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Five million workers across Britain’s supply chains risk being cheated out of their entitlement to holiday pay and the minimum wage, unions have warned.

The Trades Union Congress (TUC) said on Monday that workers at outsourcing companies, franchises and recruitment agencies are vulnerable because they cannot challenge their parent employer if they do not receive their legal entitlements.

It has called on the UK government to emulate Australia’s Fair Work Act, under which franchisors and holding companies can be held jointly responsible if their franchisees or subsidiaries do not follow workplace laws.

The TUC general secretary, Frances O’Grady, said millions of UK workers – from fast-food outlets to building sites – cannot challenge their parent companies over workplace abuses.

“Employers have a duty of care to workers in their supply chains. They shouldn’t be allowed to wash their hands of their responsibilities,” said O’Grady.

“Joint liability must be extended to parent employers. Without it they can shrug their shoulders over minimum wage and holiday pay abuses.”

About 3.3 million UK workers are employed through outsourced companies, 615,000 are employed by franchise businesses and at least 1 million are employed by recruitment agencies, umbrella companies and personal service companies.

From this month, workers aged 25 and over are entitled to at least £7.83 per hour, up from £7.50. But some employers have been failing to meet this obligation. Last month the government reported that 179 companies had recently been fined for not paying workers the minimum wage, including the hotel group Marriott and the restaurant chain Wagamama.

According to a new report from the TUC, more than half a million employees are being paid below national minimum wage rates and at least 2 million workers do not receive legal minimum paid holiday entitlements, worth £1.6bn in paid holiday per year.

O’Grady plans to raise the issue with Sir David Metcalf, Britain’s first director of labour market enforcement. He was appointed last year with a mandate to crack down on unscrupulous employers.

The government says it is already proposing “enhanced rights and protections” for workers in Britain’s supply chains.

“Under the package of proposals, all 1.2 million agency workers will be able to request a more stable contract and receive a clear breakdown of their pay,” said a spokesperson for the Department for Business, Energy and Industrial Strategy. “We are also considering repealing laws allowing agencies to employ workers on cheaper rates.”

Source: Yahoo News UK

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