Umbrella provider Paymaster workers ‘not employees’, judge concludes

30 - 10 - 2013

An employment tribunal has concluded that six individuals engaged with umbrella provider Paymaster were not employees of the company, despite being signed up on written employment contracts.

The six workers – a HGV driver, a seamstress, clinical support workers and a security guard – were left unpaid when the company, which offered a pay day by pay day model, went into receivership.

The workers brought their cases to a tribunal to try to obtain payment in the form of holiday pay, redundancy pay and breach of contract.

The employment tribunal found that Paymaster had not acted as a proper employer to the workers as they were not provided with an assignment schedule and therefore their instructions regarding duties, place of work and assignment rates were dictated by recruitment agencies.

The tribunal also found that the recruitment agencies that engaged with Paymaster had some control over the way holiday pay was processed and the agencies advised workers that they would be working with a ‘payment agency’ (umbrella company) rather than allowing to make a decision on whether or not they wanted to work this way.

The judge concluded that Paymaster had no control over the workers and control is ‘a prerequisite to a contract of employment.’

As a result, the claimants have been left without recourse as it the umbrella provider, rather than the recruitment agency or end client, which is responsible for paying its workers.

Trusting Umbrella

Here at Foremans, we understand that stories like this can deter workers and recruitment agencies from taking advantage of the many benefits of umbrella companies.

This is one of the reasons we strive to ensure that our umbrella company, Foremans (UK) Ltd, which is supported by the regulated and chartered accountancy firm Foremans LLP, is a safe and reliable solution for workers and agencies alike.

With Foremans (UK) Ltd, you can rest assured that we always accrue holiday pay in line with legal guidelines and only pay out holiday pay on request of employees. Furthermore, we do not allow recruitment agencies to have any control over how holiday pay is processed.

We do our level best to ensure that every worker that Foremans (UK) Ltd engages is doing so of their own free will and we pride ourselves on only taking on contractors who would be better off as a result of the umbrella company.
At Foremans (UK) Ltd, we believe that the umbrella solution works only when the contractor’s rights and decisions are respected and valued. As such, we ensure that all workers receive their statutory entitlements, such as sickness, holiday, maternity and paternity pay, in line with UK employment law. We are also proud to call ourselves ‘the contractor’s choice’ as many of our workers change recruitment agencies regularly but remain with us for a great part of their contracting career. 







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