'I was offered and signed up for a contract. A couple of days before it was due to start I called the agency to check the address - and was told that there was a chance the contract would not happen…then that it was unlikely to happen…then that it was definitely off. Luckily I was able to secure an extension of my previous contract, but the rate was less.'
It is an unfortunate (and in my view disreputable) practice of many agencies to sign up contractors for a position they claim to be 'certain', and only then to try and get the Client signed up. The Client (for whatever reason) becomes less enthusiastic; the agent puts his head in the sand and hopes all will be OK, but there inevitably comes a time when he has to face up to the problem he's created - a problem which is now so much greater because he's kept quiet about it, and which could have been avoided, if only he'd been upfront.
I even encountered one situation recently where the Contractor had actually spent the first 4 days of a contract on an induction course with a large client (clearly one which had internal communication problems), and it was only when he presented a timesheet for signature that it turned out the Client not only hadn’t signed up with the agency, but had no intention of doing so. To crown it all, the agency then tried to get out of paying not only in lieu of notice, but even for those 4 days on site!
At this phase, time for the Contractor is critical. If (s)he has a new contract which(s)he is lead to believe is certain, then (s)he not only stops looking, but declines any other leads (s)he has in the pipeline. If there is anything uncertain about the new contract for which (s)he is signing up, then (s)he needs and indeed (in my view) has the right to know about it. At least then (s)he can keep other options open.
Now, someone has to be the first to sign, and I don't have a problem in principle with the Contractor being the first to do so - after all, someone has to sign first! But what I (in common, I think, with most of the population!) do have a problem with is dishonesty.
I've looked at your contract; it required you to start on a particular date; the agency had the right to terminate on one month's notice, or on shorter notice during the initial 2 weeks (described as a 'probationary period'); the contract also provided that it would end if the 'client determines the contractor's assignment'.
What has happened here is that the agency have made clear to you, a couple of days before the start date, that the client hasn't signed up in the first place, and therefore that you won't be able to begin. The agency has contracted to provide you with the work specified in the contract, and is now saying that it can't do so. That is a breach of contract. You are therefore entitled to damages, so as to put you in the position in which you would have been, had the contract not been broken. You have the duty to mitigate your losses, and the agency's liability is limited by what it would have cost them, had they terminated the contract lawfully at the time of the breach. So let's put that lot together and look at it in the light of the contract.
The agency's right to terminate at short notice during the first two weeks (described as a 'probationary period) is in my view clearly limited to termination actually during that two weeks - so termination before that two weeks started is outside the scope of that right to terminate on short notice. And so far as the right to terminate if the Client 'determines the Contractor's assignment' is concerned, I can’t see that that arises, since the Client didn’t sign up in the first place. So on the face of it, you are entitled to one month at the contractual rate, in lieu of notice.
The duty to mitigate your losses means that you have to do what you can to keep the losses down, even though it ends up being the agency which ultimately benefits from this, rather than you. In this case you were able to extend your previous contract, and so you didn’t actually lose any working time. The rate was lower though, and therefore the end result it that you are entitled to be paid the difference between those rates for that one month period.
Moral: first, read the contract, and be quite clear about what the position will be if it is signed but doesn’t actually begin. Be satisfied that any terms governing this eventuality are (1) understood and (2) acceptable - negotiate changes if necessary, before you accept the commitment. Then, make sure you get a contract signed by both yourself and the agency in your hands at the earliest moment - fax should be fine.
Stay in touch with the agency (and, if possible, the Client) whilst waiting for the contract to start, and make clear that you want to know at the earliest moment if there is any doubt that the contract will in fact happen - particularly if the contract contains anything to suggest that it is anything other than unconditional. And don't let other leads grow cold until you know for sure.
6th August 1999
I'd really appreciate your feedback on this FAQ - so mail me and tell me what you think of it, if it's been useful to you, or let me know of any specific problem you have where I may be able to help.
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