A new plan aimed at encouraging large companies to make their payment practices public was welcomed by a recruitment body whose member firms place contractors.
Although the Association Recruitment Consultancies said this is a step in the right direction, they added that there is still more to be done.
As ARC’s chairman Adrian Marlowe said, larger organisations have been putting pressure on suppliers to make them accept lengthy payment terms for services provided. Furthermore, such lengthy terms have not been adhered to, thus leaving the supplier caught between waiting for overdue payment and enforcing the agreed terms.
Marlowe highlighted how harsh the consequences of delayed payment can be for the lives of workers, which is why ARC would like to have a stronger regulation of this problem.
Taking firm action would represent exercising their rights under late payment law for suppliers, but surprisingly enough they are not currently very willing to do it, as they are afraid of upsetting or losing the commercial relationship.
ARC’s view is shared by PCG’s trade body of contractors, who declared that the incoming measures have been encouraging but not satisfactory.
As PCG’s director of policy Simon McVicker asserted: “In order for it to be effective, the Prompt Payment Code must be compulsory for large companies and it must include sanctions for the worst offenders”.
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