Contractors’ Questions: Can my signed contract rate be reduced?

Contractor’s Question: The recruitment agency I use claim they made a mistake with my rate, and 5 weeks into the contract, they want to reduce it. I advised them that the contract we signed, detailing my current pay, stands. They have responded by saying they never counter-signed the contract. Legally, would a solicitor say the agency has a leg to stand on?

Expert’s Answer: From what you say, it appears that the contract rate was set out in a written document that you signed but the agency never counter-signed. It also appears that you have been working for 5 weeks under the contract.

It does not matter that the agency never counter-signed the contract. The fact that there was a contract and you started working under that contract means that the rate in that contract is binding, unless they can show that you knew it was a mistake before you started working.

Legally, the only way the contract rate can be reduced is if the contract has been varied. Both you and the agency must both agree to vary the contract for this to be the case.

Your options are as follows:

1.     Refuse to agree to the reduced rate. The risk here is that the agency will terminate the contract (but they can only do so in accordance with the terms of the agreement).

2.     Agree to the reduced rate. You should state when you agree for the reduced rate to start. I suggest that this should be the same as the period stated in the contract for them to terminate the contract.

If you need to speak to a solicitor about responding in more detail, please get in touch.


The expert was Gary Cousins, solicitor and co-founder of Cousins Business Law.

Wednesday 16th Feb 2011