Eamon Gilmore (Dún Laoghaire, Labour)
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Question 162: To ask the Minister for Enterprise, Trade and Employment if his attention has been drawn to the practice of false contracting being used across a wide range of industries in order that employers can avoid many of their duties towards employees; if he will engage in a public information campaign to highlight the legal situation surrounding false contracting and the methods available for reporting same; the number of false contracting cases identified in 2006; and if he will make a statement on the matter. [8359/07]

Tony Killeen (Clare, Fianna Fail)
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Irish employment rights law makes a distinction between a contract of service, which applies to an employer-employee relationship, and a contract for service, which applies in the case of an independent sub-contractor. In effect, employment rights legislation does not apply to independent sub-contractors with the exception of the Safety, Health and Welfare at Work Act, 1989 and the Equality Act, 1998.

In most cases it will be clear whether an individual is employed or self-employed. Where there is doubt in relation to the employment status of an individual the relevant Departments and Agencies will have regard to the Code of Practice for Determining Employment or Self-Employment Status of Individuals. This Code was drawn up and agreed in 2001 by the Revenue Commissioners, Department of Social and Family Affairs, Department of Enterprise, Trade and Employment, the Irish Congress of Trade Unions and the Irish Business and Employers Federation.

A number of criteria are set out in that Code for determining whether an individual is an employee or self-employed. These include whether the person is under the control or direction of another person, owns his/her own business, supplies labour only, receives a fixed wage, is exposed to financial risk, assumes responsibility for investment and management, supplies materials for the job, can sub-contract the work, works set hours or a given number of hours per week/month, etc.

A major package of measures has been agreed by the parties to Towards 2016, the new Social Partnership Agreement, to provide for enhanced public confidence in the system of compliance. New legislation will be published this year to provide for enhanced employment rights measures including the establishment of the National Employment Rights Authority. Providing for greater clarity in the application of employment rights legislation to employees will be considered in the context of drawing up that legislation.

Legislation, which will empower the Labour Inspectorate to join with the Department of Social and Family Affairs and the Revenue Commissioners to work together in Joint Investigation Units, has been recently published. Such units will have a particular focus on the employment status of workers. The National Employment Rights Authority, which has already been established on an interim basis, is currently meeting with the Department of Social and Family Affairs and the Revenue Commissioners with a view to the early establishment and operation of Joint Investigation Units, once the legislation has been enacted.

The package of measures provided for under Towards 2016 will be supported by enhanced employment rights promotional and educational efforts. The Social partners and other organisations such as the Department of Social and Family Affairs and the Revenue Commissioners will be invited to bring their knowledge and networks to bear on the design and delivery of this education and awareness programme which, it is anticipated, will also address the issues associated with bogus self-employment.

The Department of Social and Family Affairs and the Revenue Commissioners will have details of the number of bogus self-contractors identified in 2006 in the context of their specific responsibilities. The Labour Inspectorate encountered a claim in 2006 by an employer that workers were engaged on a sub-contract basis and was not, therefore, subject to employment rights legislation. In this case the Scope Section of the Department of Social and Family Affairs, following consideration of all the relevant facts, decided that the workers involved were employees. This decision facilitated an Employment Appeals Tribunal award in favour of a number of former workers in that enterprise.