An Coiste um Choimirce Shóisialach, Forbairt Pobail agus Tuaithe agus na hOileáin Tuarascáil – Scrúdú ar Fhéinfhostaíocht Bhréagach Meitheamh 2021 Joint Committee on Social Protection, Community and Rural Development, and the Islands Report – Examination of Bogus Self-Employment June 2021 33/SPCRDI/02/2021
TITHE AN OIREACHTAIS
AN COMHCHOISTE UM CHOIMIRCE SHÓISIALACH, FORBAIRT POBAIL TUAITHE AGUS NA HOILEÁIN
Tuarascáil
Scrúdú ar Fhéinfhostaíocht Bhréagach
Arna foilsiú Meitheamh 2021
______
HOUSES OF THE OIREACHTAS
JOINT COMMITTEE ON SOCIAL PROTECTION, COMMUNITY AND RURAL DEVELOPMENT AND THE ISLANDS
Report
Examination of Bogus Self-Employment
Published June 2021
33/SPCRDI/004
CONTENTS
Contents
CATHAOIRLEACH’S FOREWORD ...... 2 RECOMMENDATIONS OF THE COMMITTEE ...... 3 INTRODUCTION ...... 5 SCOPE SECTION DETERMINATIONS AND THE REMIT OF THE SCOPE SECTION ...... 7 CURRENT EMPLOYMENT LAW ...... 11 ANTI-VICTIMISATION AND CURRENT DETERRENTS ...... 12
Appendix 1 Committee Membership ...... 14 Appendix 2 Committee Orders of Reference ...... 16 Appendix 3 Witnesses ...... 28 Appendix 4 Links to Meeting Transcripts ...... 31 Appendix 5 Submissions received from Stakeholders on a Draft Report Circulated before Publication ...... 32
1
CATHAOIRLEACH’S FOREWORD
The Joint Committee on Social Protection, Community and Rural Development and the Islands have undertaken an examination of the issue of Bogus Self-Employment.
This was an issue that was also considered by the Joint Committee on Employment Affairs and Social Protection in the last Dáil/Seanad.
Bogus Self-Employment, as the Joint Committee understands it, refers to situations where a worker, who is acting as an employee, is misclassified as self-employed largely for PRSI purposes.
This can have long-term effects on those workers’ contributions records and ultimately their ability to access certain social protections. As such, the Joint Committee felt it was important to complete the work initiated by the previous Committee to ensure that this important issue was addressed.
I would like to thank all the witnesses and stakeholders who provided information to both the Joint Committee and the previous Committee, either through oral hearings or written submissions. I would also like to thank Deputy Joan Collins T.D. who acted as our rapporteur on this report for her hard work and dedication to the topic, and the staff in the Committee Secretariat for their assistance.
The Joint Committee has made 13 recommendations throughout the body of the report and is committed to ensuring these recommendations are implemented to create positive change for those effected by the practice of Bogus Self-Employment.
The Joint Committee will continue to engage with both the Minister, and the Department of Social Protection, throughout our Work Programme, and it is my intention that we will seek regular updates from the Department on the implementation of the recommendations set out in this report. The Joint Committee will also welcome and consider further submissions from interested parties following this publication.
Denis Naughten T.D.
Cathaoirleach Joint Committee on Social Protection, Community and Rural Development and the Islands 16 June 2021
2 RECOMMENDATIONS OF THE COMMITTEE
he ommittee has made the followin recommendations
1. he ommittee recommends that the Code of Practice for determining employment or self-employment status of individuals and the use of intermediary arran ements which includes ersonal ser ice com anies and mana ed ser ice com anies is u dated and laced on a statutory footin by the end of as stated by the e artment of ocial rotection
2. he ommittee recommends that the e artment of ocial rotection should run an ad ertisement cam ai n informin the ublic that they can a ly to ha e their em loyment status redetermined if they are aware that they were im acted by the use of ‘test cases’ previously;
3. he ommittee recommends that the e artment of ocial rotection in con unction with the rele ant stakeholders e amines whether the re istration of indi iduals as self em loyed in the first instance re uires reater documentary e idence to be ro ided by the main contractor or em loyer
4. he ommittee recommends that a dedicated and a ro riately resourced em loyment status unit is established in the ork lace elations ommission to e amine and ro ide determinations on em loyment status cases re ardless of whether they relate to social insurance em loyment ri hts or ta obli ations
5. he ommittee recommends that the rele ant e artments in con unction with the ffice of the e enue ommissioners de elo s a tar et of ins ections to be carried out annually to ensure consistent le els of ins ection and com liance ar ets should be de elo ed for each unit that carries out em loyment in esti ations
6. he ommittee recommends that the e artment of ocial rotection in con unction with the entral tatistics ffice de elo s a framework for collectin data on areas of em loyment where there is a otential or known risk of bo us self em loyment in the medium to lon term
7. he ommittee recommends that all a licants to the rele ant body for classification of em loyment status recei e a decision within si months
8. The Committee recommends that a standard definition of the word ‘employee’ and ‘worker’ is de elo ed and a lied to all ieces of em loyment le islation
3 9. The Committee recommends that in its work to update the Code of Practice for Determining Self-Employment Status it ensures that the ne t iteration of the Code of Practice acknowled es and can e applied to workers en a ed in platform workin and the i economy The Committee further recommends that the epartment should en a e with the relevant stakeholders in developin this update;
10. f the epartment finds that current employment law or the Code of Practice cannot address the specific employment circumstances of platform workers the Committee recommends that the epartment identify other measures throu h which employment le islation can e applied to platform workers;
11. The Committee recommends that the epartment of ocial rotection in con unction with the epartment of nterprise Trade and mployment develops anti victimisation and lacklistin le islation with the aim of pu lishin such le islation within si months of receipt of this report;
12. The Committee recommends that the period for employers to pay ackdated contri utions that they previously avoided is increased from si months to si years That would mean that the Workplace Relations Act 2015 e amended to allow ad udication officers and the a our Court consider reaches of employment enactments for up to years rather than the enerally months; and
13. The Committee recommends that the epartment of ocial rotection responds to the recommendations in this report in the first instance and keeps the Committee appraised of pro ress on an annual asis thereafter
4 INTRODUCTION
urin the course of the nd il and th eanad the then oint Committee on mployment ffairs and ocial rotection met seven times with a num er of stakeholders to e amine the issue of o us self employment ue to the level of work undertaken durin this time and the importance of the topic the oint Committee on ocial rotection Community and ural evelopment and the slands determined that it was important to complete that work usin the information provided to the former oint Committee on mployment ffairs and ocial rotection and additional information provided to the current Committee
o us self employment refers to situations where a worker who is actin as an employee is misclassified as self employed for purposes mployees are classified as Class workers for purposes This re uires their employer to pay a contri ution on their ehalf which then applies to their contri utions record elf employed people are classified as Class workers and do not receive employer contri utions to their record oth Class and Class workers’ pay a 4% PRSI contri ution from their income orkers who are misclassified as self employed rather than as employees can e perience difficulties accessin certain social protections due to the lack of contri utions paid on their ehalf y their employer The epartment of ocial rotection informed the Committee that self employed Class contri utors are not a le to receive the followin llness Benefit, Carer’s Benefit, Health and Safety Benefit and Occupational Injuries Benefits. Therefore as the Committee understands it workers who are misclassified as self employed are una le to o tain these enefits also ther conse uences workers e perience when they are misclassified as self employed is a lack of access to employment ri hts union participation and collective ar ainin These issues were consistently highlighted by the workers’ representative groups that provided information to the Committee
orkers can e misclassified as self employed for a num er of reasons owever as the Committee understands it o us self employment refers to when an employer deli erately misclassifies a worker as self employed to avoid their employer o li ations under oth the ta re ime and employment law The e tent of o us self employment in reland is lar ely unknown however it is estimated that approximately 12% of Ireland’s workforce are classified as self employed with no employees owever this is not an indication that these workers have een misclassified imilarly the cost of o us self employment throu h avoided employer contri utions is also unknown owever a su mission y the rish Con ress of Trade nions CT in estimated that it has cost the Exchequer approximately €600 million in recent years t is also acknowled ed that certain industries e perience hi her instances of self employment and therefore it is assumed potentially hi her instances of o us self employment
su mission on o us self employment march pdf ictu ie
5 Baring these issues in mind the Committee has focussed on three key areas regarding the process and legal position of bogus self employment. These are
1. Scope section determinations and the remit of the section, 2. The current legal position of employees in Irish employment law, and . nti ictimisation and Current eterrents.
The Committee examines these issues in more detail in the body of the report and has made 13 recommendations it believes can assist in reducing instances of bogus self employment going forward.
6 SCOPE SECTION DETERMINATIONS AND THE REMIT OF THE SCOPE SECTION
orkers who believe that they have been misclassified as self employed can seek a determination on their employment status from the Scope section in the epartment of Social Protection the epartment . The epartment informed the Committee that determinations are made based on the facts of the individual case with reference to social welfare legislation and the Code of Practice for determining employment or self-employment status of individuals (Code of Practice). In 201 the Scope section received 60 requests to determine a worker’s employment status. If a worker and or their employer disagrees with the determination reached by the Scope section the decision can be appealed through the Social elfare ppeals Office S O . In 201 the S O received 2 such appeals. If a worker or the employer is not satisfied with the outcome of the appeal, the decision of the S O can be appealed to the High Court.
In 201 the previous Committee was informed that the Code of Practice was due to reviewed and updated. The epartment also stated that the Code of Practice was due to be put on statutory footing. In 2021 the epartment provided the Committee with an update stating that it is continuing the update and revision of the Code of Practice and that it expects that it will be published and placed on statutory footing in late 2021. The Committee is of the opinion that the time to place the revised Code of Practice on a statutory footing by the end of 2021 must be achieved.
Recommendation: 1. The Committee recommends that the Code of Practice for determining employment or self-employment status of individuals and the use of intermediary arrangements, which includes personal service companies and managed service companies, is updated and placed on a statutory footing by the end of 2021 as stated by the epartment of Social Protection.
The Committee was made aware of concerns in relation to so called test cases potentially being used to determine an individual’s employment status by either the Scope section or the Social Welfare ppeals Office S O . hile the epartment of Social Protection and the S O stated that they do not use such test cases, the Committee is firmly of the opinion that all cases for determination must be treated solely on the merits of each individual case. The Committee also remains concerned that ‘test cases’ that may have been used previously are still affecting workers that were included in them. The Committee is of the opinion that the epartment should take action to resolve the issue of past legal decisions informing subsequent scope determinations and the impacts they continue to have.
7 he committee is of the vie that the various tests dia nostic tools that have emer ed from case la of the superior courts in con unction ith the updated code of practice and the actual circumstances of an individual should be central to decidin a person s employment status
Recommendation:
he ommittee recommends that the epartment of Social rotection runs an advertisement campai n informin the public that they can apply to have their employment status redetermined if they are a are that they ere impacted by the use of ‘test cases’ previously
he ommittee also heard from a number of sta eholders that there may be benefits to chan in the re istration of or ers as either employees or self employed contractors in the first instance urrently individuals ho are re istered as self employed by their employers are responsible for provin that they are in fact or in as employees he ommittee as informed by a number of itnesses that they ould be in favour of alternatin this practice to re uire the employer to provide proof that those they are en a in as sub contractors are not actin in an employee capacity While the ommittee ac no led es that this ould be beneficial to those ho are ron ly misclassified as self employed it is of the opinion that this type of chan e arrants further scrutiny
Recommendation:
he ommittee recommends that the epartment of Social rotection in con unction ith the relevant sta eholders e amines hether the re istration of individuals as self employed in the first instance re uires reater documentary evidence to be provided by the main contractor or employer
he ommittee as informed that the Wor place elations ommission may preliminarily determine employment status if a or er is see in a remedy under employment le islation he epartment also informed the ommittee that the W has responsibility for promotin and encoura in compliance ith employment le islation he ommittee heard the opinion from a number of or anisations that the W could be a better ay to determine hether a or er has been correctly classified as self employed as the WRC examines and determines issues surrounding workers’ rights. he W also has the po er to provide ad udication services for disputes in or place relations urin discussions the ommittee heard from employee representative roups that had ta en cases to the W on behalf of or ers ho ere misclassified as self employed hile or in for sub
8 contractors on tate pro ects. he Public Procurement Guidelines for Goods and Services state that Contracting uthorities have the discretion to exclude candidates from competing in pu lic procurement competitions if they can demonstrate violations of la our law o ligations. he Committee is of the opinion that WRC ad udications could e used to demonstrate violations of la our law and preclude such companies from the pu lic procurement process in the future.
he epartment also informed the Committee that the epartment of ocial rotection the ffice of the Revenue Commissioners Revenue and the epartment of nterprise rade and mployment WRC are already in the process of esta lishing an interdepartmental group to assess how employment status determination could e streamlined etween the three odies. he Committee acknowledges that any amalgamation of the individual functions currently carried out y each organisation needs to e carefully considered. owever the Committee is of the opinion that having a dedicated unit in the WRC to manage and oversee the classification of workers and employees would e the most optimal solution.
Recommendation: . he Committee recommends that a dedicated and appropriately resourced employment status unit is esta lished in the Workplace Relations Commission to examine and provide determinations on employment status cases regardless of whether they relate to social insurance employment rights or tax o ligations.
he Committee was also informed that the epartment undertakes oth random and targeted inspections. t also works with the oint nvestigations nit in Revenue to ensure that workers are correctly classified for R purposes. argeted inspections appear to achieve su stantial results. he Committee was informed that a inspection of the construction industry in resulted in 500 workers being reclassified as employees and €62 million being recovered for the Exchequer.
he Committee was also informed that in uarter four the epartment esta lished the mployment tatus nvestigations nit to focus on detecting and investigating false self employment. he epartment explained that the proactively targets oth employers and specific sectors to determine R compliance. reas of employment where the have carried out inspections include the construction industry meat processing retail fitness and the language training sector. he inister for ocial rotection stated in the il in response to a arliamentary uestion that since it egan its operations the ESIU has recovered approximately €2 in R savings. he epartment separately explained that the is ust one aspect of its R
ffice of overnment rocurement – u lic rocurement uidelines for oods and ervices ogp.gov.ie
9 compliance activities. he total amount recovered due to employer inspections more broadly in 20 was €5.3 million and in 2020 savings of over €1 million were made.
he ommittee is also of the opinion that due to the level of information available to evenue that they are best placed to lead investigations into industries and companies that are at high risk of engaging in bogus self employment and that this should be taken into consideration when targets are developed.
Recommendation:
5. he ommittee recommends that the relevant epartments in con unction with the ffice of the evenue ommissioners develops a target of inspections to be carried out annually to ensure consistent levels of inspection and compliance. argets should be developed for each unit that carries out employment investigations.
he ommittee is of the opinion that in recognition that the extent of bogus self employment in Ireland is largely unknown further work should be done by the epartment of Social rotection in collaboration with the entral Statistics ffice and other relevant bodies to establish more structured and consistent data collection on the levels trends and patterns related to bogus self employment and to properly identify the scale and scope of the kinds of work in Ireland that engages in bogus self employment. he ommittee is of the opinion that this work would further support more targeted inspections and facilitate a feedback loop of information between inspections and research and data collection.
Recommendation: 6. he ommittee recommends that the epartment of Social rotection in con unction with the entral Statistics ffice develops a framework for collecting data on areas of employment where there is a potential or known risk of bogus self employment in the medium to long term.
he ommittee was informed by some witnesses of Scope cases that can take up to four or five years to be resolved. he ommittee is of the opinion that such timeframes are unacceptable.
10 Recommendation: . e ommi ee re ommends a all a li a ions o e relevan od for lassifi a ion of em lo men s a s re eive a de ision wi in si mon s.
CURRENT EMPLOYMENT LAW
e ommi ee was informed a reland as a s s an ial amo n of em lo men legisla ion a is designed o ro e o wor ers and em lo ers. owever e ommi ee was informed a e words ‘employee’ and ‘worker’ are no onsis en l a lied ro g o em lo men law leading o differen in er re a ions of ese words in differen ie es of legisla ion. e ommi ee no es a reland is no ni e in aving no sing lar defini ion of ese words. owever w ile e ommi ee a nowledges a sing onsis en defini ions of e words ‘employee’ and ‘worker’ ro g o em lo men law wo ld no elimina e og s self em lo men i is of e o inion a i wo ld allow for onsis en a li a ions of ea ie e of em lo men legisla ion.
Recommendation:
. e ommi ee re ommends a s andard defini ions of e words ‘employee’ and ‘worker’ are develo ed and a lied o all ie es of em lo men legisla ion.
The Committee was also informed that current employment law is based on ‘employees’ and ‘employers’. The Committee is concerned that this fails to capture the position of platform workers or wor ers involved in e gig e onom w o of en do no ave a well defined em lo men s a s. s e ommi ee nders ands i and for e r ose of is re or la form wor ing refers o e ra i e w ere an individ al w o is ass med o e self em lo ed f lfils a on ra of servi e a e o ain ro g a digi al ird ar la form. e a sen e of a defined em lo men s a s for ese wor ers as im li a ions for so ial ins ran e overage as well as em lo men ro e ion and in ome se ri for e am le minim m wage si a redi a le o rs . e ommi ee wis es o e ress i s s an e a an one engaged in self em lo men ro g la form wor ing e gig e onom or in o er ir ms an es m s e en i led o minim m a men s ased on o e oin a o r and inim m age greemen s. iven e re ario s na re nder w i la form and gig e onom wor ers rren l wor e ommi ee is of e o inion a ese wor ers m s no e e l ded or lef o of em lo men rig s and legisla ion and a e law m s e ro s eno g o a re is gro of wor ers. e ommi ee is also of e o inion a e Code of Practice m s re ognise and e
11 applicable to these workers as well. The Committee acknowled es and welcomes the information pro ided by the epartment that the re iew of the Code of Practice was partly undertaken to ensure that issues surroundin platform workin and the i economy were addressed.
Recommendations:
. The Committee recommends that in its work to update the Code of Practice for Determining Self-Employment Status it ensures that the ne t iteration of the Code of Practice acknowled es and can be applied to workers en a ed in platform workin and the i economy. The Committee further recommends that the epartment should en a e with the rele ant stakeholders in de elopin this update
. f the epartment finds that current employment law or the Code of Practice cannot address the specific employment circumstances of platform workers the Committee recommends that the epartment identify other measures throu h which employment le islation can be applied to platform workers.
ANTI-VICTIMISATION AND CURRENT DETERRENTS
The Committee reco nises that the number of applications to the cope section for a determination of employment status remains low particularly when compared to the estimates of how many workers misclassification potentially effects. The Committee heard from arious employee representati es and roups that many workers fear en a in with the cope section for fear that they will be ‘blacklisted’ and denied work in their respective industries in the future. The Department informed the Committee in that anti ictimisation would form a key part of any future employment le islation and that it was workin with the ffice of the ttorney eneral to de elop this le islation. n pril the epartment informed the Committee that it is consultin with the epartment of nterprise Trade and mployment on the de elopment of anti ictimisation pro isions for workers who wish to uery their employment status and that the a ailability of an appropriate le islati e ehicle will be an important factor in the publication date of such le islation. owe er as this le islation was bein e plored as early as the Committee is of the opinion that it must remain a priority.
12 Recommendation: . The ommittee recommends that the Department of ocial rotection in con unction with the Department of nterprise Trade and mplo ment develops anti victimisation and blacklistin le islation with the aim of publishin such le islation within si months of receipt of this report.
The ommittee also remains concerned that current deterrents are not stron enou h to stop prevent emplo ers from intentionall misclassif in workers as self emplo ed. The ommittee acknowled es that if a worker is reclassified as an emplo ee that their emplo er is liable to pa the backdated contributions that they previously avoided. These are then added to the employee’s contribution record. The ommittee notes that under the Workplace Relations Act 20153 that employer’s found to have wron l classified someone as self emplo ed are liable to backdate the contributions the avoided for a period of si months. The ommittee is of the opinion that avoided contributions should be backdated b a period of si ears as this would act as a stron er deterrent.
Recommendation: . The ommittee recommends that the period for emplo ers to pa backdated contributions that the previousl avoided is increased from si months to si ears. That would mean that the Workplace Relations Act 2015 be amended to allow ad udication officers and the abour ourt consider breaches of emplo ment enactments for up to ears rather than the enerall months.
The ommittee is of the opinion that the above recommendations would act as deterrents to emplo ers misclassif in individuals as self emplo ed. owever the ommittee also acknowled es that these chan es would not necessaril make it easier for an individual to re uest an emplo ment status classification from the scope section especiall without personal support. The ommittee is of the opinion the opinion that that workers can best pro ress their ri ht under emplo ment and social welfare le islation b e ercisin their constitutional ri ht to become a member of a trade union.
orkplace elations ct
13 Appendix 1 Committee Membership
eputy ac ie ahill – ianna il eputy oe arey ine ael
eputy arc athasai h – reen arty eputy oan ollins ndependent han e
eputy amon u v – ianna il eputy aul onnelly – inn in
eputy harles lana an – ine ael eputy laire errane – inn in
14 – –
– –
– –
–
15 Appendix 2 Committee Orders of Reference
94.
—
(a)
(b)
(c)
(d) —
16 Scope and Context of Activities of Select Committees
70.
—
(a)
(b)
(c)
(d) —
17
95. —
(a) legislation, policy, governance, expenditure and administration of―
(b)
other matters which―
(a)
(b)
expenditure and administration under paragraph (1) shall be―
(a)
(b)
ccounts―
(a)
18 (b)
order of the Dáil: provided that the Joint Committee shall not consider―
(a)
(b)
(c)
Where a Select Committee proposes to consider―
(a)
(b)
(c)
(d)
19
—
(a)
(b)
Functions of Departmental Select Committees
71. —
(a)
(b)
–
20 (a)
(b)
—
(a)
(b)
(b)
(a)
(b)
(c)
21
–
(a)
(b)
(c)
(d)
—
22 (a)
(b)
96.
to time―
(a)
(b)
or both Houses of the Oireachtas, power to―
(a) concerned to―
23
(b)
e to discuss―
(a)
(b)
officeholders of a―
(a)
24 (b)
power to―
(a)
(b)
Powers of Select Committees
72.
–
(a)
(b)
–
25 (a) –
(b)
–
(a)
(b)
26 –
(a)
(b)
(a)
(b)
27 Appendix 3 Witnesses
8 NOVEMBER 2018
Department of Employment Affairs and Social Protection
– – – –
31 JANUARY 2019
Irish Congress of Trade Unions
SIPTU
Ms Karan O’Loughlin
National Union of Journalists
28 Fórsa
Mr. Brendan O’Hanlon an eneral e re ar
14 FEBRUARY 2019
National University of Ireland Maynooth
ro . M ael o er ro e or o a
28 MARCH 2019
Construction Industry Federation
M ean n er re or nd r al ela on and lo en er e Mr. Conor O’Connell e onal re or
Ibec
M Mae e M l ee re or – lo er ela on M ona M r Head o lo en a er e
20 JUNE 2019
Irish Airline Pilots Association
Mr. an C llen re den
29 UNITE
Mr. o a erald e onal O er Mr. o er ell e onal Or an er M Cole e od n Bran e re ar – n l lan a e Teachers’ Branch
24 OCTOBER 2019
Mr. Mar n M Ma on
5 DECEMBER 2019
Department of Employment Affairs and Social Protection
Mr. an an e re ar eneral M Clare o l n r n al O er
Social Welfare Appeals Office
M oan ordon C e eal O er Mr. Br an e C e eal O er
30 Appendix 4 Links to Meeting Transcripts
The n n s are he en a e en s he re s n ee n en a rs an c a r ec n he n he c B s e en
e er an ar e r ar arch ne c er an ece er
31 Appendix 5 Submissions received from Stakeholders on a Draft Report Circulated before Publication
MS JEAN WINTERS, DIRECTOR, CONSTRUCTION INDUSTRY FEDERATION
32 33 34 35 36 MS JOAN GORDON, CHIEF APPEALS OFFICER, SOCIAL WELFARE APPEALS OFFICE
37 38 MR. TIM DUGGAN, ASSISTANT SECRETARY GENERAL, DEPARTMENT OF SOCIAL PROTECTION
39 40 41 42 43 MR. MARTIN MCMAHON
44 MR. MARTIN MCMAHON
45 46 47 48 49 50 51 52 53 54 PROFESSOR MICHAEL DOHERTY, MAYNOOTH UNIVERSITY
55 PROFESSOR MICHAEL DOHERTY, MAYNOOTH UNIVERSITY
56 57 MS PATRICIA KING, GENERAL SECRETARY, IRISH CONGRESS OF TRADE UNIONS
58 59 UNITE THE UNION
r Unite response to draft report examining Bogus Self-Employment prepared by Joint Committee on Social Protection, Community and Rural Development and the Islands Unite welcomes the opportunity to respond to the Committee’s draft report examining bogus self e en s e n e n r s a e en he ee n s se e en s ar he ar er hen en n recar sness – a hen en n h ch ne a ncrease h he r h he s called ‘gig’ economy, or platform economy. Bogus self e en s n n a e ers r c n rac rs see n a s c a ns rance a en s a h h ha s a a r c n r n ac r s a s a se e ers a se e n he sa n n s n a r n a ar h ar s s e en an a er a s The rac ce a s n er nes c ec s – s nce he r er s n n er ar a r rce ns ea an a se n a r er a r n Unite’s experience some employers also use bogus self e en an her recar s r s e en as ar an a ress e n n a ance c B s se e en s r s h se ec n c sec rs here s rac se he e r en r ers c an e ers an he che er n a n he n n payment of employer’s PRSI – and the resultant loss of monies to the social insurance fund as well as the diminution of workers’ s c a ns rance en e en s – e ec e e erna ses a r n n n compliant employers’ s ness c s s h n a r ers an s c e as a h e With regard to the emergence of ‘platform’ or ‘gig’ working, the European Trade Union Confederation has h h h e he ne a er re a nsh s n recar s r n re a nsh s – an ne a ha es e e n he ne a c n a e en re a nsh s “The progression of platform work can be linked to the development of self emplo ment and non standard emplo ment relationships ropean initiative sho ld therefore foc s on the protection of all non standard workers and workers in platform companies incl ding the self emplo ed beca se a m sician a deliver man a o rnalist or a cleaner are in the same sit ation The are similar vis vis their order giver the absence of or incomplete social protection the diffic lties to organise themselves and bargain collectivel and the inabilit to enforce their right to a decent income hether one is an emplo ee an a tonomo s or a bog s self emplo ed worker one does not set the
60 r les of the game neither with a traditional emplo er nor with the market The are workers who have no real possibilit of claiming their rights otherwise they will not be called back the next day” s we emerge from the Co id pandemic, addressing bogus self employment and precarious employment, and ensuring that all workers ha e full access to employment rights and social insurance protections, is crucial to ensuring a sustainable reco ery.
1. The Committee recommends that the Code of Practice for Determining Self-Employment Status is updated and placed on a statutory footing, as stated by the Department of Social Protection, without delay.
Unite welcomes this draft recommendation. The process of putting the non statutory ’Code of Practice’ on a statutory footing must of necessity encompass the important legal principles set out in court udgments, many of which seem to be ignored in indi idual ppeals Panel decisions. Unite further argues that we be gi en an opportunity to input into the new Statutory Code of Practice. lso we note that the Code currently does not take account of new forms of bogus self employment such as platform work as indeed noted by the Committee when discussing Recommendations and . This needs to be addressed in the formulation of the Statutory Code of Practice which must be regularly re iewed and updated.
2. The Committee recommends that the Department of Social Protection considers extending the remit of the Scope section to determine whether the misclassification of a worker was intentional and that these findings be recorded and published annually.
3. The Committee recommends that, if the remit of the Scope section cannot be extended to adjudicate on such matters, the Department of Social Protection, in conjunction with the relevant bodies, considers removing PRSI classification determinations from the Scope section and transferring those functions to the Workplace Relations Commission.
4. The Committee recommends that the Department of Social Protection, in conjunction with the Office of the Revenue Commissioners, develops a target of inspections to be carried out annually to ensure consistent levels of inspection and compliance. Targets should be developed for each unit that carries out employment investigations.
Recommendations , and relate to the same issues which statutory authority or authorities should be gi en responsibility for ensuring that workers are not misclassified.
It should be noted at the outset that Unite is concerned that employers are able to use the defence of ‘unintentional’ misclassification.
European Trade Union Confederation. T esol tion on the protection of the rights of non standard workers and workers in platform companies incl ding the self emplo ed ccessed pril . https www.etuc.org en document etuc resolution protection rights non standard workers and workers platform companies
61 t resent t ree agencies are in ol ed in matters relating to ogus self em loyment e co e section of t e e artment of ocial Protection ic is seriously under resourced t e or lace elations Commission and t e ne m loyment tatus n estigation nit.
n t e ational m loyment ig ts ut ority as merged into t e or lace elations Commission established to streamline Ireland’s industrial relations system. When the WRC was esta lis ed t e t en m loyment inister ic ard ruton said it ould re lace a system ic e correctly descri ed as “c aracterise forum s o in o erla in claims ela s an a i e ree of formalit t at often or e a ainst earl an eas resolution of claims”
ot it standing t e esta lis ment of t e C o er fi e years later matters relating to ogus self em loyment are dealt it y different odies – co e t e C ic currently decides u on ot t e reliminary and su stanti e issues of employment and a worker’s status) and t e – and significant delays can arise in determining a case.
erefore nite ro oses t at t e in ouse in estigation on site ins ection and ad udication functions relating to em loyment status currently carried out y t ese t ree odies e merged into one ell resourced statutory unit under t e aus ices of t e C consistent it t e enactment of t e tatutory Code of Practice.
is ould mean t at or ers ould a e access to one oint of contact to assess et er or not t eir rig ts a e een reac ed and to ro ide remedies in real time.
nite argues t at t is ould not only e easier to access for or ers ut ould also result in cost sa ings due to streamlining and t e elimination of du lication. ese sa ings s ould e in ested in increased in estigation and ins ection resources.
n addition to t ese efficiency sa ings a ell resourced unit ould e in a osition to recou significant monies. n is re ort u lis ed in e tem er t e Controller and uditor eneral noted t at in t e oint n estigation nit for ic staff are dra n from t e e artment of ocial Protection’s Special Investigation Unit, Revenue’s own Joint Investigations Unit, and t e or lace elations Commission initiated a cam aign s ecifically focused on t e construction sector resulting in €60.2 million being recovered by the Revenue Commissioners and nearly 500 subcontractors reclassified as em loyees.
t is reasona le to assume t at t is re resented ust t e ti of a non com liance ice erg and t at a dedicated ell resourced unit as ro osed a o e ould e a le to recou significant more monies – ic in itself ould deter em loyers from engaging in a usi e ractices. Consideration s ould also
or lace elations Commission. ruton launc es ne era for em lo ment ri ts an in ustrial relations. cto er . ccessed ril tt s . or lacerelations.ie en ne s media or lace relations notices ruton launc es ne era for em loyment rig ts and industrial relati ons. tml Com troller and uditor eneral e ort on t e ccounts of t e u lic er ices . e tem er . ccessed ril . tt s .audit.go .ie en find re ort u lications re ort on t e accounts of t e u lic ser ices re ort on t e accounts of t e u lic ser ices . df
62 be given to levying employers found to be in breach with a set percentage of any award made to a worker by the WRC, with the monies thus raised to be ring fenced for the integrated unit.
Such a body should provide accessible information in a range of languages, bearing in mind that migrant workers are especially vulnerable to labour abuses.
5. The Committee recommends that the Department of Social Protection, in conjunction with the Central Statistics Office, develops a framework for collecting data and data publishing on areas of employment where there is a potential or known risk of bogus self-employment in the medium to long-term.
Unite welcomes this draft recommendation. Unions have significant on the ground knowledge of the areas where bogus self employment is a current, emerging or potential issue, and should therefore be afforded an opportunity to input into the data collection framework.
6. The Committee recommends that all applicants to the Scope section for classification of employment status receive a decision within six months.
See our response and recommendation at ) above.
7. The Committee recommends that a standard definition of the word ‘employee’ is developed and applied to all pieces of employment legislation.
Unite strongly welcomes this recommendation and further notes that there also needs to be a uniform definition of the term ‘worker’. These definitions should be set out in the Statutory Code of Practice. mployment status in Ireland currently flows from the legal difference between a contract of employment known as a contract of service ) and a contract for services. contract of employment applies to an employee employer relationship. contract for services applies in the case of an independent or self employed contractor.
In this regard, the ETUC has noted that “ e resum tion of an em lo ment relations i is closel lin e to t e efinition of or er ic is essential for t e a lication of national la our le islation an for t e national social artners to conclu e collecti e a reements on em lo ment an or in con itions ile ta in into account t e eneral rinci les of t e union le islation an case la esta lis e t e ourt of ustice of t e uro ean nion ase on t is assum tion a re ersal of ur en of roof is nee e riteria s oul e ase on ecisions or t e alifornia test or conventions”
Unite argued in our original submission, and reiterates now, to the Committee that an employment relationship should be presumed to e ist unless it can be proven otherwise hence, the burden of proof in the event of a disputed relationship must be on the employer, rather than on the worker.
uropean rade Union Confederation. esolution on t e rotection of t e ri ts of non stan ar or ers an or ers in latform com anies inclu in t e self em lo e ccessed pril 202 . https www.etuc.org en document etuc resolution protection rights non standard workers and workers platform companies
63 8. The Committee recommends that in its work to update the Code of Practice for Determining Self- Employment Status, it ensures that the next iteration of the Code acknowledges, and can be applied to, workers engaged in platform working and the gig economy;
9. If the Department finds that current Employment law or the Code of Practice cannot address the specific employment circumstances of platform workers, the Committee recommends that the Department identify other measures through which employment legislation can be applied to platform workers.
Unite belie es that the legal tests and rinci les needed to determine the difference between a ‘Contract of Service’ and a ‘Contract for Services’ are already set out in a variety of judgments of the higher courts. s set out at oint , what is re uired now is a Statutory Code of Practice encom assing these tests and rinci les with determinations henceforth being made by a ro erly resourced s ecific unit of the ork lace elations Commission C .
10. The Committee recommends that the Department of Social Protection continues to develop anti- victimisation legislation with the aim of publishing such legislation by September 2021.
Unite su orts this recommendation and notes that ictimisation can take the form of blacklisting by one em loyer or by a grou of em loyers acting collecti ely and e en across whole sectors. Unite regularly re resent workers sub ect to sector wide blacklisting.
In this regard we note anti blacklisting regulations were introduced in the U in and e tended to orthern Ireland in . Unite argues that s ecific anti blacklisting legislation as o osed to sim le anti ictimisation legislation should also be introduced in Ireland but that we should learn from the e erience in the U and orthern Ireland and ensure that such regulations
• rant an automatic right to com ensation for any worker who disco ers that they ha e been blacklisted and • Ensure that, where a blacklist is found to ha e o erated, workers ha e an automatic right to be informed of their inclusion on such a blacklist.
11. The Committee recommends that the Department of Social Protection examines whether there is potential to develop a penalty system for employers that intentionally misclassify workers as self- employed.
s noted abo e, Unite is concerned that em loyers should not be able to resort to a defence of ‘unintentional action’. We would also note that a penalty system would require primary or secondary legislation, which could ro e cumbersome.
Instead, Unite argues that one effecti e deterrent would be to change the current time limitation eriods for filing statutory em loyment claims, including claims in res ect of bogus self em loyment. enerally, the current time limit is si months which may be e tended by the C for another si months in certain circumstances – still significantly less than the arious time limits ro ided for in the Statute of imitations. The cognisable eriod i.e. the retros ecti e eriod to which a claim filed relates is also si months in most cases.
64 nite strongly argues that the limitation periods applica le to reaches of employment law should e no less than those applica le to other areas of contract law which can have retrospection of up to si years.
Such changes would have no adverse implications for good employers ut would act as a deterrent to poor employers and would help improve overall employment standards to the enefit not only of wor ers ut also of compliant employers.
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