David Cullinane (Sinn Fein) | Oireachtas source

I thank Mr. Houlihan for his presentation and overview on the directive. I am not sure if he has received the submission from the Irish Congress of Trade Unions, ICTU, but I met it regarding the issue. It has expressed some concerns in respect of this directive, some of which I share. The substance of ICTU's submission is that it could encourage bogus self-employment, informal insolvencies and tax avoidance. There is a distinction between being a sole trader and being a limited company. There are advantages to both but a sole trader is not a company. A sole trader does not pay corporate taxes. The person pays personal income taxes. If one sets up what is now a single-person limited liability company, one will have all the advantages of a corporation, which would include lower corporation taxes. There are also potential issues relating to insolvencies. We have seen workers left high and dry where a company essentially ceases trading but a liquidator or receiver is not appointed and the workers are unable to get any of their unpaid wages under the insolvency fund. This is a major issue and workers have been left high and dry. The case of the Paris Bakery is the most recent one but there have been many such cases.

If a person sets up a company at the moment, they must have two directors. Will this remain in place or will it be changed to one director? What will that mean? In respect of some of the key messages that I have been asked by ICTU to articulate to the Department, it is important that if ICTU makes submissions, we air them and get responses from the Department. ICTU is very much of the view that the directive should ensure the single-member limited liability company is not a vehicle for avoiding tax, for example, allowing companies to set up a number of subsidiaries and then register in a different country from the one in which they actually operate. This does happen, as we know, so there must be clear rules relating to the transfer of a registered office which must include the protection of worker involvement rights, require the registered office and headquarters to be in the same country and allow for a transfer only for genuine business reasons. I think that makes sense. It should also ensure the single-member limited liability company is not a vehicle for promoting self-employment over employment, which could create its own problems. ICTU is saying that single-member single-worker firms should be excluded and that regardless of what happens here, we must ensure workers' rights are protected. We have seen examples where companies are set up, their headquarters may be somewhere else and they are not bound by the same employment rights rules in this State. These are all legitimate concerns that have also been raised by the European Trade Union Confederation.

Perhaps the Mr. Houlihan might acknowledge whether he received a copy of the ICTU submission and, if so, whether he agrees with the any of the concerns it raised. If he does not agree with these concerns, can he set out the Government's position in regard to them?