It is “ironic” that Labour has now called for the practice of paying to remain on a preferred supplier list to be outlawed when it is something the recruitment sector has battled with for years, says the Association of Professional Staffing Companies’ (APSCo’s) head of external affairs and compliance Samantha Hurley.

Following a BBC report that Premier Foods allegedly asked suppliers for payments to remain on preferred supplier lists, Labour shadow business minister Toby Perkins called for the practice of such payments to be banned.

Perkins wrote to business innovation and skills minister Matt Hancock to ask whether, in light of the Premier Foods report, the government would back Labour's plans to outlaw this practice and ensure fairness for suppliers.

He called it an “egregious and unfair practice” and said it “flies in the face of fair and competitive markets”.

The letter comes just weeks after the government failed to back Labour's amendment to the Small Business Bill, which would have implemented this.

Following the BBC report, business secretary Vince Cable, in writing to the Competition and Markets Authority, labelled the practice “wrong” and said he was concerned it was becoming commonplace.

Hurley told Recruiter it was “ironic” that such a tough stance was being taken “on something that is affecting the food industry, when the recruitment sector has been suffering from this for years without the government batting an eyelid”.

She said there had been a long history of end clients demanding volume discounts in exchange for being added to a preferred supplier list, “which in my view is exactly the same as asking for payment”.

APSCo had already seen “plenty of examples” of end clients imposing unreasonable payment terms on the supply chain.

Brabners senior associate Simon Bloch, who specialises in recruitment law, told Recruiter there is nothing among employment regulations “which addresses the situation of a hirer charging the employment business a fee, for example for being on its panel of suppliers”.

Hurley said: “While obviously we support any action which imposes unfair terms on organisations, it would be nice to feel that the recruitment sector was at front of mind when these issues come to light – rather than at the back.”

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