Bogus self-employment could be 'solved overnight', PAC hears

Stop using test cases to determine a worker’s status, says activist Martin McMahon
Bogus self-employment could be 'solved overnight', PAC hears

The Public Accounts Committee, chaired by Brian Stanley, heard views on how to deal with bogus self-employment. Picture: Gareth Chaney/Collins

The issue of bogus self-employment for couriers and construction workers could be “solved overnight” if the State was to stop using test cases to determine a worker’s status, an Oireachtas committee has heard.

Speaking before the Public Accounts Committee (PAC), activist Martin McMahon said that those industries represent the “low hanging fruit” in terms of the issue.

All couriers in Ireland are deemed to be self-employed, while roughly 23% of construction workers are so deemed at present.

“Stop using test cases," said Mr McMahon. "For couriers and construction, it’s very simple. Do that one straight away, it could be done overnight."

The current iteration of PAC had previously set out its stall with regard to its intention to make bogus self-employment one of its chief topics of interrogation.

That saw an appearance by Revenue chair Niall Cody last November lead to the admission 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, the ‘test case’ to which Mr McMahon had made reference.

At his appearance this afternoon, he contended that the “biggest impediment” to reform in the area is not a lack of legislation but that “the department is ignoring case law”.

He gave the example of a 2006 High Court case which saw five ESB meter readers ruled to be direct employees. 

“To this day, Revenue and Social Protection are ignoring that precedent,” said Mr McMahon.

That is the problem, they’re simply ignoring the courts."

Mr McMahon repeated his prior assertion that bogus self-employment — which sees workers denied social insurance contributions and sick pay by their de facto employers — is “conservatively” costing the State €1bn per year in lost tax revenue.

He said that the current pensions crisis in Ireland, which has seen successive Governments attempt to raise the State pension age to 67 in increments, is a fallacy.

“There is no pensions crisis, there is a ‘failure to collect employers’ PRSI crisis’,” he said. 

“This has been going on for 40 years, and the way things are going it will go on for another 40.”

Asked how the situation could be amended, he said that he would “support legislation that stops workers from facing a system that is rigged against them”.

This was in reference to his assertion that all employment insurance cases referred by the Department of Social Protection to its own social welfare appeals office are automatically overturned by dint of the 1995 courier test case, leaving a High Court action as the affected person’s only means of appeal.

An initial appeal of those cases by the State should be sent to the courts, said Mr McMahon, “where it’s done in public view”, as opposed to the behind-closed-doors nature of the appeals office.

'No confidence'

Regarding a draft report of the Social Protection committee into the practice, he said that he had “no confidence, absolutely none” regarding the findings of same.

“I will not be allowing my name to be attached to that report. I am not satisfied with it at all, it is like I was never there,” he said, in reference to the record of his own appearance before that committee in 2019.

He agreed that a retrospective investigation into the history of bogus self-employment is “absolutely” merited.

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