egos® -contract breakers

Contract-breakers

This page is intended to be a resource of information for reference by Contractors.

It is intended to record, for the benefit of the Contractor community, end clients who have unilaterally imposed rate cuts mid-contract.

Background

In December 2011 I was asked by a journalist contact of mine (Moore News Ltd) writing for Contractor UK to comment:

A growing number of banks and financial institutions are cutting the pay of IT contractors. So-called ‘take it or leave’ rate reductions are in place at a sizeable chunk of financial employers including Lloyds, UBS and JP Morgan. Today we understand that Goldman Sachs has followed suit, effectively telling its IT contractors to reflect a 15% pay cut or leave. … One of the investment banks says its rate reduction is mandatory, using the words “non-negotiable” on the memo informing contractors of the pay cut.

My reply was incorporated in a contractoruk.com article published 20^th December.

How to report a contract-breaker

If you as a contractor have ever been the victim of a mid-contract enforced rate cut, email contract-breakers@egos.co.uk and tell us:

1 name of end client

2 date of enforced rate cut

3 % cut required

4 any other comment you wish to share

The details will be incorporated in the table below.

If your rate cut was on a renewal, that doesn’t count, so don’t tell us about that – we’re only accumulating data on enforced rate cuts which breached a contract. And if it didn’t happen to you, don’t tell us either – we don’t want to base the table on hearsay evidence.

This table

The following enforced rate cuts have been reported to us.

Contractors may wish

- to take this information into account in the future when deciding whether or not to accept an offered contract, and

- to take their perception of the risks of future enforced rate cuts into account when deciding an acceptable rate.

End Client	Date of enforced rate cut	Amount of reduction (%)	Notes
BarCap	2-12-11	10%	‘This happened a few years back as well, again just before Christmas … there was also a requirement at BarCap to take an additional 10 working days off before Christmas’
BP	Mach 2009	10%	‘…people were pretty angry and most said they'd walk if BP were to try it again. It really broke the bond of trust between the company and its contractors and my feeling is that it was probably counterproductive overall.’
BT	12-9-01	10%	Many organisations got onto this "cost saving" bandwagon on what became known as a "good day to bury bad news". After reluctantly accepting the 10% rate cut (on what was an already low rate), I subsequently had my contract terminated (with immediate effect) whilst on October half-term holiday break!! This came completely "out-of-the-blue". In 25 years of contracting, BT still easily remain the worst client for whom I have ever worked.
Goldman Sachs	1-1-12	10% (indirect reports have suggested up to 15% - can anyone confirm please?)	‘I declined the new terms and being terminated as a result.’
HSBC	19-12-11	10%
JP Morgan	1-1-12	10%	‘…in early December we were all told that our rates were to be cut by 10% as of Jan 1st 2012. 'Take it or leave it.' They timed it knowing that, economic climate aside, we would not be able to find new work for some time, due to the time of year… Obviously I am looking for a new role and have no loyalty to my client. I am on a day rate and regularly worked more than my 8 hours before. My 10 hours a week unpaid overtime stopped when I was given the ultimatum. I no longer work late to finish something off. I will not implement anything that I am not contractually obliged to implement, it isn't in my contract to improve their business. They are no longer paying for my ideas. They took 10% off me, but they get more than a 10% loss of morale. The insult is that these companies announce massive profits. JPMC announced profits just prior…’
Lloyds Banking Group (LloydsTSB and HBoS)	1-1-12	10%	‘together with an enforced two week break from 19th December to 3rd January’
Nationwide BS	January 2012	10%	‘Nationwide Building Society are implementing a forced 10% rate cut … I have only been given 5 days to accept’
Nationwide BS	January 2012	10%	‘Nationwide Building Society extended the contract to end July 2012, then two weeks later sent a rate cut email, applicable to all contracts. To cap it all, I had just turned down a higher paid contract in order to honor the contract with NBS and complete the work on the Programme. Emails for the last two quarters have reported growth in NBS profit!! The contract rate was already £xx less per day than the NBS standard rate for the role’
Nationwide BS	January 2012	10%	I am at Nationwide Building Society and have just very reluctantly accepted the 10% rate reduction (after 5 days notice as described already).
RBS	September 2011	10%	Understood to be on all staff engaged through Hays (hearsay only at present – can anyone confirm please?)
TfL	July 2009	10%	‘I declined and walked, as did the rest of the team’

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This page was last updated on 19^th January 2012.

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