Mr. Martin McMahon:

It is my opinion that thousands of workers are and have been misclassified as selfemployed by the State. Employment status must always be decided on the applicable law and the individual circumstances of each case. Despite agreement from the Revenue Commissioners that each case must be taken on its own facts in accordance with case law, the Revenue Commissioners have openly admitted to the Committee of Public Accounts that this is not what happens in practice. This contradiction between what case law demands and the State's misclassification, which in my opinion is contrary to existing law, was perfectly highlighted by the Revenue Commissioners in its reply, which states: "Revenue’s position is that each case is individual and needs to be considered on its own merits." Yet, what Revenue has told the committee it has been doing for more than 30 years is that "In the interest of uniformity Revenue decided to treat those couriers as selfemployed."

In my opinion, the State is granting illegal state aid, in the form of a PRSI exemption, to selected employers based on a misinterpretation of the law. It is a tax break which puts compliant employers at a distinct economic disadvantage and denies employees all their rights as employees. The mechanisms used by the Department of Social Protection and Revenue are unlawful test cases. That a number of these group-class test cases exist was confirmed in writing by the social welfare appeals office on 9 January 2019 when it wrote: "On occasion over the years the approach of having 'test cases' has been taken or considered by the Social Welfare Appeals Office."

That test cases are unlawful was acknowledged by the Minister for Employment Affairs and Social Protection on 25 March 2019 in an article in The Irish Times, which stated:

The Minister is also looking at changing legislation to permit deciding officers to make determinations on the employment status of groups or classes of workers.

That test cases are unlawful was further confirmed in a letter dated 9 May 2019 from the Secretary General of the Department of Employment Affairs and Social Protection to the Committee of Public Accounts, which stated:

There is no legislative provision which provides for appeals officers to make decisions on the employment status of groups or classes of workers who are engaged or operate on the same terms and conditions.

In September 2000, the Chairman of the Committee of Public Accounts wrote to the Secretary General of the Department of Social, Community and Family Affairs and requested to know why all couriers were classified as selfemployed by default by the Department. In his reply, the Secretary General stated:

A number of representative 'test cases' were selected in 1993/94 for detailed investigation and formal insurability decision under social welfare legislation. This process resulted in a decision by an Appeals Officer of the Social Welfare Appeals Office on 12 June 1995 who decided that a courier was selfemployed. The Appeals Officer's decision established the criteria in relation to the employment status of couriers that has, since then, been generally accepted throughout the industry and also by the Office of the Revenue Commissioners for tax purposes

The Department, in accepting the unlawful precedential test cases, which are specifically precluded by case law but that were created by the social welfare appeals office, and in using those precedential test cases to classify thousands of workers as selfemployed by default, is the biggest creators of bogus selfemployed workers in the State. Both the current Minister for Social Protection and the former Minister for Employment Affairs and Social Protection have stated on record that the use of test cases was replaced by a code of practice that issued from an employment status group in 2000. Former Minister, now Senator Doherty, in a reply to a parliamentary question, stated:

The Chief Appeals Officer has advised me that the discussion in relation to the use of 'test cases' before the Joint Committee on Employment Affairs and Social Protection on 5th December 2019 related to a particular set of circumstances dating back to the early 1990s where a number of cases involving a number of employers in a particular sector were selected as so called 'Test Cases'. This approach was a precursor to the subsequent development on a tripartite basis of the Code of Practice for Determining Employment or SelfEmployment.

As proven in the reply from the Revenue Commissioners to the Committee of Public Accounts, the use of test cases never stopped. The true factual position is that the decision from the employment status group, ESG, as recorded by the Communications Workers' Union, which was present in the ESG, was that it was the view of IBEC, the Department of Finance and Revenue that the status quoshould prevail. The status quowas that where a worker had a disagreement over his or her employment status, he or she can take a case to the High Court. It does not matter what case a worker makes to the scope section, the defined policy of the State is to overturn any scope section decision that threatens test cases, regardless of evidence and case law, and to force the worker to go to the High Court to challenge his or her employment status. At the same time, wealthy industrialists can classify workers as selfemployed, en masse, in private hearings, in free secret courts such as the social welfare appeals office or over lunch in the Burlington Hotel, as happened with couriers. This is the code of practice that IBEC took back to its clients. This is the code of practice Revenue enforces on workers to this day. It is also the code of practice that the social welfare representative at the ESG took personally to the social welfare appeals office.

The status quois the use of test cases continues to this day. ICTU has calculated the loss of PRSI and taxes to the State from the construction industry alone at approximately €240 million per year. Extrapolating from this figure across all sectors results in an annual loss to the Exchequer in excess of €1 billion every year.