OPERATING CONDITIONS - PART VII

PROVISIONS RELATING TO PAYROLL FINANCE CLIENTS ONLY

  1. DEFINITIONS AND INTERPRETATION

    1. In this Part, unless the context otherwise requires, the following expressions shall have the following meanings and any capitalised terms not defined below or in Part I have the meaning set out in Part VIII and Part X:
      “Payroll Invoices” Invoices arising from the supply of Temporary Workers.
      “Permanent Placement” any individual identified by you as having the necessary skills and experience to fulfil a vacancy with a Customer who is offered a contract of employment by a Customer after having been introduced by you.
      “Permanent Staff” any individual employed by you in the management or administration of your business.
      “Temporary Workers” individuals or companies who are at any time employed or engaged by you and supplied to Customers in the UK other than on a permanent basis.
      “VAT” value added tax
      “VAT Reserve” for any VAT period, a Reserve calculated as the aggregate of the output tax on your Payroll Invoices raised in that period less input tax charged by:

      (i)  us for our services;

      (ii) companies engaged as Temporary Workers.
    2. If the applicable Operating Conditions for this Payroll Finance Facility include Parts I, II and IV, then this Facility will be provided on the basis of a Factoring Facility as varied or supplemented by the conditions set out below and those provisions which apply to Factoring Clients will apply to you.
    3. If the applicable Operating Conditions for this Payroll Finance Facility include Parts I to IV (inclusive), then this Facility will be provided on the basis of an Invoice Discounting Facility as varied or supplemented by the conditions set out below and those provisions which apply to Invoice Discounting Clients will apply to you.
  2. NOTIFICATION, INVOICE CLASSIFICATION AND APPROVAL LIMITS

    1. You will advise us of Payroll Invoices by submitting Time Sheet Data through the Website, or such other means as we shall agree with you from time to time. Time Sheets must be submitted to us by facsimile to the number we advise you for this purpose or by such other means as we may agree from time to time and condition 12.1 of the Operating Conditions – Part II – Provisions relating to all Clients is varied accordingly.
    2. We will Approve and will not subsequently Disapprove, save as provided in condition 2.3 of these Operating Conditions - Part VII, all Notified Payroll Invoices within a Protected Limit.
    3. In addition to those Invoices referred to in condition 2.3 of the Operating Conditions - Part II, we may also Disapprove any Notified Invoice:
      1. which is not a Protected Invoice;
      2. which, when added to all other unpaid Invoices owing by a particular Customer, exceeds the Protected Limit or any greater Approval Limit notified by us to you;
      3. which is not a Payroll Invoice, unless we have agreed to make Advances in respect of such Invoices when the other relevant parts of this Agreement shall apply.
  3. PAYMENTS

    1. We will pay you in Sterling only (unless otherwise agreed by us) the Purchase Price for your Approved Payroll Invoices by:
      1. paying the Payroll Costs as your agent and on your behalf, although we may refuse to meet the Payroll Costs if there is insufficient Availability; and
      2. paying the balance of any Availability arising from Payroll Invoices to you by CHAPS once each week (there will be no transmission charge for this transfer and condition 6.9 of the Operating Conditions - Part II - Provisions relating to all Clients is amended accordingly).
      All such payments will be treated by us as Advances and condition 3.2 of the Operating Conditions - Part II - Provisions relating to all Clients shall be varied accordingly. If we start this Facility before we have received your VAT registration number, we will not be obliged to pay the balance of the Availability (referred to in condition 3.1.2 above) to you until we have received that number and any other evidence we require to show that you are registered for VAT.
    2. The only Reserve we will apply to your account is the VAT Reserve.
    3. We will, after the end of your VAT period but before you have to make a VAT payment to HM Revenue and Customs, pay to you an amount equal to the VAT Reserve less:
      1. any other sums due to us from you; and
      2. the value (including any output tax) of any Invoices we reasonably believe will not be paid in full.
    4. You are responsible for making all necessary and appropriate VAT returns to HM Revenue and Customs on or before the due date for making such returns and are responsible for accounting to HM Revenue and Customs for any VAT owed by you. For the avoidance of doubt, we have no direct liability or obligation to HM Revenue and Customs in relation to settling any VAT owed by you nor does HM Revenue and Customs have any rights in relation to the VAT Reserve.
  4. OUR SERVICES

    1. We will as your agent and on your behalf:
      1. provide the Payroll Service described and on the terms set out in the Operating Conditions - Part VIII;
      2. arrange Debtor Protection up to the Protected Limit (on the conditions set out in the Operating Conditions - Part X) for each Customer (other than any Excluded Customers), advise you of the Protected Limit for each Customer and any changes to it from time to time;
      3. pay the Payroll Costs (subject to there being sufficient Availability);
      4. once we have received the Time Sheet Data and corresponding copy Time Sheets from you, generate Invoices (based on the information in that Time Sheet Data);
      5. if agreed by us, on receipt of all appropriate information, generate Invoices arising from Permanent Placements;
      6. unless this Payroll Finance Facility is undisclosed, include a statement on each Invoice raised by us that the Invoice has been assigned to us (which you hereby authorise us to do); and
      7. send those Invoices (together with copy Time Sheets, in the case of Payroll Invoices) to your Customers (in which case condition 8.3.3 of the Operating Conditions – Part II – Provisions relating to all Clients does apply). If we agree that you will generate and issue all or any Invoices then condition 8.3.3. of the Operating Conditions – Part II – Provisions relating to all Clients will apply to those Invoices.
    2. If you do not fulfil your obligations in this Agreement (including, in particular, providing Timesheets to us within the timescales set out in the Operating Conditions - Part VIII – Payroll Service Conditions and dealing with any queries or discrepancies raised by us on it) then (as appropriate) we will:
      1. not pay the balance of any Availability to you as contemplated by condition 3.1.2 of these Operating Conditions - Part VII; and / or
      2. not be obliged to provide the services listed in condition 4.1 of these Operating Conditions - Part VII and/or only provide those services to the extent that we are able to do so based upon the information supplied by you.
    3. We may, at your request and for an agreed fee, in relation to your Permanent Staff:
      1. provide the Payroll Service on the terms and conditions set out in the Operating Conditions - Part VIII - Payroll Service Conditions; and
      2. on your behalf and as your agent, pay the Payroll Costs of those staff from any Availability arising under either this Payroll Finance Facility or any other Facility we have made available to you.
  5. YOUR OBLIGATIONS

    1. You will:
      1. comply with all applicable laws relevant to the placement of Temporary Workers and Permanent Placements including, without limitation, the Conduct of Employment Agencies and Employment Business Regulations 2003 as amended by the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2007 and as amended by the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010;
      2. not enter into a contract with a Customer giving payment terms in respect of any Payroll Invoice greater than 30 days from the date of the Invoice, without our written consent;
      3. promptly forward to us all documentation and information required to enable us to raise any credit notes properly due to a Customer in relation to any Invoice raised by us on your behalf; we may raise and issue such credit notes or refuse to raise and issue them as we see fit and condition 9.1.6 of the Operating Conditions – Part II – Provisions relating to all Clients does not apply in these circumstances but will apply in relation to any Invoices you raise yourself;
      4. request a Protected Limit for each Customer and not provide Temporary Workers to any Customer until we have told you its Protected Limit;
      5. procure that all Payroll Invoices owing by a Protected Customer are within that Customer’s Protected Limit;
      6. be registered for VAT by the Start Date and remain registered for VAT throughout the subsistence of this Agreement;
      7. inform us of any change in your terms with your Temporary Workers or Customers and obtain such waivers or variations to such terms as we shall reasonably require;
      8. inform us of any dispute with a Temporary Worker;
      9. inform us if you cease to be registered for gross payment under the Construction Industry Scheme or if you receive any notification or correspondence from HM Revenue and Customs that may indicate withdrawal of or amendment to that registration.
    2. You will not, without our prior written consent, provide Temporary Workers to a Customer until we have advised you of the Protected Limit for that Customer or, if greater, its Approval Limit.
  6. FEES AND CHARGES

    1. If the Commercial Terms in relation to this Payroll Finance Facility refer to you paying a Payroll Finance Service Fee only, that fee will be calculated as the percentage stated in the Commercial Terms of the Notified Value of each Payroll Invoice Notified to us on the Start Date and thereafter throughout this Agreement. The Payroll Finance Service Fee will be charged to your Current Account weekly in arrears. The Payroll Finance Service Fee will not be reduced if the Net Value of a Payroll Invoice is less than its Notified Value. Conditions 6.1, 6.2, 6.3 and 6.4 in the Operating Conditions - Part II – Provisions relating to all Clients shall not apply to you and the calculation required by condition 6.5 shall be done disregarding the references to net Discount Charge and replacing all references to the Service Fee with the Payroll Finance Service Fee.
    2. The Payroll Finance Service Fee has been agreed on the basis of the Base Rate on the date of this Agreement. Save as follows, each increase or decrease (by one or more steps) in that rate by one whole percent will trigger an increase or a decrease in the Payroll Finance Service Fee of 0.1%. For the purposes of this provision;
      1. a reduction in the Base Rate to below 1.5% will not trigger a change in the Payroll Finance Service Fee; and
      2. if Base Rate is below 1.5% on the date of this Agreement, the Payroll Finance Service Fee will increase when Base Rate increases by one percent (or more) to 1.5% or more.
    3. If we have agreed to charge you a Service Fee (or a Minimum Fee) and a Discount Charge, then, condition 6 of the Operating Condition - Part II – Provisions relating to all Clients will apply to you.
  7. DISAPPLICATION OF CERTAIN CONDITIONS

    1. Conditions 4.8.1, 4.8.3 and 8.3.13 of the Operating Conditions - Part II - Provisions relating to all Clients do not apply in respect of Payroll Invoices.

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