Consultants and contractors could face double the standard payment terms on new Rok contracts.
Concerns have been raised since Rok plc was reported to have doubled its standard payment terms for subcontractors and consultants.
According to a letter seen by the Forum of Private Business (FPB), Rok plc has extended its standard payment terms from 30 to 60 days for all new contracts, with effect from the 1 July.
The letter was sent on 22 June this year, and said that if it was not refuted in writing within seven days of its receipt the change would be “deemed effective”.
Rok confirmed that the company had extended its payment terms but said that the letter was sent out in error and was not of the ‘usual Rok language’.
A spokesperson for Rok said: “Clearly it is not in our interests to upset or disadvantage our supply chain partners…which is why no changes are being made to existing arrangements and why the terms for all new arrangements will be made clear from the outset.”
Phil McCabe, media officer for the FPB, was unconvinced, stating that companies such as Rok had a responsibility to smaller businesses facing the pinch in the light of the economic downturn.
McCabe said: “I’m not without sympathy for bigger companies like Rok, but they do have a responsibility to the smaller companies in their supply chain. To effectively say that they have no choice in the matter is simply not true.”
According to McCabe, one FPB member who wished to remain anonymous said the decision would put smaller businesses in a no-win situation where speaking out could cost them work, and that many businesses would suffer in silence to avoid rocking the boat.
The FBP member said: “The company has said that these terms and conditions will apply unless there are objections to them, but in reality how can you stand up to a business of Rok’s size?”
FPB research carried out at the end of 2008 showed that almost a third of small businesses were owed between £1000 and £5000 at any one time. In addition, 88% said they were not being paid within contractually-agreed periods and 72% said that the problem had a ‘serious' or ‘very serious' impact on their businesses.
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