FCSA has responded to a motion tabled at the TUC congress in Brighton earlier this week opposing umbrella companies, pointing out that the debate is peppered with a number of inaccuracies.
Debating employment rights and trade union rights Congress aired its concerns about the growing number of umbrella companies in industry, noting that Treasury reforms introduced in April this year have led to greater financial disadvantages for workers “forced” to operate through umbrella companies. FCSA refutes this claim as this has nothing to do with umbrella firms – it is the Travel and Subsistence reforms that have affected these workers whether they are employed by an umbrella or not.
Congress went on to debate that workers are given no financial advantages from umbrella companies and are forced to work through them as it is the only way to secure employment. FCSA argues that people choose umbrellas because umbrella employers provide contractors with full employment rights, all statutory benefits including holiday pay, maternity pay, paternity pay, sickness pay, pensions, redundancy pay and adoption pay. An umbrella also provides employee support through their HR service as well as keeping a record of the contractor’s full employment history which serves to help someone who works on multiple contracts to access personal finance solutions such as mortgages and loans.
Congress added that it believes that umbrellas are just one of many suspect employment models established to deny workers employment rights or as a vehicle for employers to avoid paying NICs.
FCSA says this assertion is simply wrong because umbrella workers enjoy all the statutory rights of an employee. Legally, employers cannot avoid paying their NICs and they need to be factored into the assignment rate. As the employer, the umbrella has to deduct employers NI from that rate.
Responding to Congress, the chief executive of the Freelancer and Contractor Services Association (FCSA), Julia Kermode said: “We are increasingly concerned that the reputations of respectable businesses are being tarnished implying that umbrellas are a ‘con’. We strongly refute this assertion, and believe that the real issue is poor communication. Umbrellas are transparent as they have clear contracts of employment and make it very evident that the individual worker is an employee and enjoys all the statutory benefits of an employee.
“As the largest trade association for the umbrella sector, FCSA is keen to work with all political parties and unions to ensure that good practice is the norm and stamp out bad practice where it exists. Our Accredited Members are required to adhere to a strict code of conduct, and demonstrate their compliance annually by passing an independent assessment undertaken by regulated accountants and lawyers.
“Communication between the supply chain is vital along with discussion with politicians and unions and we welcome the opportunity for dialogue. It was disappointing to hear the criticisms aired by UCATT at the TUC congress saying that their requests for information on benefits of umbrellas made to an umbrella trade body had been met with ‘bare-faced silence’. They have certainly never contacted us and FCSA would like to work closer together to clear up any misunderstandings about our sector and ensure that workers are not exploited.”