'The biggest con going' - spotlight falls on 'bogus self employment' amid fears it is costing the state €80m per year
A plasterer who says he has been forced into “bogus self-employment” has left him facing a life of uncertainty.
Bogus self-employment is a term coined by labour activists which refers to workers being forced to name themselves as sole-traders in order to be hired. They are then still treated as employees despite their sole trader status.
They are then stripped of employment benefits such as sick or holiday pay, while employers do not have to pay these workers’ PRSI contributions.
A Government report on the practise has not yet been published, leading to mounting opposition pressure not to let the report “gather dust on a shelf”.
The worker, a plasterer who is based in Dublin and did not wish to be named, said he was earning more money 18 years ago than he is today, because bogus self-employment has dramatically driven down wages.
“The worst thing, I think, is the uncertainty. The uncertainty of getting your wages and the uncertainty of your future. If you go to apply for a mortgage it’s a lot of hassle,” he said.
There's so many negatives it's ridiculous.
He said it is easy to feel “invisible” in such a system, where “nobody is responsible for you” and nobody is concerned with your welfare.
“You’re just going from one place to another, you’ve no real rights, no holiday pay, all this type of thing,” he said.
“A lot of people think construction is booming at the moment but it only is for people getting the big contracts.
“There’s a massive divide between the prices they’re getting and the prices they’re willing to pay out,” he added.
A working group was formed in 2016 to look into the practice. This was followed by a public consultation, which received 23 submissions from interested parties.
“Preparation of the report on this consultation process has taken some time. It was necessary to tease out the diverse issues relating to employment status, PRSI insurability and tax,” a spokesperson for the Department of Finance said.
Meanwhile, a Dublin City councillor who has also worked as a carpenter for 30 years, described the practise as “pure abuse” and “the biggest con going.”
People Before Profit councillor Andrew Keegan said the practice is often painted as a way for construction workers to pay less tax and earn more money, but in reality its effects can be detrimental.
He said: “It’s corruption as far as I’m concerned. It’s massive exploitation.”
Finding it difficult to get work without a self-employed status, he said he unwillingly entered into the practice.
Almost overnight, he said, he went from being an employee with very few costs, to a self-employed worker with mounting bills.
Forced to provide his own equipment, insurance and safety certification, he explained that workers were “putting themselves at risk” if they didn’t shell out for the new requirements.
“By the time you took into account all the expenses, you were actually earning less than the minimum wage,” he said.
“By the time you were finished, somebody in McDonalds was earning more than you were and no way would they put themselves at the same level of risk or endurance as you would working in the construction industry.”
Cllr Keegan said he experienced his “biggest humiliation” when he was between jobs and went to sign on for the dole.
“I said ‘look, I’m going to need some help here. My wife is on part time and money isn’t coming in on my end.’ They told me no, you’re entitled to nothing,” he said.
He was told that it was only his last job that was taken into account, and as he had been bogus self-employed, he was not entitled to social welfare, as no PRSI had been paid and Mr Keegan said he was not aware of his requirement to do so at the time.
He said: “I just couldn’t believe it. I was over 30 years in construction at that point and they said ‘there’s nothing we can do for you. You should have looked after all your own insurance and payments’,” he said.
“I was caught by the biggest con going.”
The practice has also come under scrutiny by trade unions.
At the beginning of 2016, the Irish Congress of Trade Unions estimated that bogus self-employment has cost the State €80 million a year since 2007.
This only took the construction sector into account, though the practice is also carried out in the transport and service industries.
They said that around 27,600 sole traders are operating in the construction sector alone, with no adequate controls to check that these arrangements were legitimate.
The Technical Engineering and Electrical Union (TEEU) have long fought against the practice, arguing that both employees and the State are losing out.
National Construction Official of the TEEU, Brian Nolan said:
“As a Union we believe that we have a duty to all our members and society as a whole to raise this as something where we’re striving to get people to work in good jobs that pay good money and then we have unscrupulous employers who are trying to engage in the biggest tax avoidance scheme that you can.”
“It’s a bit like an onion in the sense that there’s a lot of layers and when you peel them back you usually end up with tears in your eyes.”
Recently Labour TD and former Tanaiste, Joan Burton, called for a fast-track of the report and urged then then Social Protection Minister Leo Varadkar and then Finance Minister Michael Noonan to stop “letting this report gather dust on a shelf.”
“Please publish it now and help protect low paid workers,” she said.
The Construction Industry Federation was approached for comment on the subject of bogus self-employment on numerous occasions, but failed to respond. They represent employers in the construction industry.