Umbrella Sector Regulation Still A Distant Hope?

Despite it being one of the conservative party’s election manifesto commitments, the government has confirmed that plans for a single enforcement body have been shelved.  It would have been a  workers watchdog, bringing together regulators into a new independent body with a remit to enforce workers rights on issues such as holiday pay.  And the long awaited commitment to regulate the umbrella sector was due to fall into the single enforcement body’s remit, however it seems likely that this plan is also now shelved.

Business Secretary Grant Shapps told MPs this week that plans had changed because of the two years spent fighting Covid.  He told the Commons business committee that the employment bill is no longer “on the cards” after it was left out of every Queen’s Speech since the last election.  But he insisted the Government would achieve many of its aims more quickly by supporting half a dozen backbench amendments in Parliament. 

So far there has been no official word on whether plans to regulate the umbrella sector specifically are affected, which is presumably also shelved, or at the very least delayed.  This is a bitter blow for workers, who time and time again find themselves exposed to the risks of the unregulated umbrella sector – whether that’s being lured into working through tax avoidance schemes or being forced to use certain companies against their wishes due to restrictive preferred supplier lists.

It’s also another kick in the teeth for workers whose holiday pay is often withheld by unscrupulous umbrella companies and employment agencies. By shelving plans to introduce the single enforcement body and in turn, regulate the umbrella industry, the government is showing an astonishing disregard for the millions of workers losing millions of pounds collectively to this questionable practice.


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