one. It's all in the wording.

This.

You don't know what you don't know until it happens, or someone tells you.

[missinggreenfields]

I'm negotiating with a big bank that says they wouldn't be able to cut the rates 10% in the first 12 months anyway.

Depending on the exact words that they used, then they are right.

The client / agency cannot cut the rate on the existing contract at any stage, unless there is a clause in the contract allowing the variation. What they can do is terminate the existing contract and offer a new one with a lower (or higher!) rate, which you are free to accept or reject.

So they aren't cutting the rate - they are terminating the contract and offering a new one. It's all in the wording.

[FatLazyContractor]

FTFY

[northernladuk]

The recruitment agency told me they couldn't cut rates in the first 12 months, lies?

I don't want to be rude to the poster but in many situations like this the agent trots out this tosh because the contractor is susceptible to it. You are almost allowing the agent to do it. If you know what you are doing, sound like you do and deal with the agent properly you just won't get this rubbish from them. It's like the newbie tax on the first gig. How many newbie are had over in the first gig because we were flailing around and the agent has taken advantage of it. If the agent gets a sniff that you don't have a clue he's going to have you over a barrel in a flash.

I'll bet if the same agent was faced with an experienced contractor that talked sense the agent wouldn't have tried this on.

[MrMarkyMark]

Indeed but even then whatever is in there is probably trumped by the fact they just give notice so the terms of the old contract lapse and you are offered a new one with the 10% less on it.

I was talking about the upper contract, I guess the bank could do the same to the agency in any case.
First time I have heard agencies claim this however.

If the contract is with Barclays, they wouldn't give a tulip, in any case.

[LondonManc]

The recruitment agency told me they couldn't cut rates in the first 12 months, lies?

Yep.

Get it in writing from the agent and it might not be though.

[northernladuk]

Read NLUKs response, above.

The only way you would know the agent's statement to be actually true would be to see the agencies contract with the bank.

Indeed but even then whatever is in there is probably trumped by the fact they just give notice so the terms of the old contract lapse and you are offered a new one with the 10% less on it.

[FatLazyContractor]

The recruitment agency told me they couldn't cut rates in the first 12 months, lies?