Umbrella -v- TUPE etc

Sandtree

Thanks to the joys of IR35 I am currently having the fun of having to work via an umbrella company which I signed up to a few months ago and their contract stated payment to me would be made same day if they received cleared funds by 4pm.

Two weeks ago received an email saying they'd decided to merge with another umbrella and attached a new contract of employment naming the other company now as the employer. Having read the contract now it states payment will be made the following Friday to them receiving the funds which potentially means waiting an extra week for pay day and exposure to them going bust. Given how pay is calculated (NMW + bonus of day rate minus all employment costs) I suspect any employee protections would only cover the NMW component.

Obv dont want to make too much of a mountain out of a mole hill because I can just sign up with a new umbrella this afternoon but the fact I'm now having to wait an extra week for my monies is more than a little annoying. That hasnt stopped me wondering however if they can just arbiterally switch the "employer" and terms with no protections? Obviously in a truer employee/employer situation TUPE would likely kick in but a quick conversation with ACAS they say that despite having a contract of employment that I am legally a "worker" rather than "employee" so the umbrella can do whatever it wants.

Grumpy_chap

Sandtree said:

I suspect any employee protections would only cover the NMW component.

I suspect that is correct.

Sandtree said:

Having read the contract now it states payment will be made the following Friday to them receiving the funds which potentially means waiting an extra week for pay day and exposure to them going bust. 

I don't think the once-a-week payment run is unusual, though I see how it is a change for your situation.  Are the funds simply paid to the UC from the end Client, or do they go to the equivalent of a lawyers "Client account" which keeps the funds separate in the event of the UC failing?

I disagree with ACAS since the whole idea of UC's is that you become an employee.  Obvs, ACAS are more expert than I.

Given the very low "margin" that UC's take and the potentially high exposure for employment liabilities, I don't understand how any UC actually manages to survive.

I also suspect that default "inside" assessments will wain away once end Clients realise they are liable for costs under AWR when inside IR35.  It won't be long until someone tries to enforce those factors through the courts and it will change the balance.  PLUS, in a constrained labour market, an end-Client that assesses work as "outside IR35" will be very much more attractive to good consultants.

Sandtree

Almost every umbrella company advertises a same day payment service...

Having spoken to this new company they dont actually do the transfer as a traditional payroll but a manually done Faster Pay payment. The monies have to go from client to MSP (who take 6%) to Agency (who take 16%) to Umbrella (who take £22), have no idea if any are using a client funds type account to separate their monies from mine but I'd be surprised if they do.

I am surprised how blindly that they sign up people without any questions about what you are doing etc... havent looked at their PI insurance other than its a £5m limit but when operating outside IR35 I struggle to get PI cover because of the size of the transactions I do... clearly trying to show I am responsible for a wrong transaction would be difficult given all the checks and balances etc but £5m wouldnt touch the sides were such liability be proven

The market at the moment is fairly hot and there is a lot more Outside roles than 9 months ago, oddly seem to be a fair number of non-UK based consultancies wanting UK based contractors for UK based end clients on GBP based rates which also moves things back to the old ways of working.

Still surprised they can just change your employer and terms without consultations etc

General_Grant

Sandtree said:

. . .

Two weeks ago received an email saying they'd decided to merge with another umbrella and attached a new contract of employment naming the other company now as the employer. Having read the contract now it states payment will be made the following Friday to them receiving the funds which potentially means waiting an extra week for pay day and exposure to them going bust. Given how pay is calculated (NMW + bonus of day rate minus all employment costs) I suspect any employee protections would only cover the NMW component.
. . .

What date does the new document say is the start date of your period of employment?  The same as before or more recent?

Sandtree

General_Grant said:

Sandtree said:

. . .

Two weeks ago received an email saying they'd decided to merge with another umbrella and attached a new contract of employment naming the other company now as the employer. Having read the contract now it states payment will be made the following Friday to them receiving the funds which potentially means waiting an extra week for pay day and exposure to them going bust. Given how pay is calculated (NMW + bonus of day rate minus all employment costs) I suspect any employee protections would only cover the NMW component.
. . .

What date does the new document say is the start date of your period of employment?  The same as before or more recent?

It doesnt, there is not a single piece of personalisation on it nor is there any gaps for putting name or start date or anything else into it.

Marcon

Grumpy_chap said:

I disagree with ACAS since the whole idea of UC's is that you become an employee.  Obvs, ACAS are more expert than I.

Not in this case, unless this is wrong: https://www.gov.uk/guidance/working-through-an-umbrella-company

and https://www.litrg.org.uk/sites/default/files/files/LITRG-Factsheet-working-through-an-umbrella-company.pdf are also mistaken!

Both make it clear that you are an employee of an umbrella company.

Sandtree

Well have to admit an interesting call with the new owners of the umbrella... seems clear due diligence was light, I am a brickie doing domestic construction according to the data they've been given. Still awaiting a reply on TUPE but monies were paid at 8pm on Friday and he admits to being very worried about their insurance as whilst my contract says they fully cover it every element of my work says their insurers wont touch it.

getmore4less

Sandtree said:

Well have to admit an interesting call with the new owners of the umbrella... seems clear due diligence was light, I am a brickie doing domestic construction according to the data they've been given. Still awaiting a reply on TUPE but monies were paid at 8pm on Friday and he admits to being very worried about their insurance as whilst my contract says they fully cover it every element of my work says their insurers wont touch it.

It may not be TUPE, buyouts/mergers don't always fit.

Either way unless they have put in conditions(on the owners)  they take on the employee with all the liabilities(there are limited exceptions like insolvency).

Sandtree

getmore4less said:

Sandtree said:

Well have to admit an interesting call with the new owners of the umbrella... seems clear due diligence was light, I am a brickie doing domestic construction according to the data they've been given. Still awaiting a reply on TUPE but monies were paid at 8pm on Friday and he admits to being very worried about their insurance as whilst my contract says they fully cover it every element of my work says their insurers wont touch it.

It may not be TUPE, buyouts/mergers don't always fit.

Either way unless they have put in conditions(on the owners)  they take on the employee with all the liabilities(there are limited exceptions like insolvency).

They have changed the legal entity that is the employer following an acquisition - though appreciate dont yet know how the acquisition was done.