Thousands of workers 'deliberately misclassified' as self-employed 

Sinn Féin TD and chair of the Public Accounts Committee Brian Stanley. The committee will be told that thousands of workers are being 'deliberately misclassified' by the State as self-employed.

Thousands of workers are being “deliberately misclassified” by the State as self-employed, an Oireachtas committee will hear on Tuesday.

That misclassification is expected to be branded as amounting to “illegal State aid” by the sole witness at the hearing of the Public Accounts Committee (PAC).

Martin McMahon, a Meath-based activist who has been campaigning on the subject of bogus self-employment for more than 20 years, will tell the committee the “illegal” aid, in the form of a PRSI exemption to “selected employers” puts “compliant employers at a distinct economic disadvantage”.

Bogus self-employment

Bogus self-employment, which sees people who are to all intents and purposes fully employed by a private entity denied the statutory social insurance contributions that PAYE workers receive, is an issue that affects many industries, including construction, IT, and transport workers, such as couriers.

The issue is an international one, which recently saw ride-sharing behemoth Uber admonished by the UK Supreme Court, which ruled that all of the company’s drivers are entitled to full workers’ rights.

Mr McMahon will cite the issue of "test cases" being used in an unlawful manner by the State in order to misclassify workers as self-employed.

Couriers

The Revenue Commissioners recently acknowledged, in correspondence with the committee, that all couriers are deemed to be self-employed by dint of a single precedent first used by the Department of Social Protection in 1995.

In his submission to the committee, which followed his appearance before same last November, Revenue chairman Niall Cody said “there is no one specific ‘test’ case’ used to determine whether or not a person can be deemed to be self-employed".

“However, couriers were regarded as self-employed for PRSI purposes as a result of a Social Welfare appeals officer’s decision,” Mr Cody said.

In the interest of uniformity, Revenue decided, without prejudice, to treat those couriers as self-employed for tax purposes.”

Mr McMahon will tell the PAC that, despite the assurance of former social protection minister Regina Doherty that those test cases applied only to “a particular set of circumstances” dating from the early 1990s, nevertheless “the use of test cases never stopped”.

He will estimate that bogus self-employment costs the State anywhere between €240m and €1bn a year in lost PRSI contributions.