Regina Doherty: 'Those who lie about being self-employed are conning us all - we must act to stop it'
The issue of false self-employment is correctly getting a lot of attention right now. On the one hand, it is difficult to quantify the extent of the issue. For example, my department carried out a major media campaign on false self-employment in May 2018 aimed at ensuring that there is better awareness of the service it provides in determining employment status and to develop a better understanding of the scale of false self-employment.
A dedicated webpage attracted more than 10,500 visits during the campaign but, ultimately, the department received only some 50 calls and 30 emails, resulting in 15 individual investigations.
Yet, many voices - including trade unionists, academics, public representatives and media - are insistent that this is a pervasive, widespread and hidden issue. One trade union has asserted that the Exchequer is losing €300m in taxation each year.
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Whatever the scale of the challenge, there are two very good reasons for us to take this issue seriously. Firstly, workers who are coerced by unscrupulous employers to register as self-employed, when they are in reality employees, ultimately lose out on benefits and entitlements they would be due if they had paid the appropriate employee PRSI.
Secondly, those who willingly and falsely register as self-employed to evade paying the appropriate level of taxes, are increasing the burden on PAYE workers and that's simply not fair.
In the latter bracket, there may be many white-collar and well-paid individuals - this is not just an issue concerning construction workers.
I believe that absence of evidence is not necessarily evidence of absence and that we need to enhance our regulatory approach to this issue. We need to strengthen the rules, beef up our inspections and give workers greater protection to report bad practices.
That is why I recently sought and received Cabinet approval to act on the issue of false self-employment.
The current code of practice for determining whether someone is self-employed or not is being reviewed by an interdepartmental group comprising the WRC, Department of Finance, Revenue and my department. This is the first substantial revision of the code since 2007.
I am committed to putting this code on a statutory footing. Soon, therefore, we will have statutory guidance governing employment status which is both comprehensive and based on the most up-to-date case law and which can be both used by deciding officers in making decisions and relied on by the courts. I intend to introduce this measure in a social welfare bill in the coming months.
To protect vulnerable employees, I will also seek to amend the law to deal with alleged victimisation of workers who seek decisions on their employment status, possibly by giving the WRC additional powers. We will consult with the WRC and the Department of Business, Enterprise and Innovation with a view to introducing such provisions in the same social welfare bill.
We also need to recalibrate our current inspection regime. Now that unemployment has fallen significantly, we have an opportunity to focus inspection resources on employment issues. In this regard, my department has engaged in a programme of training for its inspectors with a view to more intensive employer inspections from here on.
Recognising that there is a particular challenge when dealing with large companies, I have tasked my department with establishing a dedicated team to deal with the work involved in such employer inspections and determinations, and I expect to have proposals for this team by the end of this month.
Finally, I have asked my department to examine the possibility of the relevant legislation to allow deciding officers to make determinations on the employment status of groups or classes of workers who are engaged and operate on the same terms and conditions.
Currently such group or class decisions can only be carried out with the agreement of both employer and workers, with each worker entitled to an individual decision and each decision separately appealable. I want us to be able to make more effective decisions and achieve changes where the evidence clearly exists to do so without reducing the rights of individual workers. Such an approach will require further legal consideration to determine the most appropriate approach, but I hope to move on it as soon as possible.
Recently, when I introduced a new act to deal with zero-hours working and precarious employment, I stressed the need for labour law to keep pace with the evolving modern workplace.
The borders of employed and self-employed have become blurred in some sectors in recent years due to the advent of the gig economy and new work practices. Therefore, we need to modernise our approach on this also.
I am determined to proceed as quickly as possible on all fronts to bring these new measures into effect. I am happy to work with all parties and stakeholders to tackle an issue which we all agree needs to be addressed.
Regina Doherty is the Employment Affairs and Social Protection Minister