Thursday, 4 April 2019
Ceisteanna Eile - Other Questions
6. To ask the Minister for Employment Affairs and Social Protection her plans to deal with bogus self-employment practices; and when legislation will come before Dáil Éireann on the matter. [15656/19]
10. To ask the Minister for Employment Affairs and Social Protection if her plans to improve protections for persons trapped in bogus self-employment will include new legislation; and if she will make a statement on the matter. [15605/19]
14. To ask the Minister for Employment Affairs and Social Protection her plans to introduce legislation on bogus self-employed contracts; if so, the parameters of the planned Bill; and if she will make a statement on the matter. [15510/19]
39. To ask the Minister for Employment Affairs and Social Protection the proposals she recently brought to Cabinet regarding bogus self-employment; her plans to progress these measures; and if she will make a statement on the matter. [15639/19]
This is about the Minister's plans to deal with bogus self-employment. I ask her to lay out her plans today because a number of Bills are before the Dáil, including legislation from my group, and we want to know what her intentions are. This situation resembles the Bill on banded hours, when robust legislation was brought by the Opposition only for the Government to jump in and bring forward its own legislation. History is repeating itself but we believe the various legislation in the queue offers a more robust solution to the question of bogus self-employment.
I propose to take Questions Nos. 6, 10, 14, 26 and 39 together.
My job is to progress Government legislation and not to progress Opposition legislation. There is nothing stopping any Member of an Opposition party from progressing his or her own legislation and I certainly would not impede it.
Disguised employment, or bogus self-employment, occurs when businesses deliberately misclassify workers as self-employed when they work as de factoemployees of the business concerned. This is done largely to avoid payment of the employer portion of social insurance contributions. The extent of disguised employment, together with potential measures to address this issue, was considered by an interdepartmental group in 2017. Having consulted widely with stakeholders and considered the available evidence, the group concluded that the use of disguised employment arrangements was not very prevalent in Ireland. The work by the interdepartmental group is reassuring in that it indicates that the overwhelming majority of employers are decent employers who are compliant with employment and social welfare law. The report stated that there was not a gross use of false arrangements but I slightly differ with it on that point. I am of the view that we have always had an issue with bogus self-employment. It has not grown but it is still very evident.
Given the concerns expressed in this House and elsewhere regarding a perceived increase in the incidence of self-employment, and to ensure that people are aware of their rights and the protections available, my Department conducted a survey and an advertising campaign earlier this year on the issue of false self-employment. We did not get an enormous response, which has led people to have certain opinions on it, but we will repeat it because we need to make sure it is consistent and that the people who did not hear what we said last time will hear it next time and the time thereafter, so that they will know what their rights are.
Bogus self-employment is already an offence. Any deliberate falsification of the employment status of a worker in order to avoid payment of social insurance contributions is an offence under section 252 of the Social Welfare Consolidation Act and is subject to prosecution with penalties, including imprisonment and fines. Nobody has ever been imprisoned for this, though there have been fines and significant penalties. Establishing guilt can be problematic as employers can claim genuine error. Employees have to be able to help us to take cases but we are all aware that, in many cases, employees feel lucky to have their job and are very reluctant to pursue it and that the security is not there in the legislation to enable them to establish their rights.
There are already significant legislative powers to investigate and sanction employers and employees who falsely declare their social insurance status as self-employed rather than employed. However, there are gaps and that is why I am proposing a number of new measures with a view to augmenting and building upon existing protection measures and legislation. Based on experience from these inspections and recognising that there is a particular challenge when dealing with large companies, I have tasked the Department with establishing a dedicated team to deal with the work involved in such employer inspections. I expect that this team will be established and functioning within the coming months.
In addition to more rigorous policing of existing law, I intend to implement a number of new legislative measures to further strengthen the powers in our appeals and inspection sections. First, I will seek to put the code of practice for determining employment status on a statutory basis. This code is being reviewed and updated by an interdepartmental group from the Departments of Employment Affairs and Social Protection and Finance, the Revenue Commissioners and the Workplace Relations Commission, in light of recent cases and to ensure the code is current and robust in its measures.
Second, I intend to bring forward measures to address the victimisation, and potential victimisation, of workers who seek a determination of their employment status, including the hundreds and possibly thousands who are afraid to do so.
Third, I am exploring the possibility of providing for deciding officers in the scope section in my Department to make determinations on the employment status of groups or classes of workers who are engaged and operate on the same terms and conditions, without having to have a specific complaint or having to investigate each individual worker separately. This would go a long way to ensuring consistency of status decisions and their timely determination, particularly in some of our larger organisations where the vast majority of employees are self-employed.
Together, these measures are expected to strengthen the framework of protections for workers, while speeding up the dispute resolution process. While the drafting of this legislation is complex, I hope to be in a position to introduce these provisions to the Oireachtas in the spring social welfare Bill in the next number of weeks.
Listening to the Minister is somewhat similar to listening to the presentations by IBEC and the Construction Industry Federation, CIF, at the committee's meeting last week. It is a case of see no evil, hear no evil and speak no evil and "There is nothing going on here, move along". The Minister indicated there is no evidence that bogus self-employment is rampant. However, it is rampant in one industry that is growing and currently important, namely, that of construction. Finding evidence for it and addressing it has proven difficult. Thousands of workers have been exploited by developers and builders who make vast profits under these terms. The Minister may claim the figures show that the incidence of bogus self-employment is decreasing. On further inspection, however, one will see that the numbers of those who are self-employed but who do not employ others are rising at an acute angle. This means that individuals are being taken on as self-employed contractors. If they do not employ others, these individuals are not genuine contractors within the industry. That matter must be investigated thoroughly and more robust legislation needs to be put in place. The Minister is trying to jump ahead of other items of legislation which are more robust.
I welcome the announcement of legislation but it is beyond urgent. I do not accept IBEC's contention that the issue can be addressed by increasing the number of inspections or better enforcement alone. This is a significant problem. On Monday last, I attended a hearing of a case at the Workplace Relations Commission, WRC. While I will not mention the company's name, it is obvious that it will lose badly, which I think it realises. When it loses, it will appeal to the Labour Court, and when it loses that, the case will be heard by the High Court. The vulnerable, non-national worker who had the courage to take the case previously approached the Department of Employment Affairs and Social Protection and the Revenue Commissioners but was informed by the latter that there was nothing wrong with his status or social protection. Eventually, approximately 18 months later, by the time the court sides with him, he will probably be long outside the country.
The current structure is inadequate. There are problems with the WRC and I draw the Minister's attention to the article in Village magazine by George McLoughlin, who worked for the WRC previously and who made a protected disclosure about the problems there and the systemic favouritism towards employers, which is a problem. A stand-alone investigations unit is necessary, as is beefed-up legislation to allow the implications of one case to be expanded to other cases. Will the Minister clarify whether the legislation will be brought on board in a couple of months or weeks?
I attended the meeting last week with IBEC, whose attitude is quite astounding. It is the case that while we have not seen definite figures for people who came forward in the requested survey, we know that bogus self-employment occurs in various sectors, including those relating to journalists, English language teachers, pilots, construction and couriers. I received an email from a young woman who has been caught up in bogus contracts in the tourism industry as a tour director since 2005. She has had to take a case to the court and the scope section. It is on the record that on 7 March 2019, the Department of Employment Affairs and Social Protection decided, on foot of a scope section investigation, that an employee of CIE Tours was insurable under the Social Welfare Acts at PRSI class A. CIE Tours is going to appeal that decision.
Bogus self-employment is rampant and cuts across industries. There is an urgent need for legislation to address the matter. I welcome that the Minister is discussing legislation but four Bills have been published and we believe they could be used as comprehensive legislation to allow the Minister to bring forward robust legislation.
Two issues have been raised, the first of which is how significant a problem this is and whether the numbers are increasing, stable or decreasing. I could argue with the Minister's contention in respect of the numbers but Deputy Bríd Smith has done that. It is currently a significant problem and it is growing. If anything, the evolution of the gig economy will only facilitate the problem becoming greater unless we tackle it now.
The Minister also referred to legislation. She announced, as she also did in the Seanad, that she will introduce her own legislation. We have spent much time in the House being told by the Minister and other members of the Government that legislation is not necessary in the area and that the existing system would work. By offering to introduce legislation, however, she is acknowledging that the system currently in place is not sufficient. The question arises as to when there will be new legislation to tackle a problem which the Minister now acknowledges exists. A number of Bills have been prepared, one of which was sponsored by me while the others were sponsored by the Labour Party, Deputy Bríd Smith's party and so on. We can co-ordinate our approach and decide among ourselves to put forward one of the Bills with the appropriate amendments. It would be far better if the Government accepted that now rather than assembling another team to investigate the matter further, expressing the hope that at some time in the ill-defined future, it may be able to introduce its own legislation. If the Government is seriously committed to resolving the problem, it would be a better approach. As Deputy Clare Daly noted, and I agree, it is beyond time for a solution.
To hear the Minister put forward arguments from employers that there have been genuine errors in classifying people as self-employed reminds me of when IBEC appeared before the committee last week and stated that it does not believe legislation is necessary. That the Minister is considering bringing forward legislation must be welcomed, and it also shows that she and her Department acknowledge the massive scale of bogus self-employment that exists and is growing. Some of the evidence that was presented to us, such as by ICTU, shows that in the construction sector alone, there is an estimated loss of €240 million per year through employer PRSI and tax, but that does not even touch on the loss of employment rights.
I reiterate that bogus self-employment exists even in the House. The camera operators filming proceedings are engaged in a number of scope section discussions with the Department. Bogus self-employment, therefore, exists in the House among camera operators. It is a massive problem. A number of Bills have been published, one of which was brought forward by my party. I welcome that the Minister has brought forward legislation because it is evidence that something needs to be done about the matter. I encourage her to meet the Deputies present, consider all the Bills and bring forward the most robust legislation.
I raise the case of a person I have encountered who is trying to gain direct or indirect employment. It is an Irish person with an Irish birth certificate and Irish passport who has returned home from the United States, having lived there for 46 years, but who has have been denied a PPS number. The person cannot find any form of employment, therefore, and needs a PPS number to apply for a driving licence, housing, a passport-----
I wished to make the Minister aware of the matter. It is in the context of employment, for which the person may wish to apply. If I convey the details to the Minister, will she consider the case post haste?
I ask Deputy Niall Collins to supply the details of the case to me before he leaves the Chamber. Nobody should be denied a PPS number. I will address the matter today.
I am glad that we all can agree but I do not subscribe to the view of certain Deputies that I favour one set of organisations over another. I sit at monthly meetings with both our social partners who represent our union colleagues and our social partners who represent our business colleagues. On most occasions, they have diametrically opposed views, and my job is to sift through the views and decide where the reality lands. While one half of the social partners would tell me the problem is enormous and cite hundreds of millions of euro being lost, which Deputy Brady noted, the other half would tell me there is no problem and that we should carry on as we have always done.
Deputy O'Dea just made a statement that I have finally come around to the view that there is a problem here but for as long as I have sat in this chair - almost two years - I have always acknowledged that there is a problem. I have always prefaced my remarks by saying that I do not know the size of the problem-----
I have the floor. I have always said that I do not know the size of the problem but whether it is ten people or 10,000 people, the legislation must be robust enough to protect them. We have a requirement to put legislation on our Statute Book to protect even one person and that is why I am bringing forward Government legislation. That is my job. I am quite happy to look at legislation from the Opposition but it is not my job to progress legislation prepared by Solidarity, People Before Profit or by Fianna Fáil. If anybody wants to bring forward legislation and to sit around the table with the Department to discuss it and see how we can progress and solve this problem, I am very happy to do so. As I said in my statement last week, I have done a considerable amount of work on this, arising from the amendment that Deputy O'Dea tabled to the Social Welfare Bill last year which he subsequently withdrew, thankfully, and have now produced what I presented in the last week. I am going to keep moving forward. I am going to change the practices and increase the training within my own Department.
Potentially, I may consider a stand alone issue because I have the same reservations as Deputy Clare Daly. I do not have authority over the WRC and I cannot subscribe to her views on it. When people bring complaints to us, and they are not anything like the numbers reflected by Deputies in this House which genuinely worries me because it suggests a divergence from reality, they are entitled to due process. Both sides are entitled to make a claim as to whether an individual is self-employed or otherwise. The adjudication process is robust. People are entitled to a decision and are entitled to appeal that decision, whatever it may be. If neither side likes the decision that comes from my Department, they are entitled to bring a case to the Labour Court, the High Court or the Supreme Court. That is the law of this land.
On the gaps in the legislation that currently exist, the legislation that I will bring to the House in the next couple of weeks will make the inspections more robust and the decisions that are made more consistent across both geography and industry. It should not make any difference whether an individual works on a construction site or in a hairdresser's: the decision should be the same. The determining factor is whether the definition of employment or self-employment applies to an individual. It is as simple as that and we do not make that any more robust. We do, however, need to ensure that when we do catch people, they are fined and that the penalties are sufficient.