Orange Genie was suspended last November after the company’s procedures for detailing deductions from contractors’ pay were found to lack transparency. Allegations against the company of ‘salary skimming’ were unfounded, the FCSA’s Independent Arbitration Panel (IAP) decided, but Orange Genie was fined an undisclosed amount and suspended. During the six-month suspension, the company’s membership expired.

“Orange Genie will therefore not be accredited by FCSA unless and until they have successfully been assessed against the current membership criteria,” FCSA said in a press statement.

In its deliberations last year, the IAP – appointed by the FCSA – concluded that Orange Genie had breached two items in the Umbrella Code: the financial illustration provided to the employee did not clearly state the deduction of £2 that was being made; and the pay reconciliation provided to the employee did not transparently show an itemised breakdown of all employer costs.

Recommendations set out by the four-person panel, appointed by the FCSA, are non-binding but it is allowed to make suggestions to resolve the situation. “Our first principle should be improving compliance for the benefit of the industry as a whole and remedying the breach, as well as setting an example to all members of the FCSA,” the IAP urged.

This was the first time this process has been undertaken and followed a breach of Articles A3e and A17 of FCSA’s Code of Compliance as determined in October 2022.

Orange Genie followed the process to appeal to the IAP in October 2022. From the outset, it was agreed by all parties to accept the IAP’s findings in full. Following a hearing, the IAP, which was asked to examine only the breaches of Umbrella Code articles A3e and A17, issued non-binding recommendations in November 2022 that Orange Genie paid an immediate fine, took remedial action and was suspended from FCSA for six months whilst they worked to remediate Code breaches. FCSA accepted these recommendations in full.

Following these measures, and the submission of two independent reports, by BDO on behalf of FCSA, and by MHA Baker Tilly on behalf of Orange Genie, the IAP has determined that whilst Orange Genie historically were not transparent in their deductions, the IAP is content that Orange Genie is now compliant with Articles A3e and A17.

Since the incident, and following the IAP’s observations and resulting recommendations, FCSA said it has “further strengthened” its disciplinary procedures and has acted as requested to mitigate against the prospect of a recurrence of a breach of the code items involved.

FCSA randomly samples payslips, verifies them using third-party software and compares the output to the RTI returns made to HMRC by members. “We do this on an ongoing basis and will continue to do so,” the FCSA said.

“FCSA welcomes the conclusion to this case which demonstrates the importance of a robust disciplinary process and avenues for independent appeal. We will also continue the collection of random samples of payslips from members and utilising third-party software to verify payslip calculations and compare these with the corresponding returns to HMRC,” the FCSA said.

Chris Bryce, FCSA CEO, said: “We accept today’s determination, and acknowledge that Orange Genie have met the remediation requirements recommended by the IAP following Orange Genie’s breach of Article A3e and A17 of our Umbrella Code of Compliance… We have no doubt that members, along with the whole industry, will welcome the action. FCSA have taken to reinforce our requirements for full transparency and openness for workers engaged by our members.”

The IAP was chaired by Rebecca Seeley Harris. Members were Neil Carberry, James Collings and Carl Reader.

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