After the publication this week of “Jobs Tsar” Mathew Taylor’s Government-commissioned review of modern working practices, the Freelancer and Contractor Services Association (FCSA), a trade association representing Umbrella Companies, welcomed its proposals for this model of engagement.
Overall, the impression that the FCSA has been left with upon reading Mr Taylor’s review is unambiguously positive. The report refuses to adopt the extreme position of some contributors to the review, notably the Trade Unions, who had wanted Umbrellas to be banned. While there is acknowledgement that some players in the market have been using this model of engaging contractors unscrupulously, there is also recognition that well-run, compliant Umbrella Services benefit contracting professionals, end clients and recruiters alike.
Mr Taylor proposes requesting the new Director of Labour Market Enforcement to explore how the Employment Agency Standards Inspectorate (EAS) might include in its remit the task of policing Umbrella Companies and other intermediaries to ensure compliant and ethical practices.
Notably, the Taylor Review has stopped short of recommending comprehensive licencing for all players in the staffing industry supply chain. However, the review acknowledges the power of the Gangmasters and Labour Abuse Authority to withdraw licences from suppliers operating within the sectors in its scope should they fail to comply with the Agency Workers Regulations (AWR).
Commenting on the much-anticipated review, FCSA member Shaun Critchley said: “We welcome the suggestion that Umbrella Companies should be policed by the Employment Agency Standards (EAS). Such a move would help to raise standards in our sector and drive the cowboys out of business.”
FCSA Chief Executive Julia Kermode similarly welcomed the review’s positive stance on Umbrella Companies and flexible working models more broadly. Emphasising that the flexibility of the UK’s workforce remains a key strength and that future success as Britain leaves the EU will rely heavily on the skills of flexible workers to help manage the inevitable uncertainties, she praised the review’s upbeat recognition of Umbrella Companies as a valuable part of the supply chain.
She added: “In particular, I am pleased that the review has concluded that more should be done on transparency of pay, something that I and FCSA have campaigned for tirelessly in recent years. Compliant Umbrella firms are wholly transparent in all of their dealings in the supply chain, and particularly how they calculate pay for their employees, plus they provide a clear contract of employment with all 84 statutory rights and benefits which accompanies employment.”
Ms Kermode went on to say that the review panel had shown appreciation of the value of Umbrella Companies in the supply chain, which between them have brought £3bn per year to the Exchequer.