The FCSA has unveiled the Terms of Reference for its new Independent Arbitration Panel (IAP).
Following calls on social media for the terms of the panel to be disclosed, Chris Bryce, CEO of the Freelancer & Contractor Services Association, delivered them to ContractorUK on Wednesday.
[Editor’s Note: The terms have since been uploaded to the association’s website here].
Created on July 9, the bundled file consists of five pages and four chapters, with the most relevant section for those calling to see the terms titled “Purpose and Scope.”
It is divided into three parts. The first part alludes to what Mr. Bryce said at the formation of the IAP in August – that the panel will be the “final arbiter” of where an “application for FCSA membership is rejected “.
But the terms reveal three areas where the four-person panel is barred from assisting with unsuccessful applications for association membership.
More precisely, the quartet cannot intervene if the rejection concerns the failure of the candidate to a test of “suitable and suitable person”; fail FCSA codes, or fail three types of pre-qualification test.
This pre-qualification test may relate to the “liquidity” of the candidate company; their “persons with significant control” or their “size”.
Thus, if a potential member of the association is rejected by the FCSA at the pre-qualification stage, for these three reasons but potentially others (“including”), the panel has no say.
Similarly, the terms state that the panel cannot step in to reconsider an application that has been rejected on the sole grounds that the prospective member does not like being rejected.
“Far from solving some of the problems”
“For the avoidance of doubt,” states 1(b) of Purpose and Scope, “mere dissatisfaction with the rejection of an applicant for membership is not sufficient cause to appeal to the IAP.
But ‘mere dissatisfaction’ is a polite term to describe how some of the contractors‘ advisers reacted when the IAP was formed by the association, but its terms were kept secret.
“A statement to the press about the appointment of certain people whose names we know goes a long way to resolving some of the issues that have arisen over the past few months,” Graham Webber of WTT Consulting said last week.
Along the same lines, Tom Wallace, also of the WTT – which, like the FCSA, assesses the compliance of umbrella companies, echoed: “I’m surprised [the terms] were not published at the time of the announcement.
“They must have existed and all parties must have accepted them, including FCSA members.
“Otherwise, why would panel members agree to participate without knowing their terms of reference? »
“Rather thin on the pitch”
Speaking to ContractorUK, chartered accountant James Poyser confirmed details of the FCSA arbitration panel were – so far – “rather thin on the ground”.
“Will this new panel be asked to assess whether members acted unfairly/unethically, or simply broke FCSA rules?” asks Mr. Poyser, Managing Director of inniAccounts.
“In the most contentious cases, these are diametrically opposed – actions may be deeply unfair to contractors, but no law or rule [may] were broken.
“Perceived error…perceived misapplication”
The second part of the “Purpose and Scope” of the IAP confirms that the committee is able to adjudicate “disputed results of a complaint brought by a worker against a member of the FCSA”.
But it seems that here, the panel will be confined to two areas.
Its terms state: “Where a worker engaged by an FCSA member has made a formal complaint and that complaint has not been upheld through the standard complaints review process, they may appeal to the IAP solely on the basis of (i) a perceived procedural error or (ii) a perceived misapplication or misinterpretation of the FCSA Charter, Constitution or Codes.”
“The FCSA arbitration panel could quickly be rendered useless”
Mr Poyser said: “Following reports of FCSA members threatening legal action against the body itself, this new panel could quickly be rendered useless – by larger [FCSA] the legal teams of the brollies who will simply insist that no rules were broken.
The third part of the IAP’s Purpose and Scope states that the same two conditions – “perceived error” and/or “perceived misapplication” will apply to FCSA member firms wishing to challenge the ” Sanctions” issued by the FCSA Board of Directors.
As with the second part, members cannot ask the committee to review the appropriateness of a sanction because they are simply dissatisfied with the sanction.
“Appointment and mandate”
And in terms of the type of penalties, they “may” include a financial penalty for violating the FCSA charter, constitution, or codes; suspension of membership; termination of membership.
Finally, in a very brief paragraph of what could actually be a very detailed section on the panel, given that it is an overarching “Appointment and Term of Office” title, the FCSA says only:
“The appointment will be made by the FCSA Board of Directors on the recommendation of the Chief Executive. With the exception of the CEO of the FCSA, appointment of any individual to the IAP will be limited to two three-year terms.
Speaking ahead of Mr Bryce disclosing the FCSA Independent Adjudication Panel’s ‘Purpose and Scope’ document, the contractor‘s paid leave lobbyist Contractor Voice said: ‘The [umbrella company] sector is in the dark about the powers of the IAP and what might cross his desk.