The Freelancer and Contractor Services Association (FCSA), the Umbrella Company trade association, has vigorously rebutted attacks on Umbrella Services made at the TUC’s Brighton conference this week.
The FCSA was responding to a motion tabled at the TUC Congress that made sweeping attacks on Umbrella Companies. According to the trade association, the debate was littered with false claims and inaccuracies. Its CEO, Julia Kermode, pinpointed the misleading assertions and set out the factual benefits of contracting via an Umbrella.
The Congress asserted that reforms made in April by the Treasury placed workers who had been “forced” into Umbrella Employment at a financial disadvantage.
The FCSA robustly challenged this claim, pointing out that the Treasury reforms had nothing to do with Umbrella Companies. They were directed at abolishing tax relief on Travel and Subsistence costs, a change that has affected temporary/contracting workers whether or not they are employed by an Umbrella.
The debate moved on to argue that workers are being forced into Umbrella Employment as the only means of securing work and that they derive no financial advantages from this method of engagement.
In response, the FCSA made it clear that many people positively opted for Umbrella Companies because Umbrella Employers provide contractors with all of the employment rights that they would otherwise miss out on if they were working via a personal service company. These include all of the statutory benefits – maternity and paternity pay, adoption pay, sickness pay, pensions, holiday pay and redundancy pay.
In addition, Umbrellas support their employees via their integral HR service and keep records of contractors’ entire employment histories, thereby helping people who work on multiple projects to obtain personal finance such as loans and mortgages.
The Congress’ claim that Umbrellas represent one of the many models of suspect employment aimed at denying workers’ employment rights and allowing employers to dodge their NIC obligations also met with a robust refutation. The FCSA repeated the fact that, on the contrary, Umbrella Company workers enjoy exactly the same statutory rights as employees, and Umbrella Employers cannot legally avoid their NIC obligations, which are included in the assignment rate.
Expressing the FCSA’s growing concern that respectable Umbrella businesses are being tarnished by claims that they are a con, Kermode said:
“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.”