FCSA: Only Orange Genie can offer potential redress to contractors claiming to be £4million out-of-pocket

Any financial redress for contractors £4million out-of-pocket from Orange Genie allegedly deducting from their payslips would need to come solely from Orange Genie, says the FCSA.

Speaking to ContractorUK, the accreditation body made clear that it would not compensate the thousands of Orange Genie contractors who say they are ‘salary skimming’ victims.

But the Freelancer & Contractor Services Association’s Chris Bryce cautions that it is “far too early” to tell whether any redress will actually be due to Orange Genie employees at all.

'Orange Genie's sole responsibility'

And the process to determine whether redress is due (in wake of the umbrella being accused of deducting £2 a week per payslip for five years), “may take several weeks or even months”.

The FCSA’s CEO, Mr Bryce continued in a statement to ContractorUK: “If any payments to contractors are found to be due those will, of course, be Orange Genie’s sole responsibility.”

Mr Bryce’s “hanging out to dry” of Orange Genie – as a legal expert put it yesterday to ContractorUK, follows the umbrella company avoiding termination as an FCSA member.

'Disproportionate'

In fact, although the FCSA decided to terminate Orange Genie’s membership following the £4milllion ‘salary skimming’ allegations, that decision has now been overturned by the IAP.

Set up by FCSA in August amid concerns over transparency in its disputes and decisions, the Independent Arbitration Panel ruled on Tuesday that terminating OG was “disproportionate”.

The association’s IAP clarified in a summary of its ruling that the association did not commit any wrongdoing in expelling Orange Genie -- on the contrary, it “correctly issued a sanction.”

The panel found that Orange Genie breached FCSA’s umbrella code (on two counts); failed to ‘timeously remedy’ the breach, and failed to ‘timeously comply’ with FCSA’s sanction.  

'Astonishing'

To some contractors taking to LinkedIn, those findings are grounds not to suspend Orange Genie for six months (which the IAP ruled and FCSA now accepts), but to expel it outright.

Speaking on condition of anonymity, the legal expert summed up the online consensus, telling ContractorUK:

“It’s astonishing that in just 26 weeks, an employer that allegedly covertly swiped £2.00 from thousands of contractors’ payslips, purportedly to enrich itself, will be reinstated.

“Reinstated, as a member of a body claiming dedication to compliance. Unless fully repaid, OG contractors and anyone else in their right mind will find reinstatement unconscionable.”

'No resolution or redress'

Contractor Voice is a blog which first went live with the allegations against Orange Genie in October, ahead of it offering any umbrella contractor the chance to have their payslip audited.

The blog’s Jacob Bellas says Orange Genie contractors are “really unhappy” with the IAP’s decision not to ban it from the FCSA.

“Lots of contractors who have had their [Orange Genie] payslips audited [via us] can see no resolution or redress,” Mr Bellas said last night to ContractorUK.

“They see suspension from FCSA as barely a slap on the wrist. It’s an opportunity for Orange Genie to tick FCSA’s boxes, without having to pay back any money owed to contractors.”

'Salary skimming has no definition'

Initially reluctant to speak up, an FCSA insider eventually revealed last night to ContractorUK that there was a “problem” in the Orange Genie investigation.

That problem (or rather what sounds like an obstacle to expelling Orange Genie from FCSA), is that while the £2.00 deduction was proven in the investigation, ‘salary skimming’ was not.

“Salary skimming has no definition,” said the insider, referring to the association’s many codes, guidelines and charter being absent of such a term or outlined practice.

“Technically, if it’s the ‘assignment rate’ that the £2.00 deduction comes out of, and if it’s never actually paid by the worker out of the worker’s wages, then it isn’t 'salary skimming.'”

'FCSA's umbrella code should go further'

Reassuringly, and positively for contractors hoping not to have their wages unduly deducted from, the IAP sounds aware that the FCSA has a significant gap that needs filling.

“FCSA should issue updated industry guidance on so-called ‘salary skimming.’

“The FCSA Umbrella Code currently requires a member to be transparent in illustrating any charges that they make.

“But, the panel would like the code to go further and consider whether additional charges are appropriate and whether there should be a viable opt-out of these charges for the worker,” the IAP says.

For conclusion two out of its four, the panel added: “This case must be used to improve practice in all firms, not just Orange Genie.”

'IAP's full report needs to be released'

But Contractor Voice’s Mr Bellas is unimpressed. “We need the IAP’s full report into OG, not the headline points that the FCSA have put out,” he said.

“That [lack of full disclosure won’t bring back the many] Orange Genie contractors who have confirmed to me that they have left the umbrella, or are planning [to]”.

In those ‘headline points,’ the IAP states four reasons why termination of OG as an FCSA member was a “disproportionate” reaction from the association.

Th panel’s reasons include the “pace at which the case accelerated” and the “lack of clear [FCSA] guidance on timelines and procedures”.

'FCSA should work with Orange Genie'

The association’s Mr Bryce, a former contractor reflected to ContractorUK: “The Independent Arbitration Panel has not upheld FCSA’s original decision to terminate Orange Genie’s membership.

“Instead, the IAP has ruled that Orange Genie be suspended from FCSA membership for six months. The IAP has also ruled that FCSA should work with Orange Genie to resolve the matters at hand.”

In response, Orange Genie said: “We’re delighted with the FCSA agreement not to terminate our accreditation, and instead work with us through a period of suspension.

“We’ll do everything in our power to ensure we satisfy the standards required to remain an accredited FCSA member. We were in the process of making the required changes when terminated and these have now been implemented.”

'Redress for the injured'

A former legal adviser to locums body the IHPA, Stephen Mhiribidi replied to the umbrella: “What about the contractors [at Orange Genie]?

“They are the people who were injured from all this. How are you giving redress to them? It is simply NOT enough to satisfy the FCSA and [its] IAP.”

Also unsatisfied and on the same thread, a technical contractor wrote: “This is a ‘sorry we got caught’ [statement from Orange Genie].

“Please explain your plans to rectify the failings and what rectifications will the hard-working contractors see going forward?

“More importantly, what will the hard-working contractors that were adversely affected receive in form of compensation?”

'No back room deals'

As well as saying whether compensation is due is undetermined, and that it may take months to determine, with Orange Genie being solely responsible if it is, the FCSA said there would be “no back room deals”.

The association made the comment on the thread started by Orange Genie welcoming the IAP’s decision, but which descended into people asking about redress for OG contractors.

Explaining how its accreditation is “difficult to attain and maintain,” the FCSA followed up: “There’s no back room deals or ‘here’s the badge for a nod and a wink’ which we've heard of from other less credible organisations.

“Of course, no organisation is perfect and no membership body can possibly claim that its members don’t make mistakes.”

'We want to assure all our agency partners'

Whether such acknowledgement of “mistakes” will cause recruitment brands that removed Orange Genie from their PSLs since the allegations to re-list the umbrella remains to be seen.

But in its online statement welcoming its six-month suspension in place of an outright expulsion, the umbrella company did appeal directly to potentially jittery agencies.

Reposted by some of its senior staff to their professional profile pages, OG's Tuesday statement went on:

“We want to assure all our agency partners that we’ll continue to provide their workers with compliant, transparent, and complete employment.

“Should these partners want to make any checks/audits themselves, then please do get in contact.”

'On hold for around half an hour'

But getting in contact could be quite the experience.

“In the handful of weeks [I operated through OG]…I made over ten calls to their call centre [and] spoke to a different person each time who was ‘unable to comment’ on their colleagues’ work [or] give an update on my issues,” states the latest off-payroll.org review of Orange Genie.

The most recent of four consecutive zero-star rated reviews for the umbrella company, the entry from seven days ago adds: “[Orange Genie] then promised a follow-up -- which never came. Each time I was on hold for around half an hour”.

Entitled “Don’t do it,” the review won’t surprise a solutions architect who says he too is urging contractors not to engage the umbrella company, but in his case because the company made the weekly “deductions [of £2.00] that were in clear violation [of] FCSA [codes].”

'FCSA will take action'

Speaking from the association yesterday, Mr Bryce told ContractorUK: “FCSA will continue to monitor all members data to ensure that, if we find unexplained deductions, the member concerned properly explains them and takes corrective action.

“This monitoring includes but is not limited to illustrations, contracts, payslips and reconciliation statements. [So] your readers should be in no doubt, as we have shown in recent weeks, that if members fail to meet FCSA’s stringent codes, then FCSA will take action.”

But a ban of six months isn’t the sort of action that sits right with the legal expert.

“The FCSA has a choice,” began the expert. “It’s a choice between acting in the interests of its members, suspended or not suspended, and acting in the interests of contractors and the contracting industry.”

Profile picture for user Simon Moore

Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
Printer Friendly, PDF & Email

Contractor's Question

If you have a question about contracting please feel free to ask us!

Ask a question

Sign up to our newsletter

Receive weekly contractor news, advice and updates.

Every sign up will be entered into a draw to WIN £100 Amazon Vouchers.

* indicates required