Time to act on employment loopholes

Employers’ representative body Ibec has warned tough employment regulations could hinder the growth of ‘new economy’ jobs by increasing red tape, writes Kyran Fitzgerald

Former employment minister and union official, Senator Ged Nash said the number of vulnerable workers has not fallen despite a labour market recovery marked by a strong increase in the number of available full-time posts.

Ibec’s top employment lawyer, Rhona Murphy, has been warning of “a squeeze on employer flexibility”, one that is being applied in Leinster House, and from Brussels.

She is concerned at the way private members’ bills have been gaining traction during the current Dáil, arguing that many of these proposals are totally unrealistic. Of particular interest to her is the Competition (Amendment) Act, 2017 which seeks to crack down on the phenomenon of bogus self-employment, creating two new categories: the ‘false’ self employed worker, and the ‘fully dependent’ self-employed worker.

Also in this space is the Protection of Employment (Measures to counter False Self Employment ) Bill 2018.

Who comes up with such clunky titles for new laws?, you may well ask.

In Ibec’s view, the act is part of “a broader narrative generally hostile to independent contractor arrangements”.

The employers’ representative points also to proposed legislation dealing with the use of zero hours and low hours contracts contained in the Employment (Miscellaneous Provisions) Bill 2017.

It lists a total of 14 pieces of legislation, recently enacted or still in Bill form in the employment space.

A number appear esoteric such as the Arts (Dignity at Work) (Amendment) Bill 2018.

Ms Murphy fears that the regulators are adopting an oversimplified, blunt approach and that common law tests which have “stood the test of time” face being eroded. In some instances, those running businesses adjudged to have wrongly treated employees as self employed could even be faced with criminal sanctions.

She takes issue with the proposed EU directive on transparent and predictable working conditions which introduces a European-wide definition of ‘worker’. Ms Murphy argues that the directive, if implemented in its current form by member states, could have a much wider impact on commercial arrangements between individuals than anticipated.

A lawyer who works for more than eight hours in a week for a client could, she argues, become an ‘employee’ of that client, with certain rights, under the Directive.

Ms Murphy’s broader point is that many independent contractors wish to operate that arrangement for personal, financial and career reasons. The economy and society is evolving in the direction of portfolio working. The legislators run the risk of jeopardising such arrangements.

Former employment minister and union official, Senator Ged Nash has a rather different perspective.

Four years ago, while in office, he commissioned a University of Limerick study into the prevalence of so called ‘zero hour’ and other low hour contracts. It found that zero-hour contracts — prevalent in the UK — are not common here, but that a variant, ‘if and when’ contracts are.

In the case of zero-hour contracts, there are no guarantees of work, but employees are contractually obliged to be available when required by the employer. In the case of ‘if and when’ contracts, the employee enjoys no guarantees, but is not under any legal obligation in the relationship.

The Organisation of Working Time Act provides an entitlement to payment for workers effectively ‘on call’. This explains why zero-hour contracts are less prevalent here. The UL study identified as high level of atypical and part time working in Ireland.

Between 1998 and 2014, the percentage of part-time workers rose from 17.7% to more than 24%, while the percentage working on Sundays jumped from 10% to over 17%. Many are migrants, some not well organised and with little

clout or

awareness of their rights.

Mr Nash believes that the proportion of such vulnerable workers has not fallen despite a labour market recovery marked by a strong increase in the number of available full-time posts.

In a buoyant labour market, dark shadows still loom.

Examples include couriers, food delivery workers as well as the acting, media and construction sectors.

The problem of ‘bogus self employed’ — where people, effectively on the payroll and operating to instruction, are, in effect, forced to operate as independent contractors — has grown as employers have tried to rein in their costs. The legislators have begun to respond while some organisations such as RTÉ and other media entities have been called to account.

RTÉ, for example, is reviewing the status of 472 people employed under contracts for service.

A key piece of law is now in the stocks. It aims to better protect those such as freelance journalists and voice actors who have been hindered by dubious competition rules from organising together to improve pay and conditions. Such a bill was introduced around a decade ago by President Higgins when he was still a TD.

Recently, Senator Ivana Bacik introduced a bill on bogus self employment which is now at a well advanced stage. The bill could alter employment relations across a wide range of sectors including aviation, IT, agriculture, logistics, and transport.

The Department of Social Protection is on the case, increasingly concerned at the revenue implications of bogus self employment with responsibility for the support of low-paid workers being passed onto the taxpayer and with tax revenues being lost. Ibec warns against measures that could hinder the growth of new economy jobs while increasing red tape.

The unions are concerned at what they view as the ‘softly softly’ approach to employers riding roughshod over employee rights.

The Department of Social Protection is focusing on information campaigns.

Mr Nash argues that this, while welcome, is not enough. The low hours lack of notice culture has become embedded leaving many, particularly younger women with care responsibilities in a very difficult situation. He views the spread of ‘if and when’ contracts and of hybrid alternatives, where workers receive minimal guarantees of hours, as insidious and he is seeking a tightening in a Government Bill already in train.

The gap between Ibec and the unions may be less wide than appears at first sight. Ms Murphy concedes that there are rogue employers out there and that by allowing such activities, decent employers are penalised.

Mr Nash accepts that restrictions should not be placed on the new economy.

Arguably, the authorities should target the miscreants while laying off on plans for yet more form filling and checks while accepting that many independent contractors, including carers as well as IT experts and professionals, are keen on flexibility.

The department should work more closely with training providers and legitimate employers as well as union officials and NGOs on the ground to boost the skill levels of vulnerable part timers, many of whom lack basic skills, particularly in English. This could provide a ‘win’ for both sides as the quality and productivity of the labour force is boosted.

The authorities should then train their weapons on the minority of employers who act abusively while promoting what amounts to tax evasion and a defrauding of the welfare system. Tracking such people down requires energy and persistence, along with a correct deployment of resources.


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