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UK – RPO code of conduct criticized

03 August 2012

The Association of Recruitment Consultancies (ARC) claims that the recently announced code of conduct for recruitment supply chains and recruitment process outsourcing (RPO) published by the Association of Professional Staffing Companies (APSCo) “does not go far enough”, leaving second tier agencies at a disadvantage. However, APSCo said to Staffing Industry Analysts that the code offers a collaborative and transparent approach which will deliver results.

The voluntary code offers guidance on financial responsibilities and best payment practices. Second tier agencies dealing with a hirer that uses an RPO have to submit to “onerous payment terms including pay when paid provisions,” the ARC said.

It warned that even if the code is adopted it “does not require fixed period payment terms to be agreed, leaving a disadvantaged second tier agency in an uncertain position as to payment and exposed to more onerous finance terms. This gives RPOs an advantage over second tier agencies that many regard as divisive and unfair.”

The ARC now wants the RPO to be obliged in making payment to a second tier “regardless of receipt of funds from the client, in the same way that the second tier is already required by legislation to make payment to the workers concerned.” The association has been highlighting this issue in an ongoing campaign and asked the Government to review the situation.  

“Whilst the code gives the impression that this is something that has now been resolved, nothing could be further from the truth,” said Ben Grover, External Policy Adviser to the ARC.

“The code itself recognises the existence of the problem and our own evidence shows how disadvantaged second tier agencies are where there are no fixed payment terms. Whilst the industry has made some effort to create a code this cannot be as good as a change in the law. Currently payment regardless of receipt of funds is not compulsory for RPOs, the code in any event does not seek to make it mandatory and, in any event, some RPOs have not even signed up to it.”

But APSCo Director Marilyn Davidson said in a statement to Staffing Industry Analysts that the code had been carefully developed “to address funding issues for recruiters in the supply chain.  This it does very effectively and with due consideration to competition law.

“As you would expect from a trade association, our intention was not to restrict companies operations by dictating their commercial terms but to encourage an open and transparent approach by all parties in the supply chain, to the benefit of all concerned.  This approach, rather than adding to the legislative burden, creates a more collaborative and sustainable supply chain which will deliver results.”

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