Balfour Beatty has banned umbrella companies from a major highways contract after union pressure.
The contractor manages the Area 10 Highways Contract which covers motorways and major roads in Merseyside, Cheshire, Lancashire and Greater Manchester.
The Unite union said it had helped reach an agreement that bans the use of umbrella companies on the project, as well as agreeing that Balfour will permanently employ any agency worker who has been on the project for at least three months.
Unite said it also wanted to ensure that the agreement on agency labour and umbrella companies was continued in future agreements when the Area 10 contract, thought to be worth around £320m, is re-tendered next year.
Unite regional co-ordinating officer Andy Fisher said: “This is a significant decision. Unite will not only be ensuring that the agreement on umbrella companies and agency labour is extended to whoever inherits the Area 10 contract but extends these commitments to other similar contracts.
“While the government washes its hands on umbrella companies, Unite is taking the issue directly to the door of employers.”
Balfour Beatty has been contacted for comment.
Under an umbrella company, a worker has to pay both the employer’s and employee’s National Insurance contributions, as well as income tax. Unite said this amounts to 46% of a worker’s eligible earnings, while the worker is also charged an additional sum – often up to £25 per week – for being paid through the umbrella company.
