When is a contract not a contract?

An 18 months contract becomes an 11 month contract unilaterally.

I presently have an 18 month contract through an intermediary with a very large (world's second biggest in its field) blue chip company.

Out of the blue, all contract staff have been told that in view of forthcoming legislation all contracts that were awarded for 18 months are now automatically 11 months and two weeks contracts. This is verbally with immediate effect.

When asked about a new contract with the new terms, the management reply was that the present contracts can be terminated at a month's notice by either side so no contract change is required. Whilst this is perfectly true, what on earth is the point of having a contract in the first place if this can happen?

Regards