Mr D South v Danbro Employment Umbrella Ltd — 2021

The claimant, a qualified barrister and solicitor, worked for Danbro Employment Umbrella Ltd from 17 June 2019 to 1 December 2019 on a Cardiff Council assignment. The tribunal found that the agency email quoted a £40 per hour umbrella rate, but the respondent later explained in a 14 June 2019 call and in a written contract and personal illustration that the arrangement was an umbrella company model in which employer national insurance, apprenticeship levy, a £20 margin, and holiday pay were all funded from the assignment rate. The illustration estimated net weekly pay at £916.59 and the payslips reflected the same structure.

On the unlawful deduction claim, Mr South said the deductions for employer's national insurance and the employer margin were unlawful and relied in submissions on ITEPA 2003 s.61N and HMRC guidance. The tribunal held that the contractual wages properly payable were the National Minimum Wage plus discretionary bonus, not the whole £40 uplift, and that the higher assignment rate was money payable between the agency and the respondent rather than wages due to the claimant. It therefore held the employer NI and margin were not deductions from wages within s.13 ERA 1996; alternatively, they were authorised by the oral and written terms notified before the deductions began.

On holiday pay, the tribunal found there was a genuine and sufficiently transparent arrangement under which holiday pay was advanced weekly and later offset when leave was taken. Mr Twitchett explained the system orally, the claimant agreed an annual leave pay advances form, the contract and illustration identified the holiday pay element, and the payslips showed holiday pay advances. Applying Robinson-Steele and Lyddon, the tribunal held the arrangement satisfied the Working Time Regulations 1998 on the facts of this case. Both the unauthorised deduction from wages complaint and the WTR complaint were dismissed.