British construction firm Balfour Beatty has denied reports by the Unite union that it has banned the use of payroll ‘umbrella’ companies on one of its major contracts, reports Construction Index. Earlier this month, Unite said it had come to an agreement with Balfour Beatty to ban the use of umbrella companies on a major highways contract in the North West of England. Unite had cited Balfour’s own policy document, Modern Slavery and Labour Exploitation: Guidance and Requirements for Suppliers, published in January 2018, to persuade Balfour not to use umbrella workers for one of its major contracts. However, Balfour Beatty says that its policy has been misinterpreted. Its modern slavery policy is aimed not at the use of umbrella companies in the UK but at the sort of indentured servitude endured by south Asian workers in the Middle East, or where labourers are charged a finder’s fee. A Balfour spokesperson said that if UK construction workers want to use an umbrella company, that is their legal choice and it is up to government to make up the rules.

A Unite spokesperson responded “There seems to have been a bit of a misunderstanding regarding the full implications of Balfour’s anti-slavery policies. By barring direct and indirect fees Balfour Beatty are effectively barring umbrella companies, as this is how these companies make their profits. Unite will be working to ensure the companies policy is fully complied with on other projects.”

Despite the confusion, Balfour Beatty said that it has no plans to re-draft its modern slavery policy to clarify that it considers umbrella companies to be exempt.