IT contractor lawyer attacks rate-cutting banks

A lawyer for computer freelancers is taking a stand against banks who threaten to terminate such temporary IT professionals if they refuse to drop their contracted pay rate.

Roger Sinclair, of Egos, says he will keep track of end-users who, regardless of the payment terms in place, unilaterally force rate cuts on those IT workers he regards as his clientele.

To be fed by victims sending him details (in confidence) to a dedicated email account, the resulting “contract-breakers” database could ‘name and shame’ clients into better behaviour, the lawyer hopes.

“I have a serious problem with the way certain end-clients, particularly banks, seem to regard it as commercially acceptable to impose unilateral rate reductions on contractors, many of whom are my own clients”, Mr Sinclair said.

“If you enter a contract, then you should honour it - and in return for that, you should be entitled to expect the other party to do likewise. To my mind, that applies equally to contractors, agencies and end-clients - even banks.”

In reflecting on a newly announced 15% rate cut at Goldman Sachs, one IT contractor sounded supportive.

 “The point of a contract is to ensure that both parties know what they are getting into, and so protect them from insecurity”, the CUK reader agreed. “Unless you really are doing your job very badly; there is no justification for a cut like this.”

Recruitment agents, too, will no doubt be interested in Mr Sinclair’s envisioned database and, with the identities of its contributors known only to the lawyer, may populate it with up-to-date information.

Bernie Potton, founder of IT recruitment firm SQ Computer Personnel, underlined the sheer unfairness of mid-contract ‘take it or leave’ rate cuts – for both agents and contractors alike.

“[We] will always take a percentage hit in commission equal to that of the contractor”, he explained in a statement. “In the past, [contractors] have left [the end-user] as a result of rate cuts.

“Some then went on to work for a company which hadn’t yet implemented a rate reduction, only to be hit with an equal or larger reduction a few weeks later.”

However one financial end-client to IT contractors, who declined to be named yet has cut rates mid-contract and across the board, didn’t offer much to convince them to stay put.

It said it couldn’t say where in its operations it planned to take on more IT contractors, if at all, though it has told such “contingent” workers that the group “remains committed” to them.

Egos, with 15 years’ experience advising contractors on legal issues, reflected: “It's time for contractors to share the names of the contract-breaking end-clients who have acted in this way, and to aim to steer clear of [their] future contracts with the contract-breakers.  

“It would take time, but I suspect that if enough contractors were to do this, the contract-breakers might begin to learn that they are not immune - that there are consequences for them too, in terms of a smaller pool of contractors willing to work for them.

“I shall start collating a database of the contract-breakers. If you've been a victim of a mid-contract rate cut, either recently or in the past, send a brief mail to contract-breakers@egos.co.uk and tell me end-client name; date of forced rate cut and percentage reduction.”