A Devon man has formed a national organisation aiming to close a loophole which is putting Britain’s 1.7million temporary workers at risk of losing billions of pounds in holiday pay each year.
Jacob Bellas, from Newton Abbot, has set up Contractor Voice and is lobbying for a change in the law to prevent “immoral” umbrella firms from skimming off employees’ holiday pay.
Mr Bellas, an operating department practitioner, was himself the victim of the loophole when he found “several thousand pounds” in holiday pay he was entitled to after working for the NHS was lost when a third party umbrella company went out of business without paying him what he was due.
So he set up Contractor Voice to campaign for a legal change on behalf of other workers like himself, and win back money they have already lost, and said: “They kept my holiday pay, that niggled me.”
Currently, many freelance workers and contractors are employed not by the company they are doing the work for, but by a third party recruitment agency or umbrella company, which then pays their wages.
The employer pays the umbrella firm which then pays the worker. The money paid to the third party company includes an amount the worker is due for their statutory entitlement to 5.6 weeks paid time off. This cash is put aside and drawn on by the worker when that person wants to take holiday.
This has not always been passed on to the worker because some umbrella firms have a small-print clause which gives a deadline for these claims. And if workers don’t ask for the money before this date they lose it.
Mr Bellas said the practice, which is receiving growing media attention, is “legal - but morally it is wrong”.
He said it affects a wide variety of freelance and contract workers including in healthcare, construction, IT, engineering, logistics, veterinary, professional and commercial services, and banking and financial services.
He said: “Accrued holiday pay is ring fenced for the contractor, but (in some cases) the umbrella firm is not releasing it and not informing contractors.”
Mr Bellas said that legally umbrella firms are within the law to do this and said it is a common practice, but stressed it amounted to: “Skimming off pay.”
“Contractors should be aware this is happening,” he said and added he is now looking at seeking legal action and a change in the law, and wants freelancers and contractors to get in touch if they think they are not receiving what is due.
“I have been speaking to legal firms about a group litigation claim,” he said. “I have gathered evidence and called out an umbrella company for doing this.
“But the only way I see this process changing is if there is a change in holiday pay law so all holiday pay goes to the employee at the end of the year.”
He added: “Ultimately, I would like to see the companies that have been engaging in any immoral practice at the expense of contractors called out and the contractors that have been wrongly and immorally put in a position where they are out of pocket, paid what is rightfully owed to them.”
Mr Bellas set up Contractor Voice in July 2021 and has been contacted by people from across the South West and nationally.
“Throughout my journey so far with Contractor Voice I have been amazed at how much support there is for contractors,” he said. “I have had some fantastic conversations with extremely influential people within the sector, who are not only supportive of our campaign but are also battling for change. My advice for contractors currently, whilst we fight for this change, is to learn from your own and the experiences of others, there is information online and a range of people campaigning for positive changes within the sector, check your payslip every week and don’t be afraid to ask questions.”
Contact Contractor Voice by emailing: beheard@contractorvoice.org or visit https://contractorvoice.org
