The FCSA has urged Labour not to punish genuine self-employed workers and to review its blanket ban on umbrella companies. The organisation is responding to reports of Labour’s intentions should they come to power in next month’s general election. FCSA has learned that Labour will clamp down on bogus self-employment by shifting the burden of proof of worker status so that the law assumes a worker is an employee unless the employer can prove otherwise and is also planning to ban umbrella companies. FCSA is concerned that genuine self-employed professionals will be unfairly targeted and that Labour does not understand how umbrellas work.
On shifting the burden of proof of worker status onto the employer to stamp out false self-employment Julia Kermode, chief executive of the Freelancer & Contractor Services Association (FCSA), the UK’s largest independent trade association whose members provide umbrella services and accountancy services to freelancers and contractors said: “The recommendation that employed status should be assumed as the default with the hiring business needing to prove the case for self-employment would have a devastating impact on UK businesses and ultimately the economy. Whilst I appreciate the rationale in cases where there might otherwise be exploitation, if rolled out across the whole workforce it would create an unnecessary barrier to self-employment, removing people’s right to choose how they are engaged, and removing the flexibility enjoyed by the majority.
“What’s more, there are 84 statutory rights and benefits that go with employee status and I would challenge any employer to be prepared to offer those benefits to genuine self-employed workers,” Kermode continued. “It’s ludicrous to expect that someone engaging a gardener would have to prove the case for that person being self-employed! The end result could see no contingent workforce at all, which unfairly penalises the 4.8 million people choosing to work in this way.”
Reacting to the ban on umbrellas outlined in Labour’s manifesto Julia Kermode said: “Corbyn and others clearly don’t understand how umbrellas work. Umbrellas allow contractors to be able to work independently for a number of end-hirers and provide contractors with full employment rights, all statutory benefits including holiday pay, maternity pay, paternity pay, sickness pay, pensions, redundancy pay and adoption pay.
“It would be foolhardy to ban umbrellas unilaterally considering that this sector is worth more than £3 billion in tax and national insurance contributions to the Exchequer annually,” she adds. “We have a good track record of successfully changing views about umbrellas; the evidence of the positives is irrefutable and when we talk to MPs, trade unions and others they always see our perspective. In an unregulated industry, we acknowledge that there is poor practice within the sector which is why FCSA is committed to raising standards. Rather than a blanket ban, which only demonstrates a lack of thought, consideration and understanding on their part we would look to work together with Labour policymakers on initiatives that promote compliance and truly support workers that choose to work through umbrellas. A blanket ban on umbrellas is not the way forward.”