Contractors' Questions: Do I have grounds to renegotiate?

Contractor's Question: I recently landed a contract role through an agency and accepted the daily pay rate via a job confirmation email. However I have not yet signed an official contract despite working at the client site for several weeks. I now want to re-negotiate the contract, but the agency is signalling the rate will not be increased, even though the contract is being advertised with different agencies at a rate which is 20% higher than mine.

Additionally, according to the agency regulations of 2003, the agency should offer and receive a signed opt-out declaration before the contractor is introduced to the client, but I have not yet signed the opt in/out declaration, and have already met the client. Where do I stand in terms of the contract and do I have any bargaining power to increase the daily rate?

Expert's Answer: My reading of the rules you point to is that, if no opt out has been agreed then the Conduct of Employment Agency Regulations are likely to apply. This means that the agency should, amongst other things, have provided you with terms setting out the points in sections 14 and 15 of the regulations – i.e. terms setting out rate of remuneration, how often this is paid and whether the agency is an employment business or employment agency. If these have been provided and accepted then it seems there is likely to be a binding contract, notwithstanding the failure to opt out, and I suspect you are likely to find it difficult to renegotiate the terms of that contract.

Only if these terms have not been provided and accepted does there seem to be a breach of the regulations. It would not automatically follow that the current arrangement is unenforceable, but this breach could be used to negotiate an increase in rates when the information is provided or to terminate the existing contract.

The expert was Richard Nicholas, a lawyer in the technology practice at Browne Jacobson.

Editor's note - Further reading:
Am I entitled to a rate rise?
Beating the IT contract crunch iii) - pressure points
 

Thursday 29th Jul 2010