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Graham1967
24th February 2017, 17:01
Unite demands government outlaws umbrella companies
24 February 2017
Unite, the country’s biggest union for construction workers, has called for umbrella companies to be outlawed after a BBC report exposed how construction workers are falling victim to wage theft.

The union made its demand after BBC Look North today (February 24) carried an expose on how workers operating via umbrella companies in construction and other sectors are having huge deductions taken from their pay.

Umbrella company workers have to pay employers’ and employees’ national insurance contributions as well as income tax, a tax rate of 45.8 pence in the pound on eligible earnings. Workers often have their holiday pay rolled into the rate, meaning they are unpaid when taking leave. If they pay into an auto-enrolment pension they have to pay both employee and employer contributions. Umbrella company workers have to pay a fee of around £20 a week to be paid in this manner.

Unite have recently established a bogus self-employment unit to step up their support of members who are being denied basic employment rights. The unit is also targeting umbrella companies.

Acting general secretary, Gail Cartmail, said: “Umbrella companies are highly immoral and rip off workers. The government need to end the misery of umbrella company workers by outlawing this practice and all forms of bogus self-employment.”

“Unite has already succeeded in outlawing umbrella companies for example on Hinkley Point. The Scottish and Welsh governments and several local authorities have introduced measures outlawing umbrella companies on public sector contracts. If the government fails to act we will step up pressure on all public and private sector organisations to ban these sinister organisations.”

“The message is loud and clear Unite are coming for rogue employers who increasingly rely on false self-employment. We will leave no stone unturned in exposing the blatant unfairness of umbrella companies, ending exploitation and getting justice for our members.”

The government has previously estimated that 430,000 workers are paid via umbrella companies. Unite believes that this figure is an underestimate as unscrupulous employers in sectors such as logistics, supply teaching and pharmaceuticals are increasingly using this form of employment.


ENDS

Notes to editors:

The huge growth in umbrella companies operating in construction began in April 2014. This was a result of government legislation which attempted to outlaw employment agencies from bogusly self-employing construction workers. Overnight the industry moved to the umbrella company model in order to avoid paying employer’s NI contributions.

For more information please contact Unite communications officer Barckley Sumner on 020 3371 2067 or 07802 329235.

Email: barckley.sumner@unitetheunion.org

- See more at: Unite demands government outlaws umbrella companies (http://www.unitetheunion.org/news/unite-demands-government-outlaws-umbrella-companies/#sthash.qGRZpZOY.dpuf)

DotasScandal
24th February 2017, 17:13
The huge growth in umbrella companies operating in construction began in April 2014. This was a result of government legislation which attempted to outlaw employment agencies from bogusly self-employing construction workers. Overnight the industry moved to the umbrella company model in order to avoid paying employer’s NI contributions.

Eerie echoes of "the huge growth in contractor schemes" as a result of IR35 - complete with slew of unintended consequences.

bobspud
24th February 2017, 17:19
Eerie echoes of "the huge growth in contractor schemes" as a result of IR35 - complete with slew of unintended consequences.

Yes this :(

eek
24th February 2017, 17:22
Yes this :(

Unite's viewpoint is if you employ someone you put them on payroll....

You can't offload the problem to whatever solution hasn't been explicitly banned yet which is what those employers are still doing...

sal
27th February 2017, 10:08
Giving the fact that the majority of the current ltd. contractors that decide to stay in the PS inside IR35 are going to switch to Umbrella, it will be fun times if the unions fight to ban them :popcorn:

northernladuk
27th February 2017, 10:11
Love to see Len and Lucy from ContractorUmbrella in a room dooking it out :ladybags:

:popcorn:

eek
27th February 2017, 10:13
Giving the fact that the majority of the current ltd. contractors that decide to stay in the PS inside IR35 are going to switch to Umbrella, it will be fun times if the unions fight to ban them :popcorn:

The unions are fighting to ban them. And the stories to come in April and May of people forced to use umbrella companies will make the case for them.

SimonMac
27th February 2017, 10:15
Nothing new, they have been saying this since at least 2014

https://www.tuc.org.uk/industrial-issues/ucatt-unite-lobby-parliament-against-umbrella-companies

Just goes to show all trade organisations are useless it seems, not just.....

eek
27th February 2017, 10:50
Nothing new, they have been saying this since at least 2014

https://www.tuc.org.uk/industrial-issues/ucatt-unite-lobby-parliament-against-umbrella-companies

Just goes to show all trade organisations are useless it seems, not just.....

Yep but this is in reaction to the BBC reporting on it - which is a nice start for the hot potato this story will become in late April early May....

sal
27th February 2017, 10:50
The unions are fighting to ban them. And the stories to come in April and May of people forced to use umbrella companies will make the case for them.

Exactly, and if successful it will force these people into ClientCo/Agency payroll, closing the gap between contractors and employees even further. With the next stage being for employees to scream how someone doing the same job is getting paid more and contractors screaming how they are being paid/taxed as employees but don't have rights to sick pay/paid leave/maternity leave.

LondonManc
27th February 2017, 10:52
Love to see Len and Lucy from ContractorUmbrella in a room dooking it out :ladybags:

:popcorn:

You're a proper Yorkshire lad if you want to see a man hit a woman. :eyes

I'd prefer to see a considered response from Lucy or another umbrella person to the OP's article.

northernladuk
27th February 2017, 10:57
You're a proper Yorkshire lad if you want to see a man hit a woman. :eyes


I have a funny feeling that isn't how it's gonna turn out ;)

Unless of course Lucy is the man in that analogy making you are next in line when she's done with Len...

LondonManc
27th February 2017, 10:58
I have a funny feeling that isn't how it's gonna turn out ;)

Unless of course Lucy is the man in that analogy making you are next in line when she's done with Len...

I've not met Lucy but I'm now in a strange place between fear and arousal.

breaktwister
27th February 2017, 13:34
"The government need to end the misery of umbrella company workers by outlawing this practice and all forms of bogus self-employment.”

“Unite has already succeeded in outlawing umbrella companies for example on Hinkley Point. The Scottish and Welsh governments and several local authorities have introduced measures outlawing umbrella companies on public sector contracts. If the government fails to act we will step up pressure on all public and private sector organisations to ban these sinister organisations.”



If one exams the onerous tests placed upon the relationship between an end-client and a contractor for purposes of IR35 and then apply those same tests to an umbrella company and its "employees" the total sham of these organisations becomes clear. The relationship between the umbrella company and its "employees" is not one of employer-employee, there is no SDC etc. It is a sham arrangement but one which HMRC approve of as they do not want self-employed individuals or small companies taking income as business revenue; they want it all taxed as employment income. If these umbrellas were not a tax maximising vehicle for HMRC you can be sure they would not exist today.

northernladuk
27th February 2017, 13:37
If one exams <gave up here>.

(yawn)

LondonManc
27th February 2017, 13:55
(yawn)

The second half of the paragraph was actually a decent speculation.

eek
27th February 2017, 14:08
The second half of the paragraph was actually a decent speculation.

+1. The second half of the argument is valid.

The issue is I think the one I mentioned earlier, its the figures placed in adverts that is the problem here - except for explicit b2b transactions job adverts should exclude umbrella fees and Employers NI agencies and end clients should not be quoting things that you will never get to see if you looked at a wage slip...

LondonManc
27th February 2017, 14:37
+1. The second half of the argument is valid.

The issue is I think the one I mentioned earlier, its the figures placed in adverts that is the problem here - except for explicit b2b transactions job adverts should exclude umbrella fees and Employers NI agencies and end clients should not be quoting things that you will never get to see if you looked at a wage slip...

I think the other problem is the lack of understanding (or indeed differentiation) by HMRC/HMG that there are types of jobs that lend themselves more to contracting and those that are of a more permanent nature. While their intention is potentially to actually push all jobs towards permanent positions with the client paying business NICs as part of a full "normal" permie engagement, the reality is that the client has no appetite to take on a specialist for a project role on a permanent position to only make them redundant a year or so later. Similarly there would be no appetite on behalf of any but the most desperately skint specialist to take such a role unless they needed to refresh their training/skillset.

midlandlass
27th February 2017, 16:00
Love to see Len and Lucy from ContractorUmbrella in a room dooking it out :ladybags:

:popcorn:

Oh believe me I am ready for it! Odd that these "issues" started as CIS workers were pushed towards umbrella's.

midlandlass
27th February 2017, 16:03
I've not met Lucy but I'm now in a strange place between fear and arousal.

:facepalm: now now you lot!! And I am supposed to be producing a considered response to this!

LondonManc
27th February 2017, 16:16
:facepalm: now now you lot!! And I am supposed to be producing a considered response to this!

I'm happily married (if that's not an oxymoron!) so whatever you want, I'll not hold you to it. :D

northernladuk
27th February 2017, 16:28
:facepalm: now now you lot!! And I am supposed to be producing a considered response to this!

Will it involve mud?

MrMarkyMark
27th February 2017, 16:29
Will it involve mud?

Mud is so passé.

Olive oil and paddling pools are in.

HTH.

barrydidit
27th February 2017, 16:50
Mud is so passé.

Olive oil and paddling pools are in.

HTH.

Not oop north - mud is available in abundance, whereas olive oil is only seen when an Ocado driver gets lost, breaks down, and has to escape down the Manchester Ship Canal deliverance style.

SueEllen
27th February 2017, 18:11
Not oop north - mud is available in abundance, whereas olive oil is only seen when an Ocado driver gets lost, breaks down, and has to escape down the Manchester Ship Canal deliverance style.

You mean there are no Lidl and Aldi up North?

You Sir are lying as I've been to a few.

LondonManc
27th February 2017, 18:14
You mean there are no Lidl and Aldi up North?

You Sir are lying as I've been to a few.

You've got to be wearing grey joggers, Nike Air Max and be from the local council estate to get in one of those up north.

SueEllen
27th February 2017, 18:17
You've got to be wearing grey joggers, Nike Air Max and be from the local council estate to get in one of those up north.

Ahh that explains the weird looks.

LondonManc
27th February 2017, 18:41
Ahh that explains the weird looks.

No, their substance addiction explains their strange looks.

northernladuk
27th February 2017, 18:48
No, their substance addiction explains their strange looks.

The lack of a full set of teeth doesn't help.

LondonManc
27th February 2017, 18:50
The lack of a full set of teeth doesn't help.

Bit harsh on SueEllen that, pal.