Ban Umbrella Companies – They’re Immoral Says Union Boss | IT Contractor

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Ban Umbrella Companies
Ban Umbrella Companies

Ban Umbrella Companies Say Unite

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The Government should ban umbrella companies, acccording to Unite’s Acting General Secretary, Gail Cartmail.

She said “Umbrella companies are highly immoral and rip off workers”.

According to Unite, workers using umbrella companies had to pay all their own National Insurance contributions. The union, therefore, reckon this is against their basic employment rights.

They say that workers are given false self-employment status and even have to pay a weekly, or monthly, fee for that.

Misery of Umbrella Companies

Said Unite’s Gail Cartmail, “The Government need to end the misery of umbrella company workers by outlawing this practice and all forms of bogus self-employment.”

It seems the Unite union are succeeding in excluding umbrella companies in some projects in the public sector.

An example of this is at the Hinkley Point nuclear station project.

They think, however, the Government should go further.

Umbrella Companies Outlawed

It seems, also, that both the Welsh and Scottish Governments have outlawed the use of umbrella companies on public sector contracts.

Some local authorities in those countries have done the same.

Said Gail of Unite union, “If the Government fails to act we will step up pressure on all public and private sector organisations to ban these sinister organisations.”

It seems that there are now over 400,000 UK workers operating via umbrella companies.

Unite say that “unscrupulous” employers are use this form of employment increasingly.

IT Contractor Comment

I must say that I am a little surprised, and bemused, by that.

I thought that the Government liked umbrella companies.

Indeed, in the public sector, certainly in England, it is Personal Service Companies that the government is cracking down on.

Personal Service Company Contractors

Because of new Government IR35 rules, many Government departments are now refusing to deal with contractors using personal service companies.

However, contractors using umbrella companies appear to be OK.

Indeed many contractors are now dumping their PSCs and signing up with umbrella companies.

Contractors tend to decide themselves whether they should use PSCs or umbrella companies.

However, that is now changing in the public sector where the Government department will decide a contractor’s IR35 status.

2010 Bribery Act and Recruitment Agencies

The real scandal here is when IT Contractors, and others, are coerced by agencies into using particular umbrella companies because the agency gets ‘commission’ from the brollies.

This is illegal under the 2010 Bribery Act and constitutes a bribe. That’s especially if they agency don’t tell the contractor they are getting a fee from the umbrella for the contractor.

Maybe that’s what Unite should be looking at more.

So should the Government ban umbrella companies?

What do our readers think?

Has an agency ever forced you into a particular umbrella company, or one on their PSL?

Put your comments in the section below.

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