Catherine Byrne (Dublin South Central, Fine Gael) | Oireachtas source

I am taking this matter on behalf of the Minister for Employment Affairs and Social Protection.

False self-employment is consistently brought up by Deputies as a prevalent issue. If any Deputy is aware of any particular cases, the Minister strongly urges them to bring these to attention of the Department of Employment Affairs and Social Protection to ensure they can be investigated.

The Department’s scope section makes in excess of 1,000 employment status determinations each year covering a range of issues including directors of companies, family employments, partnerships and public sector employments. The number of cases involving a direct conflict of employment or self-employment status is relatively small. In 2017, the scope section made 138 decisions resulting in a class A employment decision. Of these, 35 could be described as disputed employment/self-employment cases. In the current year, the section has made 113 decisions resulting in a class A employment decision of which 27 could be described as disputed employment/self-employment cases.

Following a scope section decision, the employer will be liable for class A PRSI for the full period of employment. This can be a significant penalty for a business. Most employers co-operate fully with the Department’s inspectors in insuring compliance following a scope decision. Where they fail to comply, additional measures, including prosecution, can be brought to bear. Cases referred to the Department’s central prosecution service, CPS, for consideration of prosecution are examined using the principles established by the Director of Public Prosecutions, DPP.

Employer-specific social welfare offences have been considered by the courts as being of a technical nature in that they relate to a failure to keep and maintain prescribed records and remit PRSI. If, during the proceedings, the employer remits the PRSI or provides the records that were requested, the case is commonly withdrawn or struck out. The Department will generally only pursue a case where the employer refuses to comply.

The Department carried out a media campaign on false self-employment in May 2018 to ensure better public awareness of the important service the Department provides in determining employment status, as well as to help develop a better understanding of the scale and nature of false self-employment. The scope section received 50 calls and 30 emails during the campaign from individuals who had become aware of the service directly as a result of the advertisement campaign. Up to 15 scope section investigations were created as a direct result of the media campaign.

Given the relatively low number of formal requests for determinations, there may be some reluctance by individuals to seek a scope section determination due to concerns over how an employer will react. This suggests that the most appropriate way to address the issue will be through inspection. Anti-victimisation measures may be required to provide assurance to workers that they cannot be victimised if they raise legitimate concerns regarding their employment status.

Although the response was low, the response to the campaign will inform the inspection work of the Department, Revenue and the WRC, including in sectors other than construction. The Department has intensified its employer inspection activity since the campaign. A separate series of investigations took place in the west focused on the construction sector. Two further projects with a particular emphasis on identifying false self-employment are planned for the Dublin north and mid-west divisions.

It is difficult to identify hard data on false self-employment without individuals coming forward for investigation and decision. While there are some cases of false self-employment in particular sectors, this has not translated into any increase in overall levels of self-employment as might be expected if there was a growing problem. The self-employed continue to make up just over 15% of total employment. This is in line with the average rate of self-employment in the EU and has not increased in the past 16 years.

See this speech in context