UNITE Union to Focus on Massive Fake Self-Employment in Construction Industry
15th April 2017
UNITE, one of the largest unions in the country covering many industry sectors from finance and legal to manufacturing, local authorities and the construction industry, has launched its first appeal via its brand new Strategic Case Unit, and plans to set a legal precedent in its bid to tackle the issue of fake self-employment statuses through umbrella payroll companies.
Steve Murphy, general secretary for UCATT, believes that the declaration of bogus self-employment status is costing in the region of £2bn every year.
How is bogus self-employment being declared?
The biggest issues for UNITE members is the wrongful deduction of workers' wages, and the reduction of workers' rights via the use of an umbrella or payroll company, often used to handle payroll for large construction projects.
This landmark case has been opened by UNITE to highlight an employment issue, as the construction worker had been employed through an employment agency - On-Site Recruitment Solutions Limited.
The worker, Mr Blakely, was urged to contact an umbrella payroll company called Heritage Solutions City Ltd to arrange payment for his contract. This grows more complicated when the main contractor for the NHS contract is Kier, the mechanical contractor is Fascel, and Mr Blakely is hired via the agency, with the umbrella payroll company handling his pay.
The issues Mr Blakely is experiencing are; that he was not asked to sign a contract with Heritage until two months after he began work; that the payroll company admin fees (£18 per week), and that he was charged the employer national insurance contributions (£725.50 over 5 months). Also, the contract stated that Mr Blakely should authorise employer Class 1 NI deductions and an indemnity clause was included that dissuaded him from pursuing legal claims or claims via HMRC. Failure to sign the contract would result in his payments being stopped, however, Mr Blakely did not sign the contract. His work ceased in May 2016, when he took holiday and was asked not to return to work.
Mr Blakely's subsequent tribunal case, including a claim for unpaid holiday pay entitlement, undertaken with the support of UNITE's legal services, was dismissed as it was found that he was not a worker. UNITE has lodged the appeal, citing the wrongful application of employment law, and it is hoped that the decision will provide protection for such workers, who are the victims of fake self-employment statuses applied by the umbrella payroll companies. These companies fulfil taxation requirements, but do not fulfil workers rights.
UNITE has released a statement via Howard Beckett, the assistant general secretary for legal services, 'For too long employers, agencies and accountants in construction and other industries have believed that they can boost their profits and evade basic employment protections by classifying workers as bogus self-employed. Unite has drawn a line in the sand and will be throwing the full force of our resources behind our members who are sick of being exploited and treated as disposable units that can be hired and fired at will. It is astonishing that both the agency, On-Site, and the payroll company, Heritage, thought it was somehow legal and acceptable, on the one hand, to deduct employer's NI from Mr Blakely's wages, and on the other, claim our member was self-employed to avoid paying holiday pay and basic minimum pension contributions, whilst charging a 'Management Company Margin' for doing so. It’'s a disgrace that this was allowed to happen, least still on a publicly funded NHS project.'