Umbrella companies and Supply Teaching Agencies

Anthear

Would appreciate some input - I have been working for an Agency providing Supply staff to schools.  Rather than handle their own payroll they used an Umbrella Company, so I wasn't employed by the Agency, but by the Umbrella Company.

Agency has told me that this is a 'much better' system for staff as we are employed (my argument well so were those employed in Agencies running their own payroll) but the argument used for that model was that during Furlough, Umbrella Company Agency Supply staff were paid, whereas those with agencies running their own payroll had staff on Zero Hours contracts and they did not qualify for Furlough....

Having looked that the contract, the UC guarantees 336 hours a year at NMW.  So circa £3K a year.  Am I right in thinking that any sick pay/Furlough would be calculated on the £3k pa figure?

Trying to get my head around it all so welcome any advice anyone can give.  :-)

Grumpy_chap

Operating through an UC, basic salary is NMW.  Anything over and above that is paid as bonus and not eligible for any SSP etc.  All calculated on NMW.

If it applied, anything like furlough would also be calculated on NMW.  That may be a moot point as most UC contracts are zero-hours and, even if they were not, I doubt that the circumstances will arise again in our lifetimes that mean furlough is reintroduced by the UK Government.

Anthear

Hi Grumpy_chap - thank you!  That's interesting and the more I thought about it, the more I thought Furlough/sick pay etc must be calculated from something so thank you for the clarification.

The contract states "If at the end of any full 12-month period of employment commencing on the Start Date or an anniversary thereof we have not offered you at least 336 hours of paid work, we will pay you at the applicable National Minimum Wage (or, if applicable, the National Living Wage) rate for such number of hours as is represented by 336, less the number of hours in respect of which we have previously paid you during that 12-month period. "

So how would they calculate SSP before the end of a year, would they pro-rata any payment?  Tbh - this is clearly 'smoke and mirrors' with something very basic being dressed up as something very special.

And yes, I thought that using Furlough as a reason for using an UC model was stretching it seeing I've been working since the 1980's and never come across anything like this before!

Grumpy_chap

Is the UC contract based on hours at NMW over the year less hours worked?
Or is it hours at NMW less total benefits paid (as value not time)?

Anthear

Oh crumbs - idk - I've just copied and pasted from the contract.  I'm just curious as to how it would work in practice.

Anthear

But as a business model - presumably they use the margin you have to pay them to provide the 336 hours at NMW and they work on the basis that most people will work for far more than 336 hours over a year.

Grumpy_chap

Yes, less than 10 weeks at 35 hour week.
I suspect they also have bases covered for a short-term contract, say 6 weeks, not being extended.

Anthear

Is there significance in terms of employment law with the 10 weeks at 35 hours a week?

Grumpy_chap

Anthear said:

Is there significance in terms of employment law with the 10 weeks at 35 hours a week?

Not that I am aware.
I am not an Employment Lawyer or HR professional.

I suspect, if you are not doing work, they send you a P45.  If you are doing work, you achieve the minimum hours so the back-stop becomes irrelevant.

That makes it all similar to temp work via an Agency.  My wife just finished a contract, then they paid her accrued holiday and then sent P45 and said they will re-enroll her if they find another assignment for her.