Michael Clifford: Keeping employment rights in the shadows

The particular problem of bogus self-employment is recognised in government, but there is little sign of urgency in addressing the issue, writes Michael Clifford

Bogus self-employment involves workers not receiving any holiday, sick pay, or pension benefits or the protections afforded by paying PRSI.

Welcome to the land of fake breath tests and bogus self-employment.

The former is a reflection on the culture within An Garda Síochána. The latter reflects a growing trend towards the casualisation of work, the transfer of wealth from labour to capital, and a considerable loss to the exchequer.

Bogus self-employment is a growing issue, but is particularly relevant in the construction sector. As with much else in that sector, the Government is slow to deal with the matter lest it discommode the builder lobby, which has a vital role to play in alleviating the housing crisis.

As a result, those who are victims of the culture are expected to carry on in quiet desperation. This involves not receiving any holiday, sick pay, or pension benefits or the protections afforded by paying PRSI. Crucially, when anybody classified as self-employed loses their job, they are not eligible for Jobseeker’s Allowance.

There are perfectly legitimate reasons for people such as tradespeople to be self-employed. They could have priced their own work, supplied their own tools to a job, decide to work other than set hours, and effectively be their own boss.

Those conditions do not pertain for the majority of building workers and the problems arise for those who want their employment properly classified, but are told that’s not an option.

Anecdotally, this practice is now widespread in the construction industry. Casualising work through bogus self-employment has become easier since January 2012 when registering with Revenue went online for self- employment in the system known as Relevant Contracts Tax (RCT).

Prior to that, an employee would have to effectively “opt-in” by signing a form. Now the employer does that online on his or her behalf.

One recent alleged example was raised in Dáil on July 5 by People Before Profit TD Richard Boyd Barrett. He put a question to the minister for finance in the context of lower-than- expected income tax returns despite more people being at work.

“I put it to the minister that the reason for this is because of the extent of precarious work, low-paid work and, something that has not been mentioned enough in this regard, bogus self-employment, particularly in the construction industry,” said Mr Boyd Barrett.

He went on to mention Dolphin House, a public housing complex on Dublin’s South Circular Rd, which is the subject of a major regeneration project. This is a state contract to upgrade homes for some of the most disadvantaged people in the inner city.

“I got another call in a series of phone calls I have had over recent years from building workers about the regeneration of Dolphin House and Fatima mansions,” he said.

“Purcell Construction is the main developer down there. Rapid Developments is the bricklaying subcontractor.”

Rapid Developments is a Northern Ireland-based subcontractor which supplies bricklayers and labourers to sites.

Mr Boyd Barrett pointed out that a number of workers on the site had said they had been there for seven or eight weeks and had not even received a payslip to show they were employed.

“When they telephoned Revenue to ask if they are in the system, Revenue states that it has not heard a thing about it,” said Mr Boyd Barrett. “This is still rampant in the construction sector. If it was done properly and if they were on PAYE, the State would be getting very significant extra income tax revenues.”

He also gave an example of one of those who were not officially told what system of taxation they were on by their employer.

“When he telephoned Revenue to ask if he was on the PAYE system, because his employer said he was taken on as a PAYE worker, he was told that he had probably been classified as self-employed. He is a labourer. How could he be self-employed? It is ridiculous.”

During that exchange, Finance Minister Paschal Donohoe sid he was sure that, upon Mr Boyd Barrett raising the points in the Dáil, these matters would gain further public attention.

“We have bodies whose job is to enforce employment standards in construction and elsewhere,” he said.

Finance Minister Paschal Donohoe

It may be coincidence, but the Irish Examiner has established that, on July 20, a special task force of Revenue, Department of Social Welfare and the Workplace Relations Commission showed up on the Dolphin House site. They made a number inquiries, including of workers as to proof of their taxation status.

Last Wednesday, Mr Boyd Barrett issued a follow-up release in which he claimed that a number of workers employed by Rapid Developments received their PAYE forms from Revenue which ordinarily should have been issued days after they commenced work, some four months earlier.

The Irish Examiner has seen copies of “tax credit certificates” that have been issued to workers on the site, which are to run “for the period 23 August to 31 December 2017 and each subsequent year on”.

A tax credit certificate is usually issued within days of commencing in the PAYE system. The workers in question have been on site since last May.

Francis Devlin, a director of Rapid Developments, told the Irish Examiner that all of the company’s employees have been on PAYE contracts since they began work in May.

He said they have all been issued with pay slips showing their deductions since they began work. He said there may have been a communication issue with the Revenue which resulted in delays somewhere.

Mr Devlin was unaware until yesterday that the issue had been raised in the Dáil.

He was aware that there had been a taskforce on site but he said that was “fairly routine”.

One can only assume that if the taskforce was on site as a result of being alerted by exchanges in the Dáil, the word would have been received by Rapid Developments.

As far as Mr Devlin is concerned, Rapid Developments has fulfilled all its obligations to employees and the Revenue.

There may have been a misunderstanding about conditions and events at Dolphin House.

It could be the case that Mr Boyd Barrett was not provided with accurate information.

But, irrespective of the controversy surrounding Dolphin House, bogus self-employment does appear to be a growing problem.

It is just one facet of the increasing casualisation of work, and this is reflected in the construction sector more than anywhere else.

People Before Profit TD Richard Boyd Barrett

Some recruitment companies, which sources labour for building sites on a casual basis, outline in a series of bullet points on their websites the advantages of the service it provides.

  • No PRSI to pay: 10.75% of total pay;
  • No holiday pay to pay: 8% of total pay;
  • No pension to pay: 3% to 10% of total pay;
  • No bank holidays to pay;
  • No sick leave to pay;
  • No redundancy payments to pay;
  • No administration cost of payroll/PAYE/PRSI;
  • No disputes with employees, i.e.
    unfair dismissal actions, etc;
  • Ability to both hire and off-hire staff at one hour’s notice throughout the country.

All of these are undoubtedly advantages for employers and all are quite obviously disadvantages for employees.

The notion of any kind of security in a job is killed stone dead.

Is this really a positive development in a society where disillusion with the status quo, particularly through the established body politic, is affecting greater numbers of people, particularly the young?

Meanwhile, the particular problem of bogus self-employment is recognised in government, but change is booked in on a slow train.

On July 13, in response to a Dáil question, Social Protection Minister Regina Doherty said that a working group was looking into the whole area of “disguised employment” as she termed it.

She said a report was being finalised, but as of yet there is no sign of it.



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