Construction union UCATT has called for the abolition of umbrella companies, following the collapse of a sub-contractor on the Alder Hey hospital site.

Last month subcontractor One Four Four (UK Limited) went into receivership. The firm employed over 100 workers, but only two directly by the company. Many were either officially self-employed and paid via the Construction Industry Scheme (CIS), or paid via an umbrella company.

"Despite having worked for the same employer for many years the workers seem to be in a legal limbo as they may not be entitled to redundancy payments or a protective award for the company’s failure to inform and consult them before making them redundant," a statement from UCATT said.

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Andy Fisher, Regional Secretary of UCATT North West, said: "This is a complete travesty. Most of these workers were employed by the same company for many years but due to a tax dodge they are being denied employment rights. This is clearly unfair and unjust."

The 50 workers formerly employed by One Four Four on the Alder Hey Hospital project have been hired by Crown House a subsidiary of main contractor Laing O’Rourke, but will continue to be paid via an umbrella company.

Mr Fisher added: "We will examine every possible legal avenue to see if there is a way of ensuring that these workers receive the compensation they deserve."

(IT/MH)