The Freelancer & Contractor Services Association (FCSA) has criticised recent comments made by Trades Union Congress (TUC) General Secretary Frances O’Grady regarding umbrella companies. O’Grady had suggested that the UK government should impose a blanket ban on umbrella companies, a proposal the FCSA called “knee-jerk” and “not workable”.
Discussing the issue, O’Grady had said that, despite complaints regarding the alleged working practices at some umbrella companies, “inadequate regulations let dodgy umbrella companies off the hook”. O’Grady then asserted that “it’s time for ministers to ban umbrella companies, without delay”.
The FCSA responded that such claims were ill thought through, would ultimately be harmful to UK contractors and would cause working conditions for freelancers to worsen. The FCSA also dismissed a TUC proposal that the work of managing freelance contracts could instead be taken up by recruitment agencies.
In a statement, the FCSA said: “Recruitment companies are simply not equipped to properly manage and employ such a varying workforce. Hence the existence of umbrella firms. To simply suggest that umbrella firms be banned is not workable and ultimately will disadvantage the freelance worker.”
The FCSA instead argued that the umbrella sector requires increased and more efficient regulation in order to ensure that contractors and the wider freelance supply chain are better protected from non-compliant activities.
The FCSA’s statement continued: “This sector should not be banned. It and its contractors need robust legislation, meaningful regulation and most importantly an investigation and prosecuting body that has knowledge and real teeth. FCSA member companies are compliant, and they welcome a more intense scrutiny and enforcement of the sector. This action is now urgent.
“The banning of umbrella companies would simply create an even greater compliant and ethical void that would ultimately make the outsourced worker even more vulnerable.”
Author: Steven English
06.08.2021
