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Breakthrough trade union recognition with an “umbrella company”

GMBBallot result: 383 YES, 8 NO, 2 spoilt, 76% turn out.

GMB union members working at a Marks and Spencer distribution centre have voted that they wish to be represented by GMB for collective bargaining. Although the Distribution Centre is owned and 100% dedicated to M&S, they contract DHL (previously Wincanton) to run the Distribution centre, who use a recruitment agency, 24-7 Recruitment to provide agency workers, who then are given employment contracts with yet another company, Tempay Ltd. Tempay shares the same registered business address as 24-7.

Siôn Simon MEP, Labour’s European Parliament spokesperson on employment, recently said:

“Supposed agency workers are having their wages depressed and their rights and dignity abused. Companies such as Marks and Spencer should be ashamed of this use of modern slavery. The GMB have accused Tempay Ltd of using the Swedish derogation in the Agency Workers Regulation as a way to pay a huge amount of staff a lower wage than their permanent colleagues. Some of the employees have worked in the same role on the site for eight years and are still not in a position to be able to take out a loan, ask for a mortgage or even book a holiday due to the precarious nature of their work.”

Umbrella companies provide an employment contract for workers supplied by an employment agency to a company acting as a hirer. So instead of their being two parties the employer and the worker, umbrella arrangements usually involve four parties – the worker, the hirer, the agency and the umbrella company. Instead of working for the company whose name is above the door, umbrella companies create a maze of paperwork to stand between workers and their legal rights.

Workers for Tempay Ltd have 7 hour per week contracts, but are given rotas for 37 hours. If they are not available for every day of rota they are disciplined for absenteeism, but employer can cancel work days with no notice, and even send them home as soon as they arrive for work. A non-reciprocal arrangement reminiscent of bonded labour. One shop steward, Domingos Dias, has been issued a written warning for absenteeism, even though he had worked more than his contracted hours during the relevant period. This lack of mutuality of obligation means that the contract bears the hallmarks of bonded labour.

Many of the Tempay staff have worked at the same Marks and Spencer site for several years. Over 75% of non-managerial staff are agency workers, but agency workers are not used to deal with fluctuating work volumes, but to lower staffing costs of effectively permanent employees. Such long permanent assignments are contrary to the intention of the Swedish derogation, and indicate clearly that this is an avoidance tactic.

The actual employer, Tempay Ltd, although it employs 2500 people has only two administrative staff for payroll, it has no managers, no HR department, and no internal structure for governence. It is a paper company that seemingly only exists for legal avoidance. Employment through these so-called Umbrella companies has spread like wildfire though distribution and construction sectors. Household name companies, including Marks and Spencer, use Employment Agencies in their supply chain to push wage costs down, and inhibit staff from asserting employment rights. The culture of abusing agency worker status has led to employers treating their staff as commodities, breaking the moral contract that hard work should be rewarded.

I am delighted that we have made a significant first step in organising in this difficult environment, and we will not stop until we have achieved justice.


  1. jeffrey davies says:

    there we have slaves without rights we been sold down the river by the tory government jobs get less pay gets less and rights none existant strangely they say jobs are abundant yet these companies set up to keep the workers down and profits high but not to the p[eople of britain all their profits taking offshore avoiding tax

    1. Robert says:

      Not forgetting it was happening under labour and they did sod all about it, made a few promises but that is as far as it went. This type of money racket has been going on for years.

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