Balfour Beatty bans umbrella companies on highways job

9 August 2018 | By Neil Gerrard

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.


I thought the HMRC said it was illegal for umbrella companies /agencies to deduct their NI from employees. I have been paying both recently, despite saying I would not work for an umbrella company, but was a week into it before the truth came out. I am over £300 down over 5 weeks work. It's a con and the government should stop it.

Mr. R. Attfield, 9 August 2018

Umbrella workers should not miss out as the agency and end client should pay all employer costs PLUS the PAYE wages. So the worker receives the same net pay as a perm employee. Unfortunately clients dont get this and want to pay just the wages element. Leaving the worker to pay the difference. All deductions made by the umbrella company are paid to HMRC. the umbrella makes just the fee which most charge £10 on average. Sadly umbrella company employees need to get paid too and do t work on a volunteer basis. Oh and the fee includes VAT which also goes to HMRC

LA, 9 August 2018

I'm in full agreement , been through the same situation with these umberella companies its absoultlie day light robbery
Dick Turpin wore a mask.
The government need to step in and fast
Not everyone fully understands the way the system works.

Adam miller, 9 August 2018

Reference the article above about umbrella companies.

When the changed in claiming expenses for travelling and food for a static place of work you're correct it does make it expensive working for umbrella company.

The only way you can make it pay is to make sure you obtain a good hourly rate.

Losing 46% is a high percentage plus the weekly charge

If you work for an umbrella company they are your actual employer and you are a sub contracted to where you're working.

You may not have all the same conditions as a full-time employer for that company where you are working.

If you are working for umbrella company and not at a static place of work I am not sure if you can claim expenses for your travel and food.

I know you used to.

The only other way of working an agency is CIS or limited company.

I agree with your statement the government should do something about these companies they are ripping you off.

I do believe it's quite legal with the current legislation that the umbrella companies are not doing nothing wrong.

That's not to say I do agree with it.

All types of employers today use a high number of agency employment. I believe this is due to there's not enough qualified employees to carry out the relevant jobs.

It just seems the only organisation who are earning out of this is the government.

If they was to change the rules they have less income.

It is the same what is going to happen to road tax with the advent of electric vehicles being more popular. Electric vehicles at the moment are zeroroad tax.

It has been announced that diesel vehicles will stop production in 2020 and petrol vehicles will stop production in 2040.

So you can see the government will change the amount of revenue they collect from Road uses.

Mr B.Baker, 10 August 2018

Grimsby based guy trying to earn a living and get stung by umbrella company finally get it paying utr and got refunded £300 for 2 weeks mess about just shows so I was out 150 per week these need takin out of of business

Dale simpson , 10 August 2018

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