Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

While I appreciate the importance of the issue which the Deputies raise, I am not in a position to accept the amendment. The question of employment for self-employment status arises in three different areas, that is, tax where it is determined by Revenue, social welfare where it is determined by the Department of Social Protection and employment rights where the Workplace Relations Commission makes the determination.

It must be borne in mind that a worker’s employment status is not a matter of choice; it depends on the terms and conditions of the job. While it is usually clear whether an individual is employed or self-employed, it is not always obvious. However, case law has established tests to determine whether contracts are contracts for service, that is, self-employed contractors or contracts of service, that is, an employee. These tests need to be applied on a case-by-case basis to the facts of each case. In July of this year, the three organisations I mentioned earlier, that is, Revenue, the Department of Social Protection and the Workplace Relations Commission, published a code of practice which now includes legal tests used to determine employment status. The code states:

While the terms of a contract might be quite clear in saying that a person is engaged as a self-employed contractor, courts and statutory bodies may still conclude that they are, in fact, an employee. Inspectors and adjudicators will consider any formal contracts, but they will also consider how the work is actually carried out and will assess the relationship between the worker providing the service and the business paying for that service. They will consider whether the worker, or indeed the employer, had no option but to sign up to the terms dictated by the other party. The true agreement will often only be understood by analysing in the round all the circumstances and facts of the case.

The code of practice highlights that there is no single, clear legal definition of "employment" or "self-employment" under EU or Irish law and also emphasises that "the reality behind the contract" is what determines employment status. It is my understanding that it is that idea of the reality behind the contract that Deputy Nash is referencing where he refers to "a look through". The code aims to be of benefit to employers, employees, independent contractors and legal, financial and HR professionals. It is also aimed at investigators, decision-makers and adjudicators in the Department of Social Protection, the Workplace Relations Commission, Revenue, their respective appeals bodies and the courts.

It is important to ensure that workers are correctly classified in a way that matches the reality of the relationship between the worker and the business. The choice of business model should not serve to exclude any worker from his or her proper entitlements. The misclassification of a worker as being self-employed when the terms and conditions mean that in reality he or she is an employee is a matter of concern. Misclassification reduces contributions to the Social Insurance Fund and excludes workers from their rights and protections.

I believe, therefore, that the newly developed code of practice achieves what this proposed amendment apparently seeks and I do not consider the amendment necessary for that reason. In addition, the code is described as a "living document", which will continue to be updated to reflect future, relevant changes in the labour market, relevant legislation and case law. This is a better way to ensure that the appropriate tests are applied rather than codifying them in legislation which will inevitably need updating over time and may be more unwieldy to change.