I am aware of the allegations referred to by the Deputy in relation to false or bogus self-contracting within certain sectors. The Government recognises that an effective response to these allegations requires a whole of Government response across the relevant agencies and in particular the Revenue Commissioners, the Department of Social and Family Affairs and the new National Employment Rights Authority.
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 have regard to the Code of Practice for Determining Employment or Self-Employment Status of Individuals.
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 revised edition of the Code of Practice, reflecting the outcome of recent discussions involving the Revenue Commissioners, the Department of Social and Family Affairs, the National Employment Rights Authority, or NERA, and the Social Partners, will be issued shortly and extensively promulgated.
The Department of Social and Family Affairs and the Office of the Revenue Commissioners will have details of the number of bogus self-contractors identified in 2006 in the context of their specific responsibilities. It is the practice of NERA's Inspection Services to refer suspected cases of bogus self-contracting to those bodies for definitive determination in order to ensure consistency in terms of enforcement generally. For example, NERA encountered a claim in 2007 by an employer that workers were engaged on a sub-contract basis and were not, therefore, subject to employment rights legislation. In this case NERA's Inspection Services referred the question of the employment status of the workers concerned to the Scope Section of the Department of Social and Family Affairs. Should it be determined that the workers are employees, NERA will seek to ensure that the employment rights entitlements of these workers are observed.
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 employment rights compliance. New legislation will be published this year to provide for enhanced employment rights measures, including the establishment of the National Employment Rights Authority on a statutory basis. The provision of greater clarity in the application of employment rights legislation to employees is under consideration in the context of that legislation.
The Social Welfare and Pensions Act, 2007, which came into operation on 30th March, 2007, provides for the disclosure of relevant employment data between the Office of the Revenue Commissioners, the Minister for Social and Family Affairs and the National Employment Rights Authority/Minister for Enterprise, Trade and Employment. This legislation effectively enables NERA's Inspectors to join with inspectors from the Department of Social and Family Affairs and/or the Office of the Revenue Commissioners to work together in joint investigations. Such investigations, a number of which have already taken place, have a particular focus on the employment status of workers. In addition, since the enactment of the legislation, ongoing exchange of information is taking place between the bodies.
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 Office of 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 Relevant Contracts Tax (RCT) declaration form is currently being revised to require additional specific information as to why a proposed contract is considered by the parties not to be a contract of employment. The Revenue Commissioners will require those completing RCT forms to return them to the Commissioners in certain circumstances, including where the tracking of the pattern of employment suggests a disproportionate level of self-employment. The information accruing from RCT returns is to be shared in the context of the exchange of information with the National Employment Rights Authority and the Department of Social and Family Affairs. This will be a useful tool in terms of identifying potential cases of bogus self-employment.
Finally, the National Employment Rights Authority has joined the re-launched Hidden Economy Working Group and is working within that Group with the Revenue Commissioners, Department of Social and Family Affairs and the Social Partners in examining issues such as bogus self-employment.