Oireachtas Joint and Select Committees

Tuesday, 30 March 2021

Public Accounts Committee

Bogus Self-Employment: Discussion

12:30 pm

Mr. Martin McMahon:

We know from the Irish Congress of Trade Unions, ICTU, that 100% of couriers are considered by the State to be self-employed. We also know from ICTU that in construction self-employment is running at 23%. Construction was at 19%. We know from the Irish Air Line Pilots' Association that self-employment is rife among some airlines and it is becoming rife among other airlines. That comes back to the point that it gives a competitive advantage to some companies over others not to have to pay PRSI, holiday pay, taxes or maternity pay. It is driving down standards. One cannot compete against these people, so therefore one must do as they do. It is driving down standards right across the industry. In a previous meeting of the Committee of Public Accounts when the Minister of State, Deputy Fleming, was the Chairperson, he asked the National Transport Authority, NTA, what percentage of its workers were classified as self-employed. It replied that 50% of its workers were classified as self-employed.

It is very important to understand that the State is the biggest creator of bogus self-employment status and the biggest abuser of existing case law. If one includes, for example, intermediary set-ups like personal service companies, as they are used in RTÉ, one is looking at many hundreds of thousands of workers. It is retrospective. It goes back 40 years. If it keeps going the way it is going, it will be going for another 40 years.

In terms of what kind of money is being lost, as ICTU told the social protection committee, in construction alone it is €240 million a year and that is a very conservative estimate of PRSI and taxes forgone to the State because of bogus self-employment. If we extrapolate that across all sectors and include intermediaries such as IT companies then one is easily talking €1 billion a year. That is a very conservative figure. Again, it comes back to cui bono, who is benefitting from this, because it is not the State and it is not the workers. Why can Revenue not quantify it or prove it does or does not exist? Why is Revenue not doing anything about it?

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