CONSTRUCTION workers protested yesterday at a prestigious Leeds building site where bosses have banned their union.
Their union Ucatt says firms nationwide are side-stepping new regulations intended to prevent them falsely classifying workers as “self-employed” to avoid bosses’ tax and national insurance responsibilities.
Ucatt suspects that the practice — where firms use “umbrella” companies to avoid having workers on their own books — is in use on a £23m project building a new library for the University of Leeds.
Main contractor Shepherd Construction denies using the practice, but has banned Ucatt officials from the site to prevent them talking with the workers.
Leeds campaigners called on the university to ensure its contractors use fair employment practices.
The university refused to comment.
In April new government regulations were introduced stopping firms from using employment agency workers on a false “self-employed” basis, where workers had no paid holidays, sick pay or employment protection.
But use of “umbrella” companies achieves the same end, Ucatt said.
Ucatt general secretary Steve Murphy this week gave evidence to the Commons Scottish affairs committee, which is investigating practices in the construction industry, including blacklisting.
He said: “Rather than paying workers in a normal pay-as-you-earn format, the umbrella tax scam was introduced and workers were given no choice about how they would be paid.”
Using the “umbrella” scheme, he continued, a worker’s gross wage is paid into the umbrella company. The umbrella’s fee and employer’s national insurance contributions are deducted. The worker is then paid the national minimum wage, less tax and the employee’s national insurance.
Ucatt said that workers were reporting appalling wages because of the scam and that it also meant holiday pay was usually included in the pay rate, meaning workers got no pay during annual leave.
The scam also involves zero-hours contracts, with no guaranteed work.
Mr Murphy added: “The umbrella tax scam is a direct attack on workers’ pay and skills. Highly-skilled workers are only being paid the minimum wage. Agencies and contractors are forcing the workers to pay the NI contributions they should be paying. The government needs to take immediate action and end this scam.”