Victory claimed in bogus
self-employment battle
12th June 2018

The Unite union, is claiming victory in a long running dispute over the use of ‘sham contracts’ by payroll companies, umbrella companies and employment agencies. 

Last month, pipe fitter Russ Blakely received a settlement £2,500 for unfair deductions and holiday from employment agency On-Site Recruitment Solutions Ltd. 

The case began when he applied for work at Broadmoor Hospital in Berkshire. The main contractor was Keir and the mechanical contractor was Fascel. However Mr Blakely was recruited via On-Site. On-Site then informed him that in order to be paid he needed to contact payroll/umbrella company, Heritage Solutions City Limited. He was charged £18 (management deductions) a week to be paid in this manner. He also had employer’s national insurance contributions deducted from his pay. 

When in March 2016 he was asked to ‘sign a contract of services’ he was informed he was neither an employee nor a worker but was self-employed. This meant that he was not entitled to even basic employment rights including holiday pay. Mr Blakely refused to sign the contract and when he took holiday in May 2016 he was not asked to return. 

With the support of Unite Legal Services he took an employment tribunal case for unfair deduction of wages (for the management fee and employer’s national insurance) and also claimed for unpaid holiday pay.

The Employment Appeals Tribunal found in favour of Mr Blakely and made several decisions which create legal precedents and will be used in future employment tribunals.

Unite assistant general secretary Howard Beckett said: “Following a two year battle Mr Blakely has finally received the compensation he deserved.  While the sums are not large the principles established at the EAT will be vital in fighting the scourge of umbrella and payroll companies in construction and other sectors. 

“Unite will now be ensuring that the decisions contained within this case will be applied to other similar cases and the rip offs inherent in the employment agency, umbrella company/ payroll company model are tackled and stamped out. 

“This case absolutely underlines why workers need to be a member of a trade union. A worker without free legal support would have been totally denied employment justice in such a complicated case.”