Unite, the UK’s construction union, began legal proceedings against the Munnelly Group and several of its subsidiaries in March 2019, claiming its workers’ were being denied holiday pay and other basic employment rights. The cases are set to progress to their first hearing at Watford Employment Tribunal on 13 December.

Uniquely, while the Munnelly Group is primarily a logistics company that provides workers to major construction sites and claim to currently have a database containing details of over 5,000 operatives “whom [they] have employed”, evidence uncovered by Unite shows it actually channels its workers through one of its own subsidiaries, Bishopgate Contracting Solutions Ltd, to pay their wages, deduct a management company margin fee for doing so and issue some with contracts claiming the worker is self-employed and has no worker rights.

Strategic Cases Unite

The claims which are being taken by Unite’s Strategic Cases Unit are on behalf of 42 Unite members and are lodged against five different Munnelly companies (Munnelly Support Services Ltd, Munnelly Group plc, Bishopgate Contracting Solutions Ltd, Munnelly Security Services Ltd and Guardior Security Ltd).

The claims which were filed at the Watford employment tribunal in and following March 2019, challenge the workers’ employment status (arguing they are bogusly self-employed) and claim unlawful deduction of wages in respect of the management company margin, which is deducted from the workers’ wages, and the lack of holiday pay.

Apprenticeship levy

In some cases Unite is also pursuing the Munnelly companies for the deduction of apprenticeship levy and employer’s national insurance contributions from pay, as well as breaching the right to paid holidays.

The legal claims state: “It is asserted that the respondents [Munnelly Group and its subsidiaries] are trying to use sham employment status to circumvent the claimants’ right to holiday pay and other rights afforded to workers.”

The Munnelly Group supplies labour to many blue chip construction projects including High Speed Two (HS2).

New heights

Howard Beckett, Unite assistant general secretary for Politics and Legal, said: “The Munnelly Group has taken the efforts of construction companies to divest themselves of responsibility for their workforce to new heights.

“Workers are being denied basic employment rights and are forced to be paid by ‘another company’ that charges them for the ‘privilege’ and is in reality being operated by the same organisation they are working for.

“Umbrella and payroll company shams remain endemic in construction and they exist to ensure workers are denied basic employment rights, so that the actual employer can reduce their costs by avoiding paying employer’s national insurance contributions, holiday pay, pensions and sick pay.

“While the Munnelly case is one of the most extreme examples of the payroll and umbrella company arrangements that operates in construction, it is just the tip of the iceberg as there are similar cases throughout the sector.

“This is exactly the type of case Unite’s Strategic Case Unit was established to fight and which the Labour Party’s pledge to end bogus self-employment would rid us of, where there is a clear injustice to workers and where employers have gone to extraordinary lengths to deny workers their rights.”

Same office

Paul David Munnelly is a director of both Munnelly Support Service Ltd and Bishopgate Contracting Solutions Ltd and it is understood that both organisations have had the same registered office since March 2015.

In a LinkedIn post last year Mr Munnelly stated that: “candidates arranged by Munnelly Support Services Limited and Bishopgate Contracting Solutions will receive preferential rates for payroll services”. These companies are part of the same group and Munnelly Group plc, Munnelly Support Services, Guardior Security Ltd and/or Munnelly Security Services Ltd are charging their own workers to be paid their wages through Bishopgate Contracting Solutions Ltd.

ENDS

Notes to editors:

Payroll company: Under a payroll company the worker is claimed to be self-employed and is therefore denied basic employment rights, including holiday pay. The worker has money deducted from their weekly pay, in order to be paid in this manner.

Umbrella company. Under an umbrella company the worker becomes effectively the employer and the employee for tax purposes. The worker will have employer’s national insurance contributions deducted from their pay as well as holiday pay. Employer pension contributions are also deducted. Increasingly workers are also having the apprenticeship levy deducted. The worker also has a weekly amount deducted from their pay to be paid in this manner.

Government washes hands on umbrella companies

For more information please contact Unite senior communications officer Barckley Sumner on 020 3371 2067 or 07802 329235.

Email: barckley.sumner@unitetheunion.org

Unite is Britain and Ireland’s largest trade union working across all sectors of the economy. The general secretary is Len McCluskey.