Recruiters and Umbrella companies were shown in a negative light in the Channel 4 documentary Dispatches, as it looks into the pay conditions in the UK.
In the documentary an undercover worker posed as a Recruitment Agency worker to go to a meeting with an Umbrella group, where the reporter was told how he could lawfully save money in PAYE and NI by employing workers through an umbrella firm.
The group, MAC Professional Solutions, also came under fire as one worker told Dispatches that they were meant to be paid £12 an hour but had up to one third of their rate went on paying the umbrella company a fee for processing his wages, as well as National Insurance contributions and holiday pay.
The general manager of the umbrella group told the undercover reporter how workers could be paid less than the minimum wage and remove employee rights as “They’re not classified as an employee or worker, so technically the National Minimum Wage is £6.50 doesn’t exist… To be perfectly frank, they’ve got no holiday pay rights, they’ve got no employee rights…they’ve got no worker rights.”
Other groups and employers were investigated during the program, with allegations including workers employed at ASOS by Transline Resource Group being offered permanent jobs on completion of a temporary 12 week contract, but then laid off shortly before the 12 weeks had been completed.
In 2013 two of Transline Group directors lost their Gangmasters’ Licensing Authority license, or GLA, so they are currently unable to provide employees to the food industry after an investigation by the GLA found that some workers were being paid £2.87 an hour before expenses. The group say that they were employing apprentices. Similar accusations have been made by workers at ASOS, where some suggest that they are being paid £3.08 an hour before expenses. Transline say that the workers with low pay were again apprentices.
All allegations against the companies have been denied and have said that they comply with HM Revenue and Customs.