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So were you advised verbally by either the agency or the employer of the increase?
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Whilst the contract they issued can be argued to be legally binding, if there was a genuine mistake then they will have the right to correct that if needed. Errors do happen and the law does allow parties who have made a mistake to rectify that if needed. How strong their case would be depends on various factors such as whether they can show this was indeed an error, how soon after the error they identified it and took steps to rectify it etc. It looks like they did not waste much time in rectifying this so this is likely to go in their favour. What they have said about terminating your employment is actually correct though – even if you were to push them to accept the new rate, they can immediately give you notice to end your contract and whilst they will then have to pay your new rate for the notice period, once the contract ends you will no longer have any right to claim that or even work for them any longer. So be careful how much you push them – your rights as a contractor are not great and you have no protection against termination so they can very easily terminate this new ‘wrong’ contract. I would say see if they call your bluff on quitting and perhaps you can negotiate something but you cannot really take any legal action apart from maybe if they serve notice and they do not pay the new rate for that notice period.
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