THE TUC called on the government today to ban the use of “scandalous umbrella companies” to employ agency staff over fears they deprive workers of basic rights.

“Umbrella” companies — employment agencies and other companies supplying workers to bigger employers — have come under increased scrutiny as their use becomes more widespread.

A TUC investigation revealed these umbrella companies often hold back agency workers’ pay and deny their holiday rights, warning that they will be used even more as employers seek more workers following the end of pandemic restrictions and an expected expansion of work and the economy.

The report warned that under the system an employment agency can supply a worker to one company, which then sends the worker to another company, leaving workers “passed from pillar to post” and unsure of who to speak to about problems.

The TUC says umbrella companies and the “scandalous working practices” associated with them “have no place in modern Britain” and should be made illegal.

It also wants greater trade union access to workplaces, new trade union rights, and for employers to be made responsible for workers’ rights when they are employed through a “supply chain” of employers.

TUC general secretary Frances O’Grady said: “Everyone deserves decent work. But too many low-paid workers are denied the wages they were promised and basic legal rights like holiday pay because they work for umbrella companies. 

“Lots of them are the key workers we all applauded — like social care workers, teachers and coronavirus testing staff.

“These scandalous workplace practices have no place in modern Britain. But our inadequate regulations let dodgy umbrella companies off the hook — allowing them to act with impunity.

“Employers shouldn’t be able to wash their hands of any responsibility by farming out their duties to a long line of intermediaries.

“Enough is enough. It’s time for ministers to ban umbrella companies, without delay.”

Clarke Bowles, director at umbrella company Parasol, said that he was “disappointed” with the TUC’s call, and said it “lumped compliant and ethical providers” with tax avoidance schemes and frauds.