Reports of the death of umbrella companies have been greatly exaggerated – Mike Keeling

Compliant Umbrella companies provide a valuable service for the flexible workforce that the UK depends on.

It was Mark Twain who (very nearly) said the above and it appears that there have been some recent reports of the death of the Umbrella Company, particularly from some of the more vocal unions.  It’s true that Umbrella companies are increasingly in the spotlight and from my point of view that can only be a good thing.  As an industry we should embrace the news from the Chancellor’s Autumn Statement that there is going to be a consultation on the use of Umbrella Companies during 2015.

Compliant Umbrella companies like One Click, and many others like us, provide a valuable service for the flexible workforce that the UK depends on.  We are subject to a raft of legislation to protect workers, and to provide them with full employment rights and additional benefits.

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Yes, we enable our contract and freelance employees to offset their legitimate business expenses.  But don’t forget, in return they waive their job security to provide the very services that the UK economy demands.  We think that this represents a pretty fair swap.  Better they receive a small increase in their net pay and work though a reputable umbrella company than work via an unscrupulous provider which is either based offshore or does not pay its liabilities.

Lets put all the recent publicity in context.  It was legislation targeting false-self-employment that forced many construction workers to be employed rather than paying themselves as self-employed individuals under the CIS scheme.  If these workers are forced to become employees then unless their rate is increased to take into account employment costs such as Employer’s NI and holiday pay then of course they are going to be worse off as the umbrella companies are obliged to pay these costs.  This is not the fault of the umbrella providers and perhaps the unions should be directing their anger elsewhere?

I wear two professional hats, one as Operations Director for One Click Umbrella, and the other as an active member of All Umbrella Companies Are Equal (AUCAE).  As a group of compliant providers, we do all we can to drive best practice in the industry and I’m happy to say that we are currently in discussions with our MPs, the Unions and also directly with HMRC and the Treasury.

Hopefully our direct engagement with all the relevant parties will pour some oil on troubled waters and bring some clarity.

By Mike Keeling

The British Institute of Recruiters is the Professional Body operating The Recruitment Certification Scheme

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