British construction firm Balfour Beatty has made an agreement with trade union Unite to ban the use of umbrella companies on a major highways contract in the North West of England.

According to the Construction Index, Unite is hailing the commitment from Balfour as a major breakthrough in its campaign against what it sees as exploitation by umbrella companies.

The Construction Enquirer reports that Balfour manages the Area 10 highways contract, which covers motorways and major roads in Merseyside, Cheshire, Lancashire and Greater Manchester.

As well as banning umbrella companies (which includes agency workers employed on the project), Balfour will also permanently employ any agency worker who has been on the project for at least three months.

Unite cited Balfour’s own policy document, Modern Slavery and Labour Exploitation: Guidance and requirements for suppliers, published in January 2018.

Page seven of the document states: “Subcontractors or recruitment agencies providing labour are required to provide us with the following information… Evidence that all staff, including temporary workers, have a written contract of employment and that they have not had to pay any direct or indirect fees to obtain work.”

Unite said it reached the agreement with Balfour on the basis of this statement.

Unite regional co-ordinating officer Andy Fisher, commented, “This is a significant decision. Not only does it alleviate the misery of umbrella companies on this contract but it demonstrates that, through negotiation, Unite is able to stamp out the misery of umbrella company exploitation.

“Unite will not only be ensuring that the agreements on umbrella companies and agency labour is extended to whoever inherits the Area 10 contract but extends these commitments to other similar contracts,” Fisher said.

Unite has previously targeted umbrella companies and have called them ‘immoral’. Last year they called on the NHS to ban umbrella companies operating throughout the organisation.

Umbrella companies have been criticised because they charge the worker both employers’ and employees’ national insurance contributions and often add on fees that are not always clear.