A Portsmouth worker has successfully led a ground-breaking victory against the employment and payroll agencies that thrive as “parasitic” middle men between workers and employees.
Pompey pipe fitter Russ Blakely was working at Broadmoor Hospital but his employer was not the NHS. Like thousands in the construction industry he was caught in the “umbrella system” – being employed via a contractor and a recruitment agency whilst his wages were being paid through a separate payroll company.
Russ, 57, had been taken on by On-Site Recruitment Solutions Limited, which had told him that his salary must come through payroll company Heritage Solutions City Limited – which charged an outrageous £18-a-week to process pay.
He appealed an Employment Tribunal decision that disgracefully ruled his employer was allowed to deny workers holiday pay as well as unlawfully deduct both a processing fee and employer national insurance contributions from his wages.
These obviously should have been paid by his employer – the clue is in the name. He was also denied an auto-enrolment pension and sick pay.
A contract with the payroll company also included what his trade union called a “menacing” indemnity clause aimed at stopping him from pursuing any legal claims and gagging him from raising complaints with HM Revenue and Customs.
Now he’s won at a landmark Employment Appeal Tribunal in a ruling that sets a legal precedent.
The appeal found that while his contract stated that he was self-employed, he had to work at the direction of his bosses and so should have been classified as a worker.
The case was taken on by Unite, Britain’s biggest trade union.
“This is a groundbreaking victory secured by Unite’s Strategic Case Unit in the fight against bogus self-employment in construction and other sectors,” said assistant general secretary Howard Beckett.
“I was working for an NHS hospital but there were four companies between me and the hospital, all taking a cut of what is taxpayer’s money,” Russ told the Daily Mirror.
“There are all these layers and it needs to be asked: what are they doing that’s of any value?
“Under the umbrella system of working through the employment agency and payroll company I was charged £18-a-week to get my wages.
“This is still happening across the construction industry, it’s outrageous.”
Russ praised Unite the Union and campaigning law firm Thompsons Solicitors, saying he could never have fought the case without their help.
Compensation, expected to be in the region of £2,500, will be decided at a later hearing.