PAYE Umbrella Companies and redundancy

**Sockpuppet** · 26 April 2007, 17:01

Your a contractor and don't get redundancy. They are not making you redundant the contract is ending. You will have a clause saying if you don't work and bring any funds in the umbrella doesnt have to pay you. So you are sill employed by the umbrella just you are bringing in no funds and doing no work so you will not get paid.

**IDB** · 26 April 2007, 19:33

It's a bit rich to even think that you could claim redundancy.

Yes, you're employed for legal purposes. But the umbrella has done you a favour in allowing them to work for you so that you can get paid. Yes, they've taken a fee off of the amount they invoice agencies, but if you were limited then you'd have most likely been paying accountants.

Without either a limited company or an "umbrella" arrangement, most agencies won't deal with you - and those that do would have PAYE'd you on the full amount.

You chose to use the services of an umbrella so your agency could pay you (albeit via the umbrella). You can't expect the umrella to then pay you from their own profits whilst you're not making them any money either!

**tim123** · 27 April 2007, 08:31

You may be able to make a case that, in spite of the contract, you are *actually* an employee of the brolly and as such you are entitled to redundo.

But you won't get the brolly to see it this way without taking the matter to court.

If you were to win, you would get 2 weeks of the minimum redundo payment of about 200 pounds, but you would make the brolly route unsustainable as an employment option to everybody else.

Is it really worth it for such a piddly sum?

tim

**Money Money Money** · 27 April 2007, 09:19

Originally posted by onion

Hi per my contract of employment I work as a 'flexible employee' for a payroll services umbrella company. I have had over 2 years continuous employment at a client site and now my contract is not being renewed as teh role is disappearing. Does anyone know if I inherit employee rights of redundancy or is the umbrella company covered. Ive asked DTI who say regardless of who or how I'm paid I probably am entitled. Whilst the umbrella company say despite the contract ending they are not making me redundant. On closer inspection my contract has a section under 'payment' where is reads 'national mininum wage or rate agreed by the end client at the start of an assingment' so I wondered if after Friday they might be planning on paying me the minimum wage (which I thought was a bit odd) however the contract also has a clause of when I am between assignments apparantly they dont have to pay me?! It seems like its a bit convuluted and the payroll services company whilst fully saying they are my employer also are not appearing to be too direct and whilst statutory redundancy isnt a bit amount, I've not secured anything else and could do with it if entitled but am not keen to go running to a lawyer as the cost may outway the actual payment due!
any knowledge or advice on this would be appreciated
onion

Surely it would be better spending your time looking for a new contract, rather than spending time and money with Lawyers and court fee's?

And then all you would get is national minimum wage! Hardly going to set the world on fire!

**Xtrain** · 27 April 2007, 16:04

All PAYE brollies must be your employer in order to pay you via PAYE. You are therefore, despite what their contract with you says, an employee of theirs and you are entitled to all normal employment rights (sick pay, maternity pay, redundancy etc...). That was the good news.

However the bad news for you is that their contract will of course, as previously suggested, only pay you minimum wage. No doubt to get that minimum wage when you are not in contract you will have to turn up for 8 hrs a day at their office. Not a very good rate imho. For redundancy they will of course have to pay....eventually and after you have incurred legal fees (which may or may not be re-imbursed by the court).

So I suggest you move on, find another contract and stop thinking like a permie!

**lilfreckles** · 27 April 2007, 16:19

I am with SockPuooet on this one!

Listen to his words of wisdom . You contract ends therefore you dont get paid. You are still registered with the umbrella, but you dont get charged as you are not working.

Once you find another contract the umbrella will pay charge but you will start to pay the normal fee. Wich is common sence.

Think you are trying to get money out of nowhere cuz posibly you are a bit skint.

**Sockpuppet** · 27 April 2007, 18:24

Originally posted by Xtrain

All PAYE brollies must be your employer in order to pay you via PAYE. You are therefore, despite what their contract with you says, an employee of theirs and you are entitled to all normal employment rights (sick pay, maternity pay, redundancy etc...). That was the good news.

However the bad news for you is that their contract will of course, as previously suggested, only pay you minimum wage. No doubt to get that minimum wage when you are not in contract you will have to turn up for 8 hrs a day at their office. Not a very good rate imho. For redundancy they will of course have to pay....eventually and after you have incurred legal fees (which may or may not be re-imbursed by the court).

So I suggest you move on, find another contract and stop thinking like a permie!

I'd put money on the contract ebing worded like the majoity of the agency contracts that I work for when driving. They are under no obligation to find your work and your labour is required on an adhoc basis.

They can even get out of holidays by paying you the money in your pay packet (i.e. you take the holiday as you acrue it).

In simple it wont work. They will have thought of this.

PAYE Umbrella Companies and redundancy