Contract rate reduction mid-term ?

[Hex]

Thanks all for the replies, good to hear from others around the business. I didn't realise its getting so common either, certainly bad business practice as most of the contractors here are now looking to jump 'the sinking' ship.


My Ltd will be informing the agency to 'jog on ' as it has another contract just about to drop in place.........


Cheers all..

Good for you. I had this with Merrill Lynch in 2008 - they dictated an 11% cut. I had already been talking to another firm about contracting with them, so I left.

[KpMrJ]

Thanks all for the replies, good to hear from others around the business. I didn't realise its getting so common either, certainly bad business practice as most of the contractors here are now looking to jump 'the sinking' ship.


My Ltd will be informing the agency to 'jog on ' as it has another contract just about to drop in place.........


Cheers all..

[AussieDigger]

Yes Barclays did try this on a few years ago and some of us stayed and some of us left. I left as I had another gig but Barclays rolled over at the last minute but it was too late, wasn't prepared to tick off my next client because Barclays were hasty.

Legally, the agency can't change the terms of the contract without issuing notice. if they don't issue notice then you can (and should) negotiate.

I'd ask them to confirm what cut they are absorbing as the agency and then suggest the cut be 'shared' for an 'agreed period' after which it should be reviewed (e.g. 2 months). If objectives are being met, it should be agreed the rate cut is restored. Don't make it a permanent thing or they will simply think you will work for less money and try it on again later.....

Its how Barclays went from paying good market rates to constantly going out to market now with rates that some of us wouldn't get out of bed for, even if they are right on our doorstep. It cheapens your experience and makes you a bod on a seat, not a valued contractor/consultant.

[Durbs]

can they really box my Ltd into a corner and force a compulsory reduction just because there end client is struggling ?

Yep, they can, and its happened a lot recently.

Had it happen to me at a big firm (lot more than 6% too). We were given a deadline to say yes or no and the terms were its either accept it or leave. I was coming toward end of project and contract anyway so said no and finished.

So, as has been said, its your own choice but contract-wise, doubt you can do anything to stop it. Depends on how much you are needed, if you are mid-project and indespensible, are they going to bin you if you say no for the sake of 6%?

[TestMangler]

I got this at HBOS/Hays in 2008. 30 days notice and the right to sign a new contract at a reduced rate within theat 30 day period.

Some stayed, some went. Personally, I went.

It's really your choice. Accept or reject as you please.

If you're happy you can find something, tell 'em to shove it.

[SimonMac]

Take the hit or walk away, whats the bench paying theses days?

[northernladuk]

They did this a number of times at Barclays in the last few years and it was more than 6%. At the end of the day you are providing a service and whenever there are cuts they will look at anything to reduce costs. Councils have put similar challenges to all providers of service to them so is pretty common.

There was much wailing and shouting at Barclays but nearly everyone I know bar one accepted the challenge, the alternative was walking.

[jmo21]

Well, you are aware they can let you go at any time right? (maybe they'll pay you a week or 2's notice, maybe they won't).

[Fred Bloggs]

If you're getting binned in a few weeks time anyway you need to weigh up what will happen if you tell them to shove their rate cut. Will they bin you early? Can you get a new job quickly if they bin you early? Or do you feel it would be best to swallow the cut and start looking for a new role?

[KpMrJ]

Morning all,

More of a lurker than a poster, but looking for some general advice on the experience of esteemed members of the board here.

Currently in contract upto August 2011 ( Renewed in Feb ). Agency are now trying to reduce the daily rate by 6% across the board for all contractors providing services to there end client.
The reasons listed are due to the end client not meeting there business objectives financially, we the contractors are to take the brunt of the cost saving.

My question is, as my Ltd contract is with the agency ( who are a very profitable organisation ! ) can they really box my Ltd into a corner and force a compulsory reduction just because there end client is struggling ?

I've yet to read through the contract as away from home/office for a few days.


Any advice/experience most welcome.

Cheers all..