An umbrella company is a company that employs temporary workers on behalf of a recruitment agency, which then provides the services of the workers to their clients. The umbrella company operates a PAYE system for the agency workers. Recruitment agencies use these umbrella companies to reduce temporary payroll costs by instead charging these costs to the workers as fees.
Umbrella companies routinely violate workers’ fundamental rights by breaching holiday leave and pay entitlement, making unfair pay deductions, and failing to pay workers on time. This exploitation is exacerbated by the fragmentation of the employment relationship resulting from the use of umbrella companies because it is unclear who workers should approach to resolve these issues. Fragmentation also leads to confusion among the companies involved. For example, the TUC (Trades Union Congress) has cited the case of a locum physiotherapist who, having been forced to sign up to an umbrella company by the NHS Trust, was not paid for five weeks of work by his umbrella company employer. However, it is unclear who must take responsibility for the lost wages, with the NHS Trust, umbrella company, and recruitment agencies all refusing to do so.
It is thought that umbrella companies in the UK employ as many as 600,000 temporary workers. This number is set to increase following the government’s change to tax rules for contractors this financial year. Under the IR35 (or ‘off-payroll working rules’), employers may be liable for contractors’ tax and national insurance contributions. However, according to government guidance, these rules are unlikely to apply to employees of an umbrella company. This has led to a surge in companies transferring contractors to umbrella companies to reduce their tax and employment rights obligations.
The TUC has criticised the lack of governmental regulation of the umbrella sector, with General Secretary Frances O’Grady stating that “our inadequate regulations let dodgy umbrella companies off the hook”. The union has highlighted the government’s failure to appoint any enforcement bodies to its regulation following a recommendation from the Taylor Review into Modern Working Practices that such regulation should be increased.
To address the exploitation of workers by unscrupulous umbrella companies, the TUC has called for:
The Online Safety Bill was proposed five years ago and published in draft form in May 2021. However, it was only introduced into Parliament (the Commons) on 17 March 2022.
The first Bill of its kind to introduce online safety laws in the world, its main aim is to increase online safety accountability by tightening the controls on a platform people often use to hide behind when committing despicable acts such as bullying, harassment, the hurling of racist abuse or effectively become what is colloquially known as keyboard warriors.
In its accompanying note to the Draft, the Government stated as recognition of these woeful acts that ‘legal but harmful material… can range from online bullying and abuse to advocacy of self-harm to spreading disinformation to misinformation’. Furthermore, the Government recognises that ‘whilst this behaviour may fall short of amounting to a criminal offence, it can have corrosive and damaging effects, creating toxic online environments, and negatively impacting users’ ability to express themselves online’.
The Bill, therefore, introduces ‘tougher and quicker criminal sanctions for tech bosses and new criminal offences for falsifying and destroying data’, in the effort to take to task not only those who perpetrate such acts but those companies who allow such acts to take place on their online platforms.
Ofcom, the communications watchdog, will be in charge of the implementation of this Bill and thus will have the statutory power to impose fines of varying degrees on companies who refuse to comply with the substantives of the Bill. The Bill introduces an imposition of a duty of care on tech firms and bosses and to which non-adherence would result in significant fines imposed by Ofcom. Some of the responsibilities imposed on tech companies include undertaking risk assessments to ascertain the presence of online abuse and to seek ways to prevent such misuse of their platforms.
As is perhaps expected, there is some criticism of the Bill, particularly its perceived tardiness. Understandably, those victims and families of cyberbullying feel its introduction has come too late, especially those who lost family members via suicide due to online harassment.
Most of us will be aware of so-called ‘famous’ victims such as Caroline Flack, whose unfortunate death inspired the be kind movement, a movement that unfortunately flits according to social media trends and ideals. However, many of us may not be aware of Felix Alexander, Hannah Smith or Ciara Pugsley, all teenagers and all who committed suicide as a result of cyberbullying.
That is not to discount the many adults who suffered the same unfortunate fate owing to the overwhelming effects of cyberbullying. Also, cyberbullying affects MPs themselves, especially if a woman, with victims including Dianne Abbott, Nicky Morgan, Amber Rudd and Heidi Allen. Let’s also not forget Sir David Amess, who was tragically stabbed to death whilst serving his constituency and after receiving many death threats online.
Another criticism of the Bill is that it feels like a censor charter. Technology companies think that as they will be subject to provisions of the Bill, they will be aware of what needs to be censored in keeping in line with the requirements of the Bill.
However, this power of censorship threatens free speech. Anything that anybody characterises as misinformation, disinformation, corrosive or damaging speech or conduct or simply a lack of belief in someone else’s ideals could be removed by companies for fear of incurring fines, some of which could stretch into millions of pounds. Therefore, at this juncture, the test implied by the Bill feels at the mercy of subjectiveness.
Finally, as the Bill gives the Secretary of State relatively unfettered powers over Ofcom, such as guiding Ofcom on how to exercise their powers and to make amendments to their Codes to reflect government policies, there is the fear that Ofcom will lose its independence from government influence, akin to repressive government regimes worldwide.
We must be mindful that all valuable points made through criticisms are subject matter that can be fleshed out as time progresses, same as with any other legislation that has come into existence. Additionally, whilst future amendments to the Bill are foreseeable, the focus must remain on protecting all those with social media presence, particularly those who are vulnerable and especially those who are children.
The Bill, whilst introduced a lot later than anticipated, is a positive step towards holding accountable those who feel it is otherwise ok to hide behind the security of a screen and make the life of others miserable and unbearable.
Linklaters, with around 70 lawyers based in Russia, was the first law firm to announce they were closing their Moscow office following Vladimir Putin’s unprovoked invasion of Ukraine and further stated that it ‘will not act for individuals or entities that are controlled by, or under the influence of, the Russian state, or connected with the current Russian regime, wherever they are in the world’.
Their departure was followed by that of Dentons, Baker Mackenzie, Allen & Overy, Clifford Chance and DLA Piper, to name a few. Akin Gump Stauss Hauer & Feld, with a Moscow presence of 24 years and the last prominent international law firm in Moscow, has confirmed it will be closing its Moscow office. The withdrawal of Akin Gump Strauss Hauer & Feld means the all 25 large international law firms will no longer operate in Russia until further notice.
Additionally, the safety of international lawyers based in Moscow was another critical factor in the decision to withdraw, with Skadden, Arps, Slate, Meagher & Flom stating that the relocation of its lawyers was ‘to ensure their safety in the face of increasing anti-American sentiment within Russia’, although they will leave their Moscow office open for now.
The legal profession is often characterised as a pompous sector lacking moral fibre, with its components, either human or legal entity, are there to ruthlessly take advantage of vulnerable clients, chase unjustified profits and fatten bonus packages. Of course, we know this is not all true. Granted, there is the occasional bad egg. However, occasionally it happens and is therefore unrepresentative of the legal sector.
In echoing worldwide sentiments and condemnation of Russia’s actions, DLA Piper, in a statement to the Financial Times, stated that ‘in light of Russia’s actions in Ukraine and the resulting humanitarian crisis, and our consequent decision not to act for clients connected to the Russian state, we have concluded that maintaining a presence in Russia is not aligned with our values, and therefore no longer viable.’ Akin Gump further stated, ‘they were deeply saddened and shocked by the events in Ukraine and the tragic and senseless loss of so many innocent Ukrainians’.
It was inevitable that other law firms would follow Linklaters. However, it was unexpected that all significant international firms would follow suit. It is worth noting that the withdrawal of these firms, whilst it results in loss of revenue to those firms, is a means of sidestepping sanctions imposed on Russia by the rest of the world. Furthermore, the withdrawals apply pressure on Russia.
How will Russian state-owned companies gain representation in legal affairs through firms lacking the expertise of the 25 that justifiably withdrew from Russia?