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FCSA responds to Unite’s attack on Government and umbrella employers

As Unite’s assistant general secretary Gail Cartmail calls for umbrella companies to be outlawed and accuses the government of washing its hands of workers who it believes are ‘experiencing the misery of being paid by an umbrella company’ the Freelancer & Contractor Services Association’s (FCSA) chief executive Julia Kermode has stepped in and called upon the union to educate itself about the benefits workers gain by choosing to work through compliant umbrella companies before taking another swipe at them. 

Julia Kermode said: “Like Unite, FCSA, as the representative body for umbrella employers, is committed to protecting the workforce from exploitation so I am disappointed to hear Unite’s assistant general secretary Gail Cartmail attacking them with such vitriol as well as the Government who we know are takingnumerous steps to clamp down on poor practice.

“Umbrella employers do not exist to exploit workers but to provide a valued service enabling workers to be employed, whilst also having the flexibility of working on a number of short-term assignments for various end-hirers.  A compliant umbrella employer provides an invaluable service to the temporary labour market.  Theyemploy contractors, ensuring that they are entitled to all 84 statutory benefits and rights of employment, whilst also giving them the freedom to undertake short-term assignments for a variety of end-clients.  In short, it is the best of both worlds, all the flexibility of contracting plus all the benefits of employment. 

“To clear up the confusion of pay, compliant umbrellas do not deduct employers NICs from their employees’ wages, neither do they deduct their margin from their employees’ wages nor any employers’ pensions contributions.  All of these are overhead costs which are taken out of the assignment rates, which is not the same as the employees’ wages. Confusion can sometimes occur when there has not been enough transparency regarding the difference between the assignment rate and the umbrella employees’ gross pay rate.  This can easily happen in fast-paced environments where workers are needed to hit the ground running at short-notice.  However, there is no excuse and we will continue to strive to raise standards and promote compliance in our sector as we have told Unite time and time again.

“We have long campaigned for umbrella employers and recruitment agencies to work together on ensuring that the correct rate is given to workers, and we fully support the government’s intentions around improving transparency of pay for such workers, as recommended by Matthew Taylor’s independent review of modern employment practices.

“In relation to rolled up holiday pay, we suggest that best practice would be to offer the employee the choice whether to have it rolled up, or whether to accrue holiday pay which is drawn down when they have a break between assignments. Some contractors prefer to receive it rolled up, others prefer the latter.  Either is acceptable providing that the umbrella employee has clarity and understands their particular arrangement.

“I would welcome the chance to meet up with Ms Cartmail to further dispel some of the myths around umbrella employment.  FCSA accredited members adhere to a strict code of compliance and we are committed to ridding the industry of any perceived bad practice as well as promoting umbrella employment as a positive choice for the hirer and the worker.”