UK slammed over ‘dodgy umbrella companies’
The Trades Union Congress (TUC) accused the UK government on Monday of failing to announce adequate plans to fix labor market abuses by “dodgy” umbrella companies that employ thousands of temporary workers.
With as many as 600,000 temporary workers in the UK estimated to be employed by umbrella companies, which recruitment agencies use to cut payroll costs, the TUC fears that some of the companies are taking advantage of workers for financial gain.
The UK government has previously accepted estimates that labor market abuses by umbrella companies cost workers and the treasury £4.5 billion ($5.87 billion) a year in misappropriated funds, unpaid wages and tax fraud.
The TUC, which claims to represent around 5.5 million workers, represents the majority of trade unions in the UK, comprising 48 affiliated unions. The TUC’s general secretary, Frances O’Grady, argued that “lack of regulation lets dodgy umbrella companies off the hook” and allows them to “act with impunity and treat workers appallingly.”
“Tinkering around the edges won’t cut it. It’s time for a ban on umbrella companies,” O’Grady said, citing, for example, how there “aren’t enough inspectors to make sure companies stick to the rules.”
The UK government is currently in the process of producing rules for the labor market to tackle concerns around the use of umbrella companies. Under current plans, independent contractors who are required to use umbrellas would not be classed as “agency workers,” meaning they’d fall outside the scope of the proposals.
Government officials have not yet responded to the TUC’s latest criticism.
