Parasol - Employment Costs - extra charges??

[Wary]

I got the standard Parasol response:

The amount retained by Parasol is detailed in your contract of employment. Payroll costs include, but are not restricted to, any payment of Basic Pay, employment costs (such as employers national insurance contributions) and pension contributions as well as any business expenses reimbursed by the Company.

Clause 3.1 confirms that whilst on assignment, you will be entitled to be paid basic pay for the hours that you work. For clarity, basic pay is a sum per hour at the rate of National Minimum Wage in force from time to time and not including any advance payment of PBA or Commission. I have attached a copy of your contract of employment.

Employment costs consist of Employers' National Insurance Contributions (NIC) which is currently calculated at 13.8%, employers National Insurance has always been an amount retained and this amount is sent on to the HMRC. Any additional amount of Employment Cost retained can vary, depending on whether you have a pension or claim business expenses.

I can confirm that Parasol are fully compliant with legislation and have not taken any payments from you unlawfully. The employment costs are non reimbursable, therefore we are unable to refund these to you.

So they didn't actually tell you anything other than to insist that these additional deductions are lawful, and are indeed related to expenses claimed & pensions contributions without giving the precise detail. (The pensions bit is interesting as someone previously said that they appear not to take 13.8% of this too, but their response suggests that maybe they do.)

Will you now take this to an Employment Tribunal? Remember that you have a 3-month deadline. I'm no legal expert but I would suggest that to be lawful, they'd have to demonstrate that these additional fees are reasonable, fair and transparent. How did they calculate that these additional "employment costs" equate to 13.8% of your expenses/pension? Why would someone who claims £200 in expenses effective cost their employer, in terms of their additional overheads, twice as much as someone who claims £100 in expenses? I thought these additional fees were to cover increased AWR costs; what has this to do with expenses/pensions?!? Why aren't these additional fees clearly stated on the payslip, rather than lumping them together with Employers NI and using a generic "Employment Costs" narrative to describe the combined amount.

Noticably absent from their response was an explanation of why they'd chosen this method/calculation to cover supposed additional "employment costs", as opposed to increasing the weekly fee, and why these deductions aren't being properly communicated to their employees ... A company with any integrity would surely welcome the opportunity to explain why they think this is a fair and reasonable method, rather than simply insisting it is technically legal.

What's your next step? I know what response I'd send to them if I were in your position.

[The Spartan]

I contacted my solicitor after I received that response and asked her how we take this forward

[Wary]

I contacted my solicitor after I received that response and asked her how we take this forward

What did she say?

[Yehudi]

No need for a solicitor, submitting an employment tribunal claim just requires a simple form - give them all the facts in plain english and explain why you think it's unfair. Doesn't cost you a penny.
Employment Tribunal guidance

As previously stated, there is a strict 3 month deadline for claiming. And you will have a stronger case if you show that you have attempted to resolve it with Parasol before making a claim (but don't let them dilly-dally past the deadline).

[The Spartan]

What did she say?

She's going to get in touch with them today

[Sarah2010]

Is this how they are paying for their Swedish Derogation Model ?

They took my money and blame it on what they call 'employment costs'... never again with them.

Under this new Swedish model AWR 'thing' an Umbrella has to pay 50% of the salary for 4 weeks to an employee who finds themselves out of contract. Is this how Parasol are funding the extra cost?

[The Spartan]

I believe this is so

[Wary]

Under this new Swedish model AWR 'thing' an Umbrella has to pay 50% of the salary for 4 weeks to an employee who finds themselves out of contract. Is this how Parasol are funding the extra cost?

It would be interesting to know whether anyone has put this to the test as yet and whether they actually got paid. Maybe there's a clause in the contract that if interpreted loosely, means that they're legally not obliged to pay you this money ... or that some of your pay for the previous months included an element of this out-of-work pay up-front, and so you've already had it!

[Wary]

Found some interesting posts from Steven@Parasol from June 2011 on
http://forums.contractoruk.com/umbre...-pay-more.html

"we will be offering a full employment model based on the swedish derogation as part of our solution to the AWR and there will not be a significant increase to our fee. It might be pence not pounds and this is to cover the additional admin etc."

"We have made our decision to go down this route based on a risk analysis of our base. We have almost 9,000 contractors and the majority of them do not have significant gaps in between contracts so we have the financial strength to cover the pay between assignments when necessary."

"Pay between assignments lasts for up to four weeks so based on this risk analysis we've made a business decision that we can afford to honour this obligation without a significant increase to our fee."

"I've heard Lisa and our own CEO Rob make the point on numerous occaisions that the 'true correctly structured' umbrella companies are not far off from being compliant AWR solutions as they currently are."


So by his own admission, the introduction of AWR was only ever going to have a minor impact on them. So why are they now deducting significant amounts to cover this when by their own admission, the overheads should equate to just pence?!?

Spartan - you may wish to pass the above link to your solicitor.

[Yil]

Well, I've had an ongoing (written) conversation with Parasol over the last few weeks regarding this where they have, not surprisingly, now agreed with me that they have taken these over-deductions to cover their implementation of AWR. In my case this adds up to a hefty 4 figure amount.

Having reviewed Being paid and payslips : Directgov - Employment I have instructed Parasol to immediately refund all over-deductions incurred by myself.

If this refund is not forthcoming I will be initiating an employment tribunal process against them.