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Umbrella Company

Orange Genie Comment on Channel 4's Dispatches...

Posted by Orange Genie Group on Jan 22, 2015 1:47:00 PM

`The Channel 4 “Dispatches” programme, aired on Monday 19th January, made a number of serious press_release-1allegations against two specific companies, one recruiter and one umbrella, who operate in the low paid industrial and construction sectors of the temporary employment market. 

The programme failed to explain that the term “umbrella company” applies to a range of organisations operating in highly segmented markets and drew a number of conclusions about all “umbrella companies” based on the apparent malpractice of two companies operating with low paid and vulnerable workers.

Responding to the programme, Graham Fisher, CEO of Orange Genie Group said; 

Although we do not operate in the sectors highlighted in the programme we are well aware of the abuse of tax and employment regulations. Unfortunately the programme’s need to be sensational meant that it missed the real issue which is that the lack of enforcement of existing regulations by HMRC and BIS allows unscrupulous organisations to flourish in the low paid sectors not regulated by the Gangmaster’s Licensing Authority

All the alleged abuses appeared to be breaches of current legislation including National Minimum Wage, Travel & Subsistence, Agency Workers Regulation, and Employment Rights. If the programme had widened its search it would have found abuse of the Managed Service Company regulations being promoted to low paid drivers and couriers. We note that one of the companies highlighted uses a well know tax avoidance scheme, EDM, which has developed a model based on false-employment

Whilst we welcome Channel 4 exposing bad practice in certain sectors, it is important we redress the balance because umbrella employment is a positive choice for many. It enables workers to undertake a number of temporary assignments whilst having employment rights, statutory benefits, and continuity of employment. A fully compliant umbrella employer manages the commercial, employment, taxation, and statutory risks associated with the use of temporary workers for the supply chain. This role allows the recruiters to focus on generating new assignment opportunities free of ongoing administrative burdens.”

Our message is simple, agencies, contractors and end-hirers concerned about poor practice should choose to work with members of the Freelancer and Contractor Services Association (FCSA) to be assured of the highest possible ethical standards. FCSA members work with our competitors and supply chain partners to improve standards of compliance and we try to work with HMRC to encourage them to more rigorously enforce current legislation.”

FCSA has a rigorous code of conduct that does not tolerate unethical practice, and members are required to demonstrate compliance annually through an independent review undertaken by experts who are regulated accountants and solicitors. This distinguishes FCSA members from the practices of some other umbrella companies that unfairly tarnish the reputation of our sector.”

“We were delighted to see the Recruitment and Employment Confederation (REC) chief executive Kevin Green advising recruiters to work with Freelancer and Contractor Services Association members to ensure compliance.”

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