Employment assumption crucial to ending bogus self-employment crisis

unite-white-out-of-redUnite submission also calls for new public procurement rules to curb abuses

April 3rd: Trade union Unite today (Sunday April 3rd) called for a suite of new measures to tackle bogus self-employment, which is particularly prevalent in the construction sector.  In its submission to the Department of Finance’s Consultation on the use of Intermediary-Type Structures and Self-Employment Arrangements, Unite makes a number of proposals including that:

  • The burden of proof should be on an employer to show that a worker is not self-employed;
  • The Departments of Finance and Social Protection, together with the Revenue Commissioners, should undertake a study of the fiscal impact of self-employment, which has been estimated as up to €80 million in the construction sector alone;
  • Public procurement rules need to be strengthened to prevent abuses, including a provision to bar any company engaged in bogus self-employment from bidding for future public contracts, and a provision for the contracting Department or Agency to levy penalties on a contractor found to be in breach.

Commenting, Unite Regional Secretary Jimmy Kelly said:

“Bogus self-employment, where workers are nominally self-employed but actually working under the direction of an employer, enables rogue employers to evade their responsibilities.  Involuntary self-employed workers have few employment rights:  they are often underpaid, and cannot access PRSI-funded supports such as unemployment, sickness or occupational injury benefit.

“Bogus self-employment is especially prevalent in the construction industry, where nearly 40 per cent of workers were categorised as self-employed in 2014.  Not all of this self-employment is bogus – but a lot is, and that is costing workers, the taxpayer and, ultimately, the economy as a whole.”

Unite Regional Officer for Construction Tom Fitzgerald added:

“The five-month long dispute at a JJ Rhatigan site, where workers ended up being paid just €5 per hour on a Government-funded school building project, highlighted the scandal of bogus self-employment and the need for new public procurement rules to help weed out rogue employers.

“Rather than forcing workers to prove that they are employed, all contracts for labour in the construction sector should be assumed to be employment contracts unless the employer can prove otherwise.  That means that the principal contractor should be held responsible for payment of social insurance and compliance with other employment conditions.

“Unite is also seeking new public procurement measures to help stamp out bogus self-employment.  Additional resources need to be provided for investigating allegations of bogus self-employment, coupled with a provision for Government departments or public agencies awarding contracts to levy penalties on any contractor found to be engaging in the practice.  In addition, any contractor found to be in breach should be prohibited from bidding for future public contracts.

“Bogus self-employment is undermining both the construction sector and the wider economy.  A sustainable recovery cannot be built on a foundation of precarious work”,  Tom Fitzgerald concluded.

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