Plans to prevent companies from using bogus self-employment contracts to abuse workers’ rights for extra profit are being finalised by the Labour Party.
The proposed changes come amid concern that contract workers are being denied sick pay and are not paying the correct tax as they are declared self-employed by the employer.
In an interview with the Irish Examiner, employment minister Ged Nash pledged that Labour would move to overhaul the law — if returned after the general election.
“We have seen the phenomenon of bogus self-employment creep into our economy in the last few years. It’s a very worrying development and something that has concerned me for some time.”
The Department of Jobs estimates there are significant numbers of bogus selfemployed workers in the construction, IT, media and consultancy sectors.
These workers are sometimes declared as ‘dependent entrepreneurs’ or independent contractors, in a move to disguise the employee-employer relationship.
Mr Nash said the issue of bogus self-employment was a particular problem in the construction sector, which employs 120,000 people.
“We have cases right across the country with individual tradespeople, who have relationships with individual contractors who are subcontracting work. I’ve seen situations evolve over the last few years in particular where somebody enters what might be termed a bogus self-employment relationship, which is very damaging.
“It means that those people have no employment protections, have no right to redundancy payment and PRSI contributions are not being made by the employer. This is used to disguise the employee-employer relationship.
“I think it is the case that the law hasn’t caught up with the practice in a range of different sectors in this country. We don’t want this practice to become the norm,” he said.
“What we want to do is review this space and reform it. And we want to make sure that the law catches up with this emerging practice and that we reflect in our law the actuality of the employee and employer relationship. That may in time necessitate a review of the definition of the employee in Irish law.”
The Labour minister added: “As a dependent entrepreneur working for an organisation in that situation, you don’t have any rights, you are not entitled to sick pay, pension schemes and all of the other things that somebody would expect if they were in a standard employee-employer relationship. It is a grey area and the lines are blurred.”
Both the Revenue and Department of Social Protection are investigating cases where self-employed workers do not pay PRSI contributions. Investigations have resulted in site inspections in the construction sector.
The Labour Party’s charter to address workplace concerns, including bogus self employment, will be outlined today when it launches its document ‘Standing Up for Working People’.
The document will also address gaps in legislation around how workplace bullying is tackled.
Currently, there is no statutory redress for bullying. Victims who wish to pursue cases have to do so through the courts, which can be expensive and out of the reach of many.
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