Damien English (Meath West, Fine Gael) | Oireachtas source

I thank the Deputy for raising this issue. She will have to forgive me because I only had notice she was going to raise bogus self-employment in the construction sector so I have no data or information on local authorities contracts. That was not mentioned in any clarification to us. I am happy to engage with her on that but I will have to speak more generally because that was all that was flagged to us by the Deputy.

I will speak mainly on behalf of the Department of Social Protection, which has most of the enforcement in this area along with the Workplace Relations Commission, WRC. The WRC monitors this and construction sites are a key part of its work as well. I would gladly take any evidence or data the Deputy has, discuss it with her and feed it into officials in the various Departments. Of course, we would follow this up and stamp this out because anywhere public money is spent we have to make sure the legislation is followed and that employees are respected and their conditions of employment through the various agreements are protected and honoured.

False or bogus self-employment arises where an employer wilfully or wrongfully treats a worker as an independent contractor in order to avoid tax and social insurance contributions and denies the worker access to other rights which attach to employment. Quantitative data from the labour force survey and elsewhere indicate that the prevalence of false level employment is lower than is perhaps perceived anecdotally. The self-employed made up about 14.1% of total employment in 2020. This is consistent with the average levels of self-employment within the EU and does not, of itself, point to a major problem here.

However, we know there are issues and they are dealt with whenever we have any information to track that and there is ongoing testing as well. It is fair to say there are some employers out there who are exploiting workers, many in lower paid and sometimes precarious jobs, and no level of worker exploitation is acceptable in this country. I could not be any clearer on that note on behalf of the Government and myself.

That is why Ireland has robust enforcement bodies and mechanisms in place for the determination of the employment status of individuals or groups. Where an issue arises in relation to the employment status of an individual, depending on the particular circumstances involved, cases are forwarded to the Department of Social Protection, the Revenue Commissioners or the WRC. All three have a role in any local authority contracts and any site belonging to anybody, regardless of whether it is public or private money.

The scope and employment status investigation units of the Department of Social Protection regularly carry out investigations jointly with the labour inspectorate of the Workplace Relations Commission. The Revenue Commissioners also have a role in identifying such cases and they carry out stand-alone investigations and those in conjunction with the Workplace Relations Commission. They also act on evidence or information that is reported.

The Workplace Relations Commission completed 250 inspections in the construction sector in 2019 and 150 in 2020. Inspections carried out by WRC inspectors operate on a compliance model. This means that an inspector will work with an employer to ensure that the employer fulfils all their statutory obligations and that any outstanding wages or entitlements are given to workers.

Officials within the scope section of the Department of Social Protection determine employment status and the correct class of pay-related social insurance, PRSI. Where misclassification of workers as self-employed is detected, the correct status and class is determined, and social insurance arrears are collected as required under the law.

Under the Social Welfare Consolidation Act 2005, there are specific offences in relation to employment contributions. On conviction, fines or imprisonment can ultimately be imposed. Revenue also has a strong inspection focus on the construction sector. Importantly, the enforcement bodies work closely together carrying out on-site investigations and work to a national code agreed with the social partners. The code of practice for determining employment and self-employment status of individuals has just been updated by an interdepartmental working group consisting of the Department of Social Protection, the Revenue Commissioners and the WRC. It is currently with the social partners for final consideration before anticipated publication in the coming weeks. This revised code will outline the current legal tests used in the determination of employment status and, importantly, incorporates the up-to-date situation.

It is important that we do that, both for the protection of employees but also to make sure that there is fair pricing when it comes to tenders so that businesses that follow all their obligations do not lose out on contracts because somebody else does not. We are very strong on that point.

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