BT cutting contractors' rates by a fifth and halving notice period because 'coronavirus' BT is slashing day rates for contractors and reducing their notice period by 50 per cent due to the unpredictable nature of the economy caused by the coronavirus. Tech freelancers-for-hire were informed of the changes by recruitment agencies on behalf of BT in recent days, and one engineer claimed the news had led to "general …
It's simply taking advantage of the fact that many contractors don't have anywhere else to go at the moment as an excuse to squeeze contract terms.
Then again after their recent price hikes, has BT's income taken a big hit? I changed earlier this year and not to the cheapest alternative.
"It's called "Supply and Demand", welcome to capitalism."
Nope, its taking the mick - contracts are of limited duration and unless the project gets cut the usual, traditional, mildly honourable thing to do is to negotiate at the contract end. Cutting early with across the board 20% cut isn't how you run contracts - I presume the staff are getting the same deal too?
@davcrav
"What happened to contractors deserving more money because they shoulder much more risk? This is the risk!"
You don't understand contracting one whit. We don't get paid more money. My company gets a charge-out rate which is necessarily different to paid staff. Permies rely on the the Company mothership to shield them, find them work, pay for their training, bid for them, sort out the legals for them, chase up payment for them, pay for their holidays, do their tax and sort out their VAT. Quite a bit of backside wiping goes on for you that you're blissfully unaware of.
Early termination of contracts does happen, but it's really rare - I haven't experienced this through my company in 23 years.
No sunshine, you don't understand how the uk works. We might draw up an agreement, sign it and pretend it's a great step forward but that doesn't mean we'll honour it for its duration. That's basically handing control of our borders to the EU!
They're just breaking the contract in a very specific, limited way you lefty pinko! Stop running down BT and have some pride!! The B used to stand for "British" you know!!!!!!
The alternative being that 20% of projects get cut and 20% of contractors get laid off entirely. In fact, probably worse, as those projects that get cut will have perms on which will be reassigned into the remaining 80% and release further contractors from there.
Given majority of these contractors won't be travelling anymore (or in some cases, having to rent rooms near the office), I'm sure that it's in realterms not as big a hit as first thought?
And your last comment - staff. You know that contractors are the first to go before staff - that's the point of it.
The alternative being that 20% of projects get cut and 20% of contractors get laid off entirely. In fact, probably worse, as those projects that get cut will have perms on which will be reassigned into the remaining 80% and release further contractors from there.
I'm not sure this is quite right. Beancounters cut costs whenever they see an opportunity. It's what they do. It's all they do. And they never stop doing it. Pandemic-related unemployment is an opportunity to cut labour costs.
BT's latest quarterly report, to June 2020 is pretty upbeat, and there is not much sign of projects being binned. Revenue £5,248m compared to £5,633m for same period last year. Ditto capital expenditure £927m, compared to £931m.
"Despite Covid-19, BT delivered a strong operating performance in the first quarter and delivered a relatively resilient set of financial results. We continue to invest in the long-term future of the business" etc etc
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"It's simply taking advantage of the fact that many contractors don't have anywhere else to go at the moment as an excuse to squeeze contract terms."
Well, yes. This is the nature of contract work. You can charge big fees when you are in high demand, but when there's low demand you can't. I'm surprised it's only 20%, to be honest.
Except those 'big fees' have been stuffed over by the likes of IR35 and while not prevalent at this time it is still a major problem. The article clearly says that they haven't had their duties changed so its not a case of low demand, this is a BT that I believe is terrified its about to be acquired by someone. Suppose as long as Piffle and his mates get their brown envelope it will likely be welcomed too, pretty much any thing with British in the title these days is usually far from it.
"The article clearly says that they haven't had their duties changed so its not a case of low demand"
You are looking at the wrong market. Demand for BT's service is holding up, sure, but demand for contractors is low. Thus the price drops until the excess suppply (i.e., people) clear the market (i.e., leave) and a new equilibrium is found. Once the job market starts to look better, rates will start to pick up as companies hunt for contractors. The flip side to being able to quit at will and take a new, higher-paying gig, is the opposite.
Obviously demand for contractors isn't low though. If it was, they wouldn't have cut their pay and notice they would have just cut them. This is all about what previous posters have said that BT are just pissing on the little guy, like the banks did, and reducing their costs but keeping the skills. Likely to cover the C-Level desire for either a superyacht or a spin on Virgin Galaxy. The idea of being able to quit at will is also a move that does get around and isn't something that should be done on a regular basis.
They menat demand for contractors in the general jobs market is low - hence BT thinks that they could get away with it. Hopefully enough contractors will move on to make them feel it, but I doubt it because the managers and bean counters never feel the pain of these sorts of decisions which is why its so easy for them to do. Its the middle and project managers who get to scrape the sh*t off of the walls.
No, the demand is low across the industry. The demand may or may not be low in BT but given the demand is low across the industry BT can lower the rates without the contractors jumping ship.
If demand for a particular position is low BT can cut that position via the notice period.
"reducing their costs but keeping the skills"
You know the contractors in question don't *have* to stay, right? If they're confident in maintaining their day-rate elsewhere, they're free to pursue that. The fact they probably won't means they probably can't. Mileage may vary etc.
"This is the nature of contract work"
It sounds more like breach of contract. In their position I'd be taking a careful look at contract terms, getting a legal opinion, reviewing how much in the lurch BT would be and then terminating ASAP, preferably with no notice at all. Then opening new negotiations.
"It sounds more like breach of contract."
It doesn't sound like that at all. If you have a contract that says 'one-month notice period, cash £x', I activate the notice period, and then offering a piece of paper saying 'two-week notice period, cash £x*0.8', you aren't forced to sign it, you can walk away.
>It sounds more like breach of contract.
No, there will be a termination clause in the contractors contract.
Compared to how one company I worked for in the early 80's, BT is treating its contractors well - at that company they shed a load of contractors, giving 24 hours notice; off-site the following day complete with termination payoff.
They're not changing the rate mid contract. They are ending it by normal means (notice period) and will then offer less if contractors decide to sign a new contract, which starts the day the current one ends.
No breach there.
Yes it's shit, but it's not illegal. And because the contract and job markets are dire right now, they can do it. They will find replacement for those who decide to not sign the follow-on contract.
The same shit is going to happen when the IR35 changes finally hit next year. (And for some it happend pre last April, which is when the changes were first intended to go ahead before the government decided to prioritise fucking up their Covid response first.)
Of course there will be. There'll also be a term stating the rate. Changing the agreed rate unilaterally is where the breach is.
Only if they try to change the rate without giving notice that they are terminating the current contract.
As sysconfig noted "Yes it's shit, but it's not illegal." provided they do things in the right sequence... It's what the legal profession call a "technicality".
If one side can change the terms in the middle of it without any recourse? I can understand when your contract term ends and is up for renewal saying "we will only renew at a 20% lower rate" but not "you have to take a 20% hit immediately". Who the hell signs a contract that allows one side to do that?
They are not changing in the middle without recourse. They are exercising the termination clause in the existing contract. They are then offering a new contract at worse rates. That's one of the risks of contracting and the the contractors are free to refuse the new contract or to try and negotiate alternate terms.
People reguarly do the same thing with mobile phone "contracts". Once they are out of the lock in period they can terminate the old contract in favor of a new contract with "better" terms, aka more free minutes, texts, data. It's exactly the same thing.
To the "contractors" at BT "4 weeks is not a contract, it's employment. Most contracts have at most a 2 week break clause. Typically 1 week, sometimes less."
Disclaimer: I'm a contractor (not with BT) and I have been contracting for many years.
This scenario can cut both ways. I contracted at one place that decided to terminate all contracts and re-instate them from a standardised renewal date and aligned all the notice periods etc. I took the opportunity to negotiate an increase in my day rate for the new contract.
When someone complained and said that I was doing the same work, I just told them it wasn't my idea to terminate my contract for no good reason, and you gave me an opportunity to re-negotiate. It's a question of timing. Similary another firm cut contractor rates by 10% across the board, I negotiated a 10% increase instead.
If BT have got their timing right they'll get away with this and not lose too many 'tractors. Considering the current jobs climate, I'm pretty sure people are going to be grateful to *have* a contract. Personally if I was at BT and my skills were in demand, I'd be asking for a longer renewal period than usual to offset the rate cut, but that's just me.
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"Do I re-negotiate my BT Broadband under the same terms?"
If there is a material change in the terms of the contract, then you should be able to break it, or at least that was my understanding.
"I have recently been migrated (against my wishes) to "Fibre down the street" it is a lot more tempremental with it being slow at peak times."
This sounds like a material detriment. Contact BT, make a complaint, and then if it isn't resolved, you might have a case to break your contract without penalty.
My father was told that he had to accept an upgrade from copper ADSL to Fibre to the Premises, because they were upgrading the exchange and could not offer ADSL anymore. The upgrade was "free" (although strangely he ended up paying more per month). He really didn't need it, he was a very light user.
He then had to move into a care home, and when we asked about moving his phone line into the care home (it's something they're prepared to do as long as it's in the same exchange), they said that he could not have FTTP in the care home (Huh? Wasn't the exchange being upgraded), and because they had to downgrade back to ADSL, this counted as a contract amendment, and Hey! that requires a 2 year minimum contract.
BT are quite happy about forcing contract changes when it suits them to the detriment of the other party.
It all became a bit moot, as he didn't live the two years minimum contract period.
is this not counter-productive based on the following logic?
Contractors now don't have a benefit to contracting so become permeant staff.
Company needs contractors for projects.
Less contractors equals higher price than before because there are a lot less of them because they aren't willing to take the risk this will happen again.
Not really, no. It comes down to market forces as a poster above stated.
There is less demand for contractors now, so they can get away with paying lower rates. When the market picks up again, they will struggle to find people and the rates will go back up again. People will switch from contract to perm, and some will switch back again. Depends on how tempting it is to take that risk, and when rates are high it's more tempting.
Oh yeah. I experienced them at a credit card company near Chester. Adecco decided to cut fees across the board instead of increasing contracted hours and then the client speed allowing contractors the same flex working at premier. Adecco claimed the client wouldn't allow them to talk to the contractors and this and then battened down the hatches and stopped responding to emails. A complete, incompetent shower of shit on many levels. I hope never to work with Adecco again as they are utterly inept and the worst bundle of agencies I have ever dealt with.
Nothing to do with Covid though, if anything demand for BT services must have gone up massively over the last 6 months.
However, Covid has screwed the contractor market (along with Brexit and IR35). so I'm not surprised BT are making this move. I guess the banks will see this and see if they can do one better. If they have any contractors left.
"We're going through a period of immense change and investment to build a better, stronger [companyName] for the future. As part of our business-wide modernisation programme, we are taking action to re-balance the fees paid to our professional services contractors, in a fair way"
Translation: A couple of our C-suiters want new superyachts.
Good luck getting any benefits even with the latest Sunak handouts if you are a company director of your own contracting company.
OTOH, if you are a permie and get laid off, you get the redundo package and Gubermint benefits.
The benefits of being a contractor in 2020 are exactly what?
What's that... silence.
Contractors do pay tax, they also pay insurance, their own training. You've never done that though have you. Just see the contractor as some kind of Reet-Smug with some actual skills. Maybe learn to understand contracting and their tax position before branding them as greedy. You really have no idea.
Contractors pay more tax overall than an equivalent permie, they also incur more costs and risks.
The payoff is that you get to use your company money as *you* see fit, and not some mandarin in Whitehall. Although those days are pretty much gone now, obv.
BT have had massive changes to terms and conditions of existing staff over the last few years that have resulted in pay cuts for some. They have also frozen salaries this year for managerial grades which includes most technies. They are also actively currently making people redundant, so this is hardly a surprise. Finally contractors in BT often have it fairly easy. Often working in the same role for many years, often working from home in very secure roles.
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The economy is tanking. Unemployment is going up and will continue to rise as companies tighten their belts to weather this. The natural corollary of all this is that demand for contractors will shrink and put them in a weaker negotiating position.
This is the entire point of contracting. Remember all the arguments of "I'm more expensive than a permanent resource because I take the risk of unemployment"? Well here's the risk realised. Walk if it's so painful and you're confident of maintaining your day rate elsewhere.
I recall the bitching around IR35 (some companies, the one I'm in particularly implemented it despite the deadline moving) as a manager of a number of contractors and the threats to walk - every single one of them is still here 6 months later.
BT have only cut contractors rates who are contracted via Pontoon.
BT are still employing contractors via another agency offering day rates above what the the Pontoon contractors where earning.
It's a bit of a farce.
I can only assume the other agency is via a managed service or work package contract.
BT will lose a lot of good contractors cutting day rates.
After all its usually the contractors who put in the long days and hundreds of hours each month.
Most perm BT employees are off line bang on 5pm everyday and have a lunch break.
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