The Freelancer & Contractor Services Association (FCSA) has said that a suggestion from the Trades Union Congress (TUC) that the government should ban umbrella companies is not workable and would harm freelance workers.
Discussing alleged infringements of workers’ rights and tax fraud at umbrella companies, TUC General Secretary Frances O’Grady said: “These scandalous workplace practices have no place in modern Britain. But our inadequate regulations let dodgy umbrella companies off the hook – allowing them to act with impunity. Enough is enough. It’s time for ministers to ban umbrella companies, without delay.”
However, the FCSA and other freelance campaigners have criticised the TUC’s proposals and instead urged for increased regulatory scrutiny of the umbrella company industry. Some have suggested that an outright ban on umbrella companies would in fact lead to a worsening of conditions for freelance workers.
The FCSA called the TUC’s comments a “knee-jerk reaction” and questioned its proposals that recruitment agencies could manage freelancer contracts instead. 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.”
Employment Status Forum Chair Rebecca Seeley Harris was similarly critical of the TUC’s proposal, saying: “The TUC report on the umbrella industry emphasises the need for the market to be properly reviewed and regulated. However, an immediate outright ban would be very complex to implement overnight because of the legislative timetable and the time companies would need to unravel arrangements.”
