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FCSA Holiday Pay Scandal

The next shocking revelation into the unscrupulous workings of the FCSA and its members has to be the worst so far uncovered and exposed by the Campaign – In the full knowledge of the FCSA and in contradiction to its own guidelines, its members have been stealing the unclaimed holiday pay of thousands of workers for years to the tune of over at least an estimated £50,000,000 – yes, that’s FIFTY MILLION!

A specialist employment lawyer from a very well-known national firm of solicitors has given the Campaign an exclusive in-sight into the planned large-scale claims to be brought by workers. She has explained that ‘group litigation’ is to be brought against: -

  • Twenty-one (but probably more) FCSA umbrellas for pocketing the holiday pay;
  • The FCSA for authorising this outrage; and
  • Over forty-three recruitment agencies for recommending these umbrellas to their candidates.

She went on to say “When I first learned of what was happening, I literally felt sick but that soon turned into anger and outrage when it hit me that our hard working NHS workers were unwittingly being ripped off for such a vast amount of money…I quickly uncovered that the FCSA supports the practice and recruitment agencies and have to take responsibility as they start the process by telling their candidates to sign-up”.

So, how is this happening?

Most people working through an umbrella do not realise that the umbrellas role in the agency worker sector is to act as the employer. This means that workers are entitled to be paid holiday pay just like every other employee. However, because many umbrella workers do not appreciate that there is an employer/employee legal relationship, they do not realise that they are entitled to holiday pay; they just take unpaid leave.

So, when an unwitting worker moves to a new assignment and a new umbrella or, perhaps, moves into full-time employment, unless they literally ask for it within three months of leaving, they are not being paid for unused holiday entitlement and the umbrellas simply pocket all of the unpaid funds.

The lawyer commented “It is an absolute legal entitlement that an employer must pay an employee for unused holiday entitlement and they should pay it as a matter of course with the final salary payment. But the greedy FCSA members don’t as, acting illegally, they have inserted a very dubious clause into employment contracts that allows them to keep it”.

Why are they doing this?

So how can an umbrella justify withholding pay? Simply, they can’t. After all, the money being accrued is already factored into the rate agreed with the client so it is intended to be paid to the contractor, not held on to by the umbrella company. Many umbrella companies will simply pay the rate as agreed so that holiday pay is included with every payment.

What has the FCSA done to prevent this happening?

Absolutely nothing! It has always known about the practice, but allows it to continue as the FCSA is run by the very members that have been systematically pocketing tens of millions of pounds instead of paying it to its employees – lest we not forget, the FCSA is a trade organisation that exists only to increase profits for its members that have a combined turnover of £2 billion a year!

In relation to the FCSA, our lawyer contact says “The FCSA portrays values of integrity, trust and compliance however all of those values are absolutely false. They are put around the agency employment sector purely as marketing tactics for self-promotion and everyone seems to swallow them, hook, line and sinker, leading workers to the proverbial ‘lambs to slaughter’. As with all other elements about the FCSA, it is about protecting the profit of umbrellas and agencies, not protecting the very workers who keep their business alive’.

Why are employment agencies in your sights?

In answer the lawyer says “The route to FCSA umbrellas is very often through an employment agency that insists upon its candidates signing-up with an FCSA umbrella so that they can be paid. Understandably, candidates rely upon the advice and guidance of their agencies in the hope they will look after them and the agencies are financially rewarded for that relationship.

Unfortunately, it appears to me that most agencies fail to undertake any due diligence or merely pay lip service to it and naively rely upon a purported FCSA ‘accreditation’ when there is no such thing at all. Remember FCSA is nothing more than a trade association and it not an accreditor or accredited body”.

Shocking, the lawyer added “I believe I have only scratched the surface in identifying wrongdoing from agencies. I have no doubt that the total number to be sued will easily top 100”.

In conclusion

It is diabolical that agency workers have lost out on such a vast amount of their money and will continue to lose out until this illegal and morally corrupt practice is ended.

All agency workers who have been employed by FCSA umbrellas need to contact them without delay to claim any unused holiday pay. Don’t trust replies such as ‘Don’t worry, we don’t do that’ or ‘Don’t worry, you were paid’. Ask for copies of all you wage slips, P60’s and your P45 and written confirmation off a director if you are denied a payment.

If you still get no satisfaction, complain to the agency you worked through at the time and ask it to justify its recommendation to you and ask what due diligence it did into paying your holiday pay. All agencies need to urgently review their FCSA umbrella relationships, both past and present, and expect a huge backlash and some very difficult questions from candidates and the Employment Agencies Standards Inspectorate.

The investigations into the unsavoury business dealings of the FCSA continues for us at the Campaign, so keep reading our articles and providing your support.

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