Contractor urged to drop brickwork subcontractor because of its scheme to avoid NI contributions.
Laing is under pressure from unions to drop a subcontractor that they claim is operating a dubious self-employment scheme.

UCATT organiser Ron McKay said he was shocked to learn that Laing had let the brickwork contract for a £30m shopping village in Braintree, Essex, to Chelmsford-based brickwork contractor Galostar.

Galostar hit the headlines last year after details emerged of a scheme it was operating that enabled the company to avoid paying employer’s National Insurance contributions.

Under the scheme, workers engaged by the firm become shareholders in a separate company formed by Galostar called Fleetbrook. Each worker is paid a wage of £60 a week – below the threshold for paying employer’s and employees’ NI contributions.

The rest of their earnings are made up by weekly advances on dividend payments from the distributive profit of Fleetbrook.

Galostar is operating this scheme to avoid paying tax and NI, and Laing seems happy

A leading tax specialist who examined the scheme said it was in violation of the Companies Act.

McKay said: “Galostar is operating this scheme to avoid paying tax and NI and Laing seems quite happy to do business with it regardless. It’s a disgrace.” McKay said he had written to local MP Alan Hurst and the regional Labour-controlled council to ask them to intervene.

A spokesperson for Laing said Galostar had won the contract on a number of criteria, including quality and price. McKay pointed out that: “Galostar can offer a lower price than legitimate employers because it does not pay employer’s NI or give its workers minimum legal rights like sick pay or paid holidays.” Galostar director Eddie Garty was unavailable for comment but had earlier said that the vast majority of his workforce was not employed through the scheme.

McKay said: “One bricklayer worked for Galostar for two weeks in December and has been told he must sign documents saying he was a shareholder in Fleetbrook or it won’t release the money it owes him.” Jonathan Rawnsley, project director for the scheme’s developer, Freeport Leisure, said: “We have been assured by Laing that it has made a thorough financial investigation into Galostar and has been satisfied by its findings.” Rawnsley said Laing had informed him that Galostar was affiliated to the Transport and General Workers Union, a claim denied by T&G construction officer Bob Blackman.