SCOTTISH Labour slammed the SNP yesterday for awarding contracts to companies that blacklist workers and pay them less than minimum wage.

Economy spokeswoman Jackie Baillie attacked the party for giving public-sector contracts to umbrella companies — firms which act as middlemen to contractors and mainly temporary employees.

Moving a motion against blacklisting, Unite delegate Eamonn Dillon told conference that bringing migrant workers to Scotland to work on public contracts for less than the minimum wage was “widespread amongst umbrella companies.”

Ms Baillie’s critisism of the practise came the same day that Unite the union called for umbrella companies to be outlawed after a BBC report exposed how construction workers are falling victim to wage theft.

BBC Look North showed how workers operating via umbrella firms are losing huge deductions from their pay.

Umbrella company workers have to pay employers’ and employees’ national insurance contributions as well as a tax rate of 45.8 pence in the pound on eligible earnings.

Workers often have their holiday pay rolled into the rate, meaning they are unpaid when taking leave.

If they put money into an auto-enrolment pension they have to pay both employee and employer contributions. And workers also have to pay a fee of around £20 a week to be paid in this manner.

Unite acting general secretary Gail Cartmail said: “The government needs to end the misery of umbrella company workers by outlawing this practice and all forms of bogus self-employment.”

The government has estimated that 430,000 workers are paid via these firms. Sectors such as logistics, supply teaching and pharmaceuticals are increasingly using this form of employment.
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