'Contracts abuse' hits workers' pay rights
Unskilled builders' labourers are being obliged to register as "contractors" in a growing practice which is depriving them of their rights, it has been claimed.
Fianna Fáil welfare spokesman, Willie O'Dea, said the questionable practice was now spreading to other activities like catering and cleaning. He said the Revenue Commissioners were not moving to tackle the problem which was also depriving the Exchequer of tax and PRSI.
The Finance Minister Michael Noonan has denied that the practice is being abused to deprive workers of their rights. He also said that Revenue will not tolerate any abuses of the tax system.
But Mr O'Dea insisted that the so-called Relevant Contracts Tax (RCT) is being used to deny workers the basic rights enjoyed by workers. These rights come from things like registered employment agreement rates of pay, sick pay and holiday pay.
He said this also results in a significant loss of tax revenue - USC, PAYE and PRSI - compared to a situation where an individual is directly employed.
"This situation is also making a mockery of the Low Wage Commission. Revenue are obviously over-stretched and the best solution is to set up a special unit between Revenue and the Department of Social Protection to deal with this massive problem," Mr O'Dea told the Irish Independent.
The issue has recently been pursued during Dáil debates by Peadar Toibín of Sinn Féin and Ruth Coppinger of the Anti-Austerity Alliance. The issue has also been taken up by the building trade unions which have begun lobbying all political parties.
Mr Noonan said it was wrong to attempt to link the RCT system of tax deduction with any denial of workers' rights to pay, holidays or other items.