Reply to: Umbrella company ended contract to avoid Maternity payments :(

[ASB]

Thank you everyone for all your help and advice
Wanted to give you an update before I'm off on my merry way..

I received a phone all on Monday (literally just after my 20wk scan) from the umbrella company who informed me that the decision had been rescinded! I received an email yesterday to confirm this. I'm back on their books.. Will be entitled to full SMP and should send my Matb1 in as soon as I receive it.. Happy days!

Thanks again... And best wishes x

Excellent result.

[LisaContractorUmbrella]

Excellent news - well done

[BillHicksRIP]

Bravo to all involved.

[TheFaQQer]

It's amazing how quickly companies change their minds once they realise that you're prepared to take decent advice!

[Michigan13]

Thank you everyone for all your help and advice
Wanted to give you an update before I'm off on my merry way..

I received a phone all on Monday (literally just after my 20wk scan) from the umbrella company who informed me that the decision had been rescinded! I received an email yesterday to confirm this. I'm back on their books.. Will be entitled to full SMP and should send my Matb1 in as soon as I receive it.. Happy days!

Thanks again... And best wishes x

[LisaContractorUmbrella]

Thank you Lisa (again) ..I used your template to amend my version to prevent it from being so lengthy! Lol

Had an email back from the senior employee care advisor stating that he has passed my query onto their compliance team, who will be back in touch in due course.

Fingers crossed the outcome is a positive one! Will keep you updated

Glad to help

[Michigan13]

Thank you Lisa (again) ..I used your template to amend my version to prevent it from being so lengthy! Lol

Had an email back from the senior employee care advisor stating that he has passed my query onto their compliance team, who will be back in touch in due course.

Fingers crossed the outcome is a positive one! Will keep you updated

[ASB]

So when you are not working there is no 'invoice value' and so therefore SMP will be based on salary which is minimum wage.

I think there is a potential issue there; but the rules are those set by HMG. I believe SMP is based on the average of the last 8 weeks. (For the first 6 weeks).

It seems that there is the potential to be disadvantaged if out of contract. But that is no different to somebody who happens to be out of work (actually better since I don't think if out of work SMP would apply).

[original PM]

Your assumptions are right - as with any other employer we can only reclaim 92% so the other 8% comes from our bottom line. It is based on average earnings over a set period - we use Sage payroll so it's calculated for us - it definitely shouldn't be based on minimum wage. I understand that there are some companies that deduct an amount from their workers which is then paid back as SMP/SSP etc but this in no way covers their statutory obligations and would upset HMRC no end

Hmm - most brollies pay you the minimum wage and then a 'bonus' based on what is left of your invoice value after they have taken out the minimum salary and statutory deductions.

So when you are not working there is no 'invoice value' and so therefore SMP will be based on salary which is minimum wage.

When I was working with a brolly in the past I am sure SMP was literally the statutory government minimum.

[LisaContractorUmbrella]

Well drafted Lisa.

A little O/T how do you deal with SMP ?

As I understand it you can reclaim 92% of the cost from the government; I rather imagine your NI payments don't allow you the 103% rate :-).

So, in effect you are needing to absorb the 8% from your fee. Obviously you will have factored this in across the collective employees and overall at any given point if is probably a fairly minor burden and I am sure there are loads of stats out there to enable you to make a decent guess at what it will be and set your charges accordingly.

So that is how I imagine it would all work in practice for an umbrella.

But, what is SMP based on ? For the first 6 weeks it is 90% of average weekly earnings then it drops.

Would I be correct in assuming that the average weekly earnings are what is paid and subject to tax/ni ?

(I only ask because I am aware that some umbrellas pay based on minimum wage plus a bonus due to the paying between assignments thing).

I'm just curious that's all.

Your assumptions are right - as with any other employer we can only reclaim 92% so the other 8% comes from our bottom line. It is based on average earnings over a set period - we use Sage payroll so it's calculated for us - it definitely shouldn't be based on minimum wage. I understand that there are some companies that deduct an amount from their workers which is then paid back as SMP/SSP etc but this in no way covers their statutory obligations and would upset HMRC no end

[Scruff]

Thursday night is sockie night!

Just a random non-sequitur... (to be frank, I had intended posting into a different thread, and it was in my Cut'nPaste buffer)

[ASB]

Well drafted Lisa.

A little O/T how do you deal with SMP ?

As I understand it you can reclaim 92% of the cost from the government; I rather imagine your NI payments don't allow you the 103% rate :-).

So, in effect you are needing to absorb the 8% from your fee. Obviously you will have factored this in across the collective employees and overall at any given point if is probably a fairly minor burden and I am sure there are loads of stats out there to enable you to make a decent guess at what it will be and set your charges accordingly.

So that is how I imagine it would all work in practice for an umbrella.

But, what is SMP based on ? For the first 6 weeks it is 90% of average weekly earnings then it drops.

Would I be correct in assuming that the average weekly earnings are what is paid and subject to tax/ni ?

(I only ask because I am aware that some umbrellas pay based on minimum wage plus a bonus due to the paying between assignments thing).

I'm just curious that's all.

[LisaContractorUmbrella]

Try this:

Dear Sirs,

You recently terminated my employment citing that my interests are not best served by working with an umbrella company and that I would be better served working directly for [the agency]. The Contract of Employment that I signed states quite clearly that you are required to give me 3 weeks notice of termination of employment and, as this was not given, you are in breach of contract.

I am sure you are aware that I am pregnant as I advised [the agency] on 13th May; if they did not advise you for any reason please accept this email as written confirmation. The law states that, provided I meet certain criteria, I am entitled to receive Statutory Maternity Pay from my employer. As I work through [umbrella company] under a Contract of Employment and have done for a period of almost 3 years the criteria has been met and you have a legal obligation to me.

I look forward to receiving written confirmation, by [date of your choosing] that your decision to terminate my employment has been reversed and that you will be making SMP payments to me as required by law.


Leave it like that (or something similar) and just see what they come back with

HTH

[Michigan13]

But keep things simple in bullet points

Lol...

[Michigan13]

This is probably getting really annoying for you guys, I actually cringe at the level of which I am relying on your assistance lol :S

..BUT, here's a copy of the letter I have drafted already. The sections I have highlighted in bold would probably be better reworded, with inserts that better demonstrate my legal position as stated by Lisa.

Dear (whomever it may concern)

I am writing in regards to a later received from yourselves on the 31st of May 2014 (dated 29/05/2014) in which you state that you have ended my employment with yourselves in order to allow me to transfer to (agency's) PAYE payroll. This letter follows an email received on the 28th of May 2014 in which you state that you have recently reviewed my account and found that i wasn't getting the most out of (umbrella company) and based on discussions with (agency), recommend that I transfer to their PAYE payroll instead.

I would like to draw to your attention that not only do I not wish to move from (said company's) Umbrella service to (agency's) PAYE payroll and would like to appeal that decision, but that you are also in breach of section 6.2 of your terms and conditions which state that you 'The Company' must give the following periods of prior written notice to terminate my employment:- two weeks’ notice for continuous employment for more than one month but less than 2 years; or three weeks’ notice for continuous employment of more than 2 years but less than three years. My first assignment with yourselves was on the 3/7/2011, which implies that I have been employed by yourselves for almost 3 years thus should have been entitled to at least 3 weeks notice.

Unfortunately the period between your email and the received letter does not meet this criteria nor had you consulted with myself as to why both yourselves and (agency) feel that an Umbrella Service isn't best suited to me at this stage. I feel that it would have been in my best interests had you done so, particularly as I had recently informed (Agency rep) at (agency), on the 13th May 2014, that I am pregnant and would have assumed that this should have been brought up by (agency) whilst they were in consultation with yourselves about terminating my employment with (said company). Had my employment not been terminated I would have been contacting you shortly to provide a copy of the MATB1 form that I will be due to receive in a weeks time in order to verify my pregnancy and confirm my expected week of confinement.

I am under the impression that in ending my employment with yourselves without prior notice or agreement from myself you have directly affected my eligibility for Statutory Maternity Pay, I would therefore like to make a formal complaint as well as request some indication of whether this situation can be rectified. I would appreciate if this matter could be resolved sooner rather then later so I can continued being paid for my ongoing contract with (School), I will continue to carry out my duties as normal but do not accept the changes, therefore I would be much obliged if you could contact me within the next 7 days.

if the outcome of this situation is not satisfactory I will be seeking legal advice.

Kind regards,

(Me)

Am thinking this may be rather long winded.. Like almost everything I write! (As you've probably noticed!) :S