RPO and 'pay when paid' clauses
Extending pay obligations imposed on employment businesses, to all businesses in the supply chain.
Campaign
2nd tier supply agencies that obtain work through vendors or RPOs will know the potential consequence of “pay when paid” clauses. The legal result of these clauses is that payment could be delayed, or even not paid altogether. This would not be so bad if it were not for R.12 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which requires the employment business that engages the worker to pay the worker regardless of receipt of payment from the client, forcing the 2nd tier to obtain finance wherever payment from higher up the chain is delayed. Finance is not easy to come by when faced with the indefinite payment obligation posed by “pay when paid”.
The solution is to extend the R.12 obligation to pay to the RPOs and others in the chain, by amending the regulation. Our campaign, which was launched in August 2011, is to persuade the government to do this in order to rule out the unfairness that currently exists and to encourage greater use of SME employment businesses by hirers and RPOs.
What can you do?
Very simply, support our efforts in this and other areas by joining us. We are here to support the industry.
For more information contact ARC on 01273 777997.