GMB Experts in the World of Work
Join GMB today
 Follow @GMB_union

M&S Distribution Swindon 97% Yes For GMB

Monday, February 9, 2015

Members At Marks & Spencer Distribution Centre Swindon Vote By 97% To Be Represented By GMB

It is a scandal that a company like Marks and Spencer, who boast about their ethical credentials, are exploiting workers in conditions akin to modern day slavery says GMB.

GMB members working at Marks & Spencer (M&S) distribution centre in Swindon have voted to be represented by GMB for collective bargaining.

The Ballot result, from a 76% turnout was a 97% YES, in favour of GMB recognition celebrates the breakthrough of gaining trade union recognition with a so-called Umbrella company.

The trade union recognition ballot was conducted under the auspicious of the regulatory body the Central Arbitration Committee (CAC):

GMB’s next step will be to submit the seven point claim and seek a pay rise that ensures each worker takes home all the money they earn. See Notes to Editors for the 7 point claim.

The Swindon distribution centre is owned and use by M&S. M&S contract DHL to run the distribution centre. DHL use recruitment agency, 24-7, to provide agency workers who are given employment contracts in the name of Tempay Ltd.. Tempay shares the same registered business address as 24-7.

Workers for Tempay Ltd have 7 hour per week contracts, but are given rotas for 37 hours. If they are not available for every day of rota they are disciplined for absenteeism, but the employer can cancel work days with no notice, and send workers home at any time, sometime as soon as they arrive for work.

Using ‘permanent’ contracts for the nominal 7 hours a week allows employers to evade the provisions of the Agency Workers Regulations (AWR), which came into force in 2011, that are designed to guarantee equal pay after 12 weeks employment. This abuse is popularly called the “Swedish Derogation”.

Many of the Tempay staff at M&S Swindon have worked at the site for several years. Over 75% of non-managerial staff are agency workers. Such long permanent assignments are contrary to the intention of the Swedish derogation and GMB believes indicate an regulation avoidance tactic.

Carole Vallelly, GMB Organiser, said, “GMB’s next step will be to prepare and submit a pay claim for GMB members, and secure for them a wage that allows them to live with dignity. It is a scandal that a company like Marks and Spencer, who boast about their ethical credentials, are exploiting workers in conditions akin to modern day slavery.”

Even 24-7 senior managers cannot explain the commercial relationship with Tempay. Staff don’t even have the dignity of knowing who they work for.

The actual employer, Tempay Ltd, although it employs 2,500 people has only two administrative staff for payroll, it has no managers, no HR department, and no internal structure for governance. It is a paper company that seemingly only exists for legal avoidance. Employment through these so-called Umbrella companies has spread like wildfire though distribution and construction sectors.

Low pay and precarious employment means workers on these contracts feel like second class citizens, unable to get a mortgage or be granted hire purchase or loans, and unable to even feel secure that they can pay the rent or feed their families.

Many prestigious High Street companies, including Marks and Spencer, use employment agencies in their supply chain to push wage costs down and inhibit staff from asserting employment rights. The culture of abusing agency worker status has led to employers treating their staff as commodities, breaking the moral contract that hard work should be rewarded.


Contact: Carole Vallelly, GMB Organiser on 07912 181476 or GMB Press Office on 07974 251823.

Notes To Editors:

1          GMB’s seven point employment rights claim wants solutions to the following serious issues:

1.   Agency staff  in the position of needing to be available for work, so they cannot take employment elsewhere, but are not guaranteed an more than 7 hours per week.

2.   Staff, including pregnant women, have turned up to work at 6:00 a.m. on a Sunday for a shift they had been required to attend by the rota, having needed a taxi to get to the site, to be immediately sent home without pay as they are not required, meaning they actually lose money.

3.   Staff working for the agency are issued inferior PPE compared to staff working for DHL. Staff working for the agency are not issued with warm clothes for outside work in winter compared to staff working for DHL who are issued with warm clothing.

4.   The precarious nature of their employment has made staff (before GMB was involved) afraid to assert their rights, and they have suffered bullying and arbitrary management.

5.   At the South Marston site, some 90% of 800 non-managerial staff (agency and hirer) are non-white, but of 82 managers, only 4 are non-white. Promotions are based upon a system of patronage and favouritism

6.   M&S claim to be an ethical employer. And according to their website, are signed up  the living wage: . Workers for Tempay earn the minimum wage of £6.50 per hour, the living wage in the UK is £7.85.

7.   M&S claim to be an ethical employer but use deliberate avoidance tactics to thwart the AWR in their UK distribution chain.

2          How Umbrella Companies Operate

An umbrella company is a company that acts as an employer to agency workers like construction and other workers. So instead of their being two parties the contractor and the worker, umbrella arrangements usually involve four parties – the worker, the contractor, the agency and the umbrella company.

In some workplaces there will be a company, and often multiple layers of subcontractors and employment agencies but the worker’s employment contract is with the umbrella company, not the agency.

Normally the agency will agree a job and pay rate with a contractor and then contact the worker about the job.  The umbrella company receives the payment from the contractor for the work done by the worker.  It processes the payment, deducting PAYE income tax, employee’s and employer’s National Insurance contributions and the umbrella company’s fee. 

The residual sum is then paid to the worker as net pay. Often workers are officially paid at the National Minimum Wage, despite having negotiated a pay rate far in excess of this figure. Pay is then partially re-boosted through scams using expenses, performance related pay and other methods.

Payslips are often so complex that members tell GMB that they do not understand how their pay is being calculated.

Many umbrella companies also withhold an amount of money that should be paid to the worker at a later date in the form of holiday pay but is not paid.

The benefit to companies and agencies of using umbrella companies is that of reducing tax and national insurance liabilities.  These  liabilities and other costs, including the cost of the employer’s NI contributions and the umbrella company fee for providing payroll services,  are passed on to the construction workers. This is an abuse.

There are companies negating their responsibilities of direct employment by using umbrella companies and forcing workers into accepting the terms offered or they quite simply don't get the work.

These spurious tax avoidance contracts leave staff with no employment or financial stability. They are very often put on zero hours contracts with holiday and other payments rolled up into one composite rate of pay. Workers are then forced, by the very nature of the contracts, to pay both the employees and the employers National Insurance contributions. This can cost them up to £120 per week. These parasitic companies then have the brass neck to charge between £20 - £30 admin fees per week for their troubles.

The practice of using umbrella companies is spreading to many sectors of the UK economy. The GMB wants the Government to step in to deal with these four party tax avoidance abuses and scams which are costing workers money and the Exchequer much needed revenues.



Share this page