I'm very pro-union btw but my understanding is that IR35 doesn't apply to FTEs, so no need for full union rights - at least in the case of short-term contractors (who choose money and flexibility over security). Agency temps (on equivalent or lower pay than FTEs) are a different matter and may need protection. Long term contractors are disguised FTEs so their choice again, probably not normally an issue.
But perhaps I'm misunderstanding the law or the point?
Whether to hire someone as an employee, on FTE or in-scope IR35 is a business decision. If businesses wanted everyone could be hired as a "contractor" without employment rights from tomorrow. It's not like workers have a choice now, apart from looking for a job elsewhere.
As someone who's outside IR35 I can't see the point in being inside rather than just taking a full time role with a company, sure there's some flexibility but the disadvantages outweigh the advantages in my view
The challenge in regulating umbrella companies lies in the similarity of their business structures to those of large consultancies. They operate nearly identically, and differentiating between the two would require an additional, layer of regulation that could potentially face legal objections.
IR35 itself is more about preventing professionals from departing large consultancies, establishing direct client engagements, and consequently, fostering competition. Ultimately, many small enterprises begin with the business owners personally providing services until they expand sufficiently to employ additional staff. However, IR35 essentially nips that in the bud and ensures the talent stays in the employment pool, corporations can exploit.
IR35 is about making up the loss in revenue of employers National Insurance, as PSC shareholders can avoid NI by paying themselves mainly in dividends rather than a salary. The dividend tax makes up for the lack of employees NI on dividends but there’s no employers equivalent.
Large companies use umbrella’s because they don’t want to take on the burden of employing contractors but depending on how the relationship is setup is the umbrella becomes the contractor’s employers (assuming engaged direct rather than through their PSC) and that means the contractor has a whole set of employment rights — sick, holiday, pension that the umbrella is now responsible for
