Paul Gavan (Sinn Fein) | Oireachtas source

I welcome the Minister of State to the House. I also welcome the Bill and I commend my colleagues in the Labour Party on addressing this issue. I spent years as a trade union official on construction sites and I witnessed first hand the growth of bogus self-employment and the horrendous impact it has on working people. Bogus self-employment is tax fraud. It is yet another loophole in our tax system, which employers can exploit to avoid paying their fair share of tax. Not only do employers evade tax through bogus self-employment, they also exploit their workers by not providing them with adequate employment protections. Workers do not get holiday pay, sick pay, insurance stamps or private pension entitlements, and their State pension is also affected. The issue has been going on for decades in plain sight and it is now escalating and spreading to different sectors of our economy. Why has the State permitted it to happen for so long? Why has the State been willing to forgo tens of millions of euro each year in uncollected PRSI and PAYE?

Bogus self-employment is corruption at its core. It is the exploitation of workers, their families and the taxpayer. A total of €80 million per year, according to ICTU and TASC calculations, is lost in taxation, which equates to €800 million over the past decade. When the disgraceful social welfare cheats campaign introduced by the then Minister for Social Protection, Deputy Varadkar, last year to win over his neoliberal base in Fine Gael is considered, we can see where the Government is willing to tackle corruption and where it is willing to turn a blind eye. Bogus self-employment is the fraud that cheats us all. It cheats the worker, the worker's family and the taxpayer. However, a call free phone line has not been opened for this type of fraud. Worse than turning a blind eye, the previous Government in 2012 made it easier for businesses to engage in bogus self-employment. In 2012, the State made the decision to make two changes: first, to move the RCT system online, and second, to give the employer the responsibility to decide how the worker was classified. This gave the employer the power, at the click of a mouse, purposefully to misclassify a worker, without the active consent of that worker, whereas prior to these changes he or she had proactively to complete paperwork for tax purposes. The State essentially made it easier for employers to rip off the taxpayer. It also left the worker in a difficult position. No active consent was necessary to be classified as self-employed but workers would now have to go out of their way to make an issue of being misclassified and most likely lose their jobs in the process.

The statistical evidence is that in the construction industry, for example, the proportion of those self-employed increased from 25% in 2006 to 38% in 2015 - a figure which peaked at 40% in 2013. Evidence from interviews carried out by TASC shows that the offer of employment is often conditional on accepting a status as self-employed. We therefore have to laugh when we hear someone like Mr. Tom Parlon, director general of the Construction Industry Federation, say that he thinks claims of bogus self-employment are exaggerated. His reasoning for so many workers in the construction industry being classified as self-employed is they are specialist workers. Is he really trying to say that 40% of construction workers are specialist entrepreneurial bricklayers? This nonsense is being spread while unions such as OPATSI, BATU and SIPTU, who represent these workers, are telling us that bogus self-employment destroys people's lives. A report by the CIF highlighted that between 2008 and 2014, more than 1,000 builders committed suicide. We can imagine being a builder when the crash in 2008 happened, having no pension or social welfare entitlements to fall back upon as his or her employer had not been paying his or her insurance stamps. We can only imagine the stress and pressure that would put on someone. This type of employment is spreading to new sectors of the economy such as the services sector, Deliveroo, Uber, English language teachers, IT services and third level education providers. Workers in all these sectors have to accept these conditions.

I welcome the content of this Bill, which has been well drafted. Section 3 takes a practical, holistic view of the relationship between the employer and the worker. This will give those asked to adjudicate on these matters the ability to do so in a real world scenario rather than simply on the wording of the contract. Section 6 gives the Revenue Commissioners the scope to investigate this issue. That is welcome because investigations have not worked as well as they should have to date. The legislation places the Social Insurance Fund under the remit of the Revenue for the purposes of tax. Currently, social fund fraud issues come under the remit of the Department of Employment Affairs and Social Protection and, frankly, this arrangement is just not working. Giving Revenue a role has the potential to be a game changer. The legislation could be tightened and nuanced in some ways, but it is well-thought-out and deserves the support of all parties. I appeal to the Minister and colleagues to work together on this. Let us support the Bill on Second Stage and tighten it up on Committee Stage. We must make sure it moves on to Committee Stage quickly. There is too much as stake for too many people and, indeed, for our economic well-being to leave the legislation to rest before taking Committee Stage. If we are serious about the issue and about caring for working people, then the Bill should be taken quickly with the support of all parties.