the contractor pilot is an employee of their own company and it is that company that is contracted to the carrier to provide the services it provides.
Up until recently that is exactly what some of my employees were, ltd companies, until that is I was advised by people who know much more about these legalities than you or I that this was an unlawful position to be in.
I am not going to debate this any further as there is no point and I will gladly admit that I am not a legal professional.
My opinion still stands however, the OP has ended up with a raw deal, we can slate him all night long for what may have been a mistake in signing his contract, but to all of you that seem to revel in harsh opinions on this, haven't you ever made mistakes?
I know I have and was glad of the support when I found myself in a pickle, he/she has had the guts to post their situation to warn others, and yet so many people seem to want to shoot this person down for it???
May I ask, if you were face to face with the OP, would you be so scathing? Probably not, all too happy to hide behind anonymity.