Contractors could be set to get a boost over late payments, with a potential new law making it easier for contractors to take legal action when they are paid late.
According to recent reports the government is currently in the process of drawing up new legislation. It would allow trade bodies to pursue injunctions on behalf of contractors.
This would give greater power to contractors. An employer can be efficient when it comes to payment for contract work, delaying where possible.
If that is not the case, they risk a legal challenge at the High Court. This is of course something organisations aren’t particularly keen on when possible.
This rumoured legislation is coming off the back of the recent Carillion scandal. The benefits, including late payments, would filter down and be of use to personal service company contractors.
Late payments boost
A report from The Times hints at a contractor’s representative group being able to lead the legal case. So, hypothetically, if a number of contractors working for a company weren’t paid quickly enough for their services, a group such as IPSE could take up the mantle on their behalf.
The report also points to individual contractors not having to go through the rigmarole of even making a court appearance.
The Carillion scandal has certainly hit the headlines of late. One revelation from its fallout is that some subcontractors were told to wait an unreasonable length of time – 120 days namely – for payment for their services.
The Labour party, who have brought this up before, has been quick to highlight the 120 day issue seen as part of the Carillion scandal, and has been welcomed by organisations such as the Federation of Small Businesses.
Granted, much of this is for large-scale contracts such as those that comprised the Carillion deal.
But contractors working as PSCs could soon be able to benefit from the fallout. It is pleasing to know that if securing payment proves difficult, the law could soon be more in their favour.