Oireachtas Joint and Select Committees

Thursday, 31 January 2019

Joint Oireachtas Committee on Social Protection

Bogus Self-Employment: Discussion

Photo of Alice-Mary HigginsAlice-Mary Higgins (Independent) | Oireachtas source

I thank the delegates for joining us and for their presentation and advocacy work on this issue which has been very important. In some cases, they are representing those who may not yet be or who may not be in a position to be members of unions, recognising that there is a cohort of workers who are affected. What has come across very strongly - I thank the delegates for making it so clear - is that it is not simply the case that the deterrents against employers using bogus self-employment are inadequate but that there is an incentive for them to do so. Will the delegates comment on the question of there being a perverse incentive? Are we in danger of creating the wrong incentive whereby there is a reward for employers? I think the delegates made that very clear.

In terms of a deterrent, the significant lack of prosecutions is very striking. I think about 21 cases have been taken in the past few years, none of which was taken in 2017, despite the fact that such a significant cohort in the main areas of work in the State are affected and that we are looking at a rate of almost one quarter of those involved in construction. Will Mr. Wall comment on the construction sector? It was interesting to hear actions taken by the Revenue Commissioners in 2017 discussed. A large number of subcontractors were reclassified as employees, yet we learn that there are now 6,000 more in that sector. Will Mr. Wall comment on this because it helps us to think about how we can really interrogate sectoral investigations? One of the things we discussed was individuals taking cases who might or might not receive satisfaction. A major concern was that individual cases were not extending into sectoral analyses and wide-scale change. If one employee of a company engaged in a particular type of work brings forward a case, it should trigger a wider review of that company and sector. Will the delegates talk about having that investigation and indicate whether it did or did not have a ripple effect?

The loss to the State is very striking. It is not simply about those who may end up being dependent on other forms of income - the loss to the active economy - but also pensions. Will the delegates comment on the long-term impact of bogus self-employment, particularly when we know that we are likely to move towards a requirement to have 30 pension contributions to qualify for a full pension? It is sometimes touted that the number of contributions will be 40, but I am hopeful we will be able to keep it at 30. I imagine that it is putting a pension out of reach of a significant cohort of persons.

On the suggestion made by the Minister about making principal contractors liable, while I can potentially see some positive aspects in that quality employment should be reflected in all contracting and tendering processes and that there should be an expectation of quality employment and progression in it, I have questions and concerns. Perhaps the delegates might comment specifically on public procurement and how we should ensure it does not contribute to bogus self-employment. I would really appreciate it if they could identify two or three areas of public procurement where the issue could be tackled because there is significant scope to tackle it. There is potential in providing quality public employment, but in the context of the specific proposal, I am concerned about liability. Under the proposal, is there a danger that an individual renovating his or her home would become the person liable for PRSI such that employers would almost get off the hook again and individuals would be held liable? It is very difficult for an employee or somebody named as a sole contractor who is, in fact, an employee to take action against individual small contractors rather than those for whom he or she is effectively working. I have concerns about that proposal and I am worried that it would distance us.

My last two questions concern the Workplace Relations Commission and the Labour Court. The idea of bringing them into the process is very positive. We have seen that decisions made by the scope section are appealed to the Department. We have heard about cases in which people are having difficulty because they are almost involved in two processes at the same time in trying to navigate the Labour Court and the process of registration at the same time. Will the delegates comment on this?

My last question is for Mr. Dooley who I know has worked extensively with many people involved in the arts. I spoke last week about precarious employment in the arts, where the problem is endemic. Have the Competition (Amendment) Act which was brought forward by my colleagues on the committee and collective bargaining possibilities assisted in tackling that issue in that sector?

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