In the second part of our ‘Setting the Standards’ series, we look at how recent rulings, such as those from the Pimlico Plumbers case, will affect umbrella companies and workers.
What cases such as these have highlighted is the importance of full disclosure on behalf of the umbrella companies as well as just how crucial it is that workers read and understand the full terms and conditions attached to their agreement.
We know that some unscrupulous providers are still including terms and conditions in their contracts which are often confusing or obscure in an effort to deter workers from reading them. The result of this is that workers were often unaware that they had lost their holiday pay entitlement. This seems to be especially prevalent with the accrual method of holiday pay, whereby umbrella companies put a worker’s holiday pay to one side on their behalf until either they take leave or they terminate their contract with the company.
Another concern is the increasing use of non-disclosure agreements by umbrella companies when disputes between them and workers seeking their full holiday pay were resolved. This issue was particularly highlighted during the furlough period, brought about by Covid-19, when some workers were not paid their accrued holiday pay.
These sort of tactics are indicative of the more unprincipled providers in the market; whilst not illegal, the issue highlights that there is a definite grey area when it comes to the moral viewpoint of such behaviour.
As employees, all workers, not just those under umbrella company terms, generally have contracts which run from one ‘holiday year’ to another, and are required to take their holiday entitlement within that year or lose it. The onus is now on employers to be proactive in informing their employees of their entitlement and encouraging them to use their leave. Those employers who have not done so, either by design or accidental omission, could now find themselves facing significant back claims for holiday pay.
Setting the standards
A fundamental requirement of all providers approved by Professional Passport is that they inform all their workers about their holiday fund balance before the holiday year ends, advise them of how much is available and how they can claim that amount. In addition, they must also tell their workers how to claim a concession to roll the pay over to the next holiday year.
Our terms also require that we are able to approach software companies and request reports which can confirm that the standards are being met – confirming that our intermediaries are already meeting the highest standards of propriety. The reports, while omitting personal details of workers, provide a clear audit trail of what holiday has been approved, what has been paid out and what has been rolled over to the following year. This means that should a provider’s standards fall below our standards, they must reimburse the worker in full before being accepted back onto our accredited provider list. To date, no provider on our accredited list has been found to be operating schemes which withhold holiday pay from contractors.
Our open-door access to key provider data covers not only holiday pay, but also other key areas in order to maintain and enhance the standards which we consider fundamental to safeguard workers’ rights.
If you are looking to work with an Umbrella company, visit the Approved Providers list from Professional Passport, the UK’s largest independent assessor of payment intermediary compliance.
If you are an agency or organisation using or looking to engage with an umbrella company and need advice, please contact email@example.com.