Following the receipt of the Independent Arbitration Panel’s decision regarding Orange Genie’s appeal against termination of their membership by FCSA, we today confirm that Orange Genie have been suspended from FCSA membership for a period of six months for breaches of our Umbrella Code relating to transparency in listing all deductions made from assignment rates. Our original action of terminating Orange Genie’s membership has not been upheld by the IAP.
Whenever FCSA receives evidence of a breach of our Codes – whether it’s related to a new complaint by an individual or evidence provided by a third-party – we take action to investigate and follow our documented procedures to ensure any issues are dealt with fairly and effectively.
In the case of Orange Genie, in late September 2022 we received allegations that their umbrella operation had been deducting sums of money from employees under as single heading of “Employment Costs”. Since October 2021 our Umbrella Code at sections A3e and A17 has required that all deductions made are separately, clearly and transparently listed, and Orange Genie had over a period of time failed to adhere to this requirement.
Following information received, we commenced our investigation into these reports in early October and concluded that Orange Genie were in breach of our Code. On 28th October FCSA then issued a notice of membership termination to Orange Genie. As is their right under our Terms and Conditions of Membership, Orange Genie then appealed FCSA’s decision to the Independent Arbitration Panel (the IAP).
The IAP’s Decision
The IAP have now considered the appeal and their determination is as follows:-
- Orange Genie did in fact breach FCSA’s Umbrella Code
- Orange Genie failed to timeously remedy this breach as required by FCSA
- FCSA correctly issued a sanction to Orange Genie
- Orange Genie failed to timeously comply with that sanction
However, it is the view of the IAP that whilst FCSA did not break its own internal processes, termination of Orange Genie’s FCSA membership is disproportionate for the following reasons:-
- The pace at which the case accelerated from finding a breach and issuing a small fine to expulsion.
- The lack of clear guidance for members on timelines and procedures for sanctions.
- The apparently cursory discussion of suspension as an option – and the lack of focus on repairing the issue at the heart of the complaint.
- The relatively small scale of the fine, given the scale of the apparent issue.
The IAP has therefore concluded that:-
- Orange Genie should pay the fine immediately and be suspended from membership for six months in order that the FCSA can work with Orange Genie towards compliance with the FCSA codes in place at the end of that period.
- 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. This case must be used to improve practice in all firms, not just Orange Genie.
- The panel would also like to see amendments to the Umbrella Code to make the procedure, including the terms of reference for the Independent Arbitration Panel, and the escalation for the sanctions much clearer. The Code should be re-drafted to include more detailed steps and that failure to respond to the organisation within a certain amount of time will result in termination, where the member will be expelled for a 12-month period.
- After six months, the panel will reconvene to hear whether Orange Genie has reached compliance and the progress made by FCSA on its codes.
Whilst FCSA recognises that our original decision to terminate Orange Genie’s membership has not been upheld by the IAP, nonetheless FCSA accepts their decision and recommendations in full. We will work to further improve on the processes and documentation surrounding our Terms and Conditions of membership and our complaints procedure. We will also work with Orange Genie to remedy their breaches of our Codes and subsequently re-assess their full compliance with our Codes. These results will also be re-examined by the IAP in due course. FCSA will continue to work with the IAP to implement their recommendations regarding our industry guidance and internal processes.
FCSA would like to thank the members of the Independent Arbitration Panel for their time and diligence in considering this case.