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Dáil Éireann debate -
Wednesday, 4 Feb 1998

Vol. 486 No. 4

Written Answers. - Construction Workers.

Eamon Gilmore

Question:

51 Mr. Gilmore asked the Minister for Social, Community and Family Affairs if his attention has been drawn to the serious concern expressed by trade unions that an increasing number of workers in the construction industry are being forced to work as unregistered C45 subcontractors; and the plans, if any, he has to have discussions with employers on this matter in view of the implications of this system for the social welfare status and entitlements of construction workers. [2564/98]

The Revenue Commissioners operate a system whereby contractors and workers are informed by way of general guidelines of the difference between a contract of service i.e. employment and a contract for service i.e. self-employment. If both sides complete a declaration after reading these guidelines that they are satisfied their contractual relationship is a contract for service, the principal contractor deducts an amount of tax at source. This is known as the C45 system. The Income Tax (Relevant Contracts) Regulations, 1996, were specifically introduced to ensure that the C45 system is applied only in genuine sub-contract cases.

The fact that an agreement is made between a contractor and a sub-contractor to operate the C45 system does not in itself mean that a contract for service situation applies. It is a matter for deciding officers in my Department and, if necessary, the social welfare appeals office to decide whether a contract for service exists or whether an individual is in fact employed under a contract of service and hence fully insurable under the social insurance system.

My Department is aware from discussions and correspondence with interests in the construction industry of their concern that, in some cases, workers insurably employed under contract of service are required to revert to self employment type arrangements to secure or remain in employment.

My Department is in discussions with the Revenue Commissioners with a view to taking additional measures to ensure that contractors and sub-contractors in the construction industry fully comply with their legal obligations and to enhance the control of fraud and abuse in this sector. The particular issue referred to in the question is also being raised with the employers and unions in the sector as part of the ongoing discussions with them on issues of mutual concern to see what further specific measures may require to be taken.

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