Bogus Self-Employment: Discussion (Resumed)

I welcome today's witnesses, namely, Ms Maeve McElwee and Ms Rhona Murphy from IBEC and Ms Jean Winters and Mr. Conor O'Connell from the Construction Industry Federation, CIF. I will invite the witnesses to make their opening statements in a couple of moments and then members will have an opportunity to ask a number of questions.

I wish to draw witnesses' attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if a witness is directed by the committee to cease giving evidence in regard to a particular matter and continues to do so, the witness is entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. I again ask colleagues to turn off their mobile phones or switch them to flight mode.

We will start with the first presentation from IBEC. I will then take the second presentation after which we will take questions.

Ms Rhona Murphy

IBEC thanks the joint committee for the opportunity to address the issue of false self-employment. Such situations arise where a working relationship is misclassified as a contract for services or commercial agreement when it should, according to common law, be considered a contract of service or a contract of employment. False self-employment can arise in a variety of contexts. It can arise where a commercial agreement between parties develops over time and what started as a genuine case of self-employment has morphed into an employment relationship. It sometimes arises where a de facto employer wishes to avoid the rigours of the employment rights legislation. It can also arise where a highly qualified individual whose skills are much sought after in a buoyant jobs market insists on being treated as self-employed for his or her own purposes, often for the personal freedom it allows the individual and for favourable tax treatment. It is important to make one thing clear: it is not always an act perpetrated by business against individual workers, which is the common subtext to discussions on the subject. IBEC is manifestly opposed to the practice of false self-employment.

It provides a competitive advantage to those who would flout the law at the expense of the majority of compliant individuals and businesses who observe existing laws. Individuals who are falsely described as self-employed may be at greater risk of exploitation and left vulnerable when the working relationship is ended. However, based on evidence referred to as follows, the practice of false self-employment is not as widespread a problem as has been suggested before this committee, and where it does arise, there is an existing legal framework to address it, provided it is invoked.

IBEC is concerned that a narrative is developing in relation to self-employment, even genuine cases of self-employment, to suggest that it is somehow an inferior form of work. This is a persistent narrative which has the potential to become very damaging to the Irish economy. It is vital both for the business community and for individuals that Ireland has a legislative framework that facilitates and encourages entrepreneurship. The reality is, despite assertions from some interest groups to the contrary, that not everyone wants to be an employee. There is a risk of creating of a framework which removes for all practical purposes genuine self-employment as an option for individuals. Oversimplified legislation with draconian penalties, such as have been proposed in the recent past, will cause clients and customers to flee from self-employed service providers for fear that they will find themselves captured by the proposed new laws. It will damage small indigenous businesses most and drive consumers of goods and services towards large well-established companies in respect of which no consumer could be accused of being the employer.

Despite assertions to the contrary, the prevalence of false self-employment cannot be as widespread a problem in Ireland as some assert. This is because the number of self-employed in Ireland amounted to 14% of the total working population in 2018. This represents a decrease in those described as self-employed from the 15.3% measure published the previous year. Within that figure, many of those working people will be genuinely self-employed in professional activities, such as barristers, chartered accountants and GPs, as well as those involved in trades.

It is vital that we reflect on the fact that the scale of the issue cannot be as large as is suggested. It is also vital that we acknowledge that many of those who form that 14% are willingly self-employed, some of whom took time and trouble to establish businesses on their own account. Some self-employed people will have left positions within companies, where they were retained as employees on contracts of employment, deliberately to avail of the flexibility and autonomy, as well as the opportunity to grow their earnings, that self-employment provides.

It is also important to assess properly the figures referred to above, as within that group, a significant proportion are self-employed but also employers in their own right, which means they are even less likely to be falsely self-employed. In fact, the number of individual self-employed persons, described in the 2018 report as "own account" workers, is smaller, at 10.8% of the total workforce in 2017. This has now dropped further to 9.8% in late 2018. Among this number will be included those referred to above as deliberately and willingly self-employed.

IBEC notes the call for increased regulation of the employment relationship – a desire to adopt a simple statutory definition of what constitutes a contract of employment or a brief definition of "employee". IBEC acknowledges that it is important that there is a legal framework in place to allow us to identify false self-employment correctly where it arises and to operate as a deterrent. The current legal framework comprises several common law tests, which are outlined in my presentation and which I will not go through in detail. These are probably familiar to many in the room.

All employment rights legislation in Ireland provides an opportunity for an incorrectly designated person to challenge his or her status and have it corrected as a preliminary issue in proceedings. We have seen many cases of this happening in the employment rights bodies. For example, an individual can issue proceedings under the Organisation of Working Time Act 1997 and assert his or her rights as an employee under that legislation. The issue of the person's employment status is likely to be addressed at the outset of the proceedings, but both Workplace Relations Commission, WRC, adjudicators and the Labour Court have jurisdiction to apply the legal tests to which I referred and issue a binding enforceable decision that the individual is an employee, if the evidence supports that conclusion.

It has been suggested that existing remedies are insufficient, as there exists the fear of possible retribution from the employer in certain instances. Powerful anti-penalisation provisions are contained within the employment rights legislation, including the Organisation of Working Time Act 1997, which provide remedies where such instances arise. It is also possible to invoke the Unfair Dismissals Acts and the remedies available to the complainant include re-instatement in his or her role.

IBEC submits that there is no higher protection or remedy that can be conferred over and above the remedies already on the Statute Book. Therefore, calls for additional regulation of the contract of employment are misplaced. This committee will have heard the submissions made by Professor Michael Doherty of NUI Maynooth last month where he stated that the default status of an individual before the WRC is almost always that of employee. Contrary to the view often promoted as to how employment rights legislation is enforced, that default position has also been the experience of IBEC.

It is also open to those who believe they are falsely self-employed to make an application to the scope section of the Department of Employment Affairs and Social Protection and have the insurability of their employment determined by a deciding officer. At no time has any stakeholder advanced an argument that there was a specific element missing from the common law tests which prevented decision-makers from reaching a decision on the status of an individual or caused them to reach an incorrect conclusion.

IBEC understands that the Minister for Employment Affairs and Social Protection intends to establish a stand-alone body with enhanced resources to investigate false self-employment more efficiently. Initiatives such as these are likely to be of assistance in reducing instances of false self-employment where they arise. As previous submissions to the committee have noted, the consistency of approach will be critical to ensuring the success of this measure.

The complexity sometimes associated with identifying a contract of employment appears to be a source of frustration to some who are eager to adopt short and unambiguous definitions of what constitutes an employee. The difficulty with adopting such an approach is that it risks capturing a range of activities which neither party to the contract ever envisaged to be an employment relationship. Throughout these debates before the committee, no one has suggested a specific proposed change to the current legal framework that would not have a significant distorting impact on the Irish economy. Such changes may result in people who carry out work piecemeal for private individuals, such as window cleaners and sole practitioner professionals, being considered the employees of their customers. This may arise even in circumstances where the customers themselves are full-time employees of other organisations. We need to consider very carefully the implications of changing the basic components of an employment relationship.

As part of its role in the collection of taxes and duties, the Office of the Revenue Commissioner is motivated to identify false self-employment. In the joint report referred to earlier, however, the Department of Finance noted that there is no evidence that there has been any significant change in the level of self-employment in the economy in recent years. From the report, it is clear that even during the recession the share of employment that was accounted for by self-employment was relatively stable. The Department noted that the overall share of own account self-employment was at the time of the report at a relatively low level and, in fact, lower than it was in 1999. This is contrary to the narrative that self-employment is rapidly increasing. Own account self-employment fell from 12.6% to 10.5% between 1999 and 2007, increased again to 12.4% during the recession before falling back again to 10.8% at the start of 2017, and is now at 9.8%.

The report does not offer specific reasons for this slight increase in self-employment during the recession. It is likely, however, that some individuals who lost contracts of employment through redundancy were in a position to take on work on the basis of a commercial agreement. In an economy where very few employers were hiring, those who had skills that lent themselves to doing work on a self-employment basis did so, perhaps, rather than emigrate or endure the wasting of their skills and experience following the termination of their employment. It likely meant also that when the economy recovered, the individuals in question were in a better position to access new contracts of employment as they could demonstrate recent work experience in their chosen field. IBEC respectfully submits that it is positive that Ireland's employment law facilitates individuals adapting to changing economic circumstances in this way.

It has been suggested that the reform of the taxation system might reduce the incentive for individuals to be classified as self-employed. IBEC believes that there is an absence of specific evidence as to why and where instances of false self-employment arise. There are no hard data to support the contention that the motivation to become self-employed is mainly tax avoidance. While, no doubt, within cohorts of contracts that are misclassified there are those who wish to benefit from the favourable tax treatment, IBEC believes that this is just one of a range of possible incentives. In other cases, incentives such as the freedom to set one's own working hours or a desire on the part of some businesses to avoid the legal responsibilities otherwise associated with being an employer are also possible incentives. Before IBEC could endorse tax reform that might operate as a disincentive to utilise the services of someone self-employed in favour of a larger corporation, we would need to be sure that the move was evidence based and would, in fact, operate to reduce the number of misclassified contracts.

An extensive media awareness campaign was organised by the Department of Employment Affairs and Social Protection in 2018. The assistant secretary of that Department shared the outcome with this committee and noted that if individuals are reluctant to come forward for any reason, inspection is an alternative method of identifying and correcting misclassification of employment. IBEC agrees with this approach and is happy to support the co-operation of the business community in facilitating such inspections. IBEC notes that negative inferences were drawn by some Deputies who participated in the November 2018 meeting of this committee, suggesting that a website that attracted thousands of contacts should have resulted in more outcomes from the scope section.

The low rate of progression from accessing the website to forming a complaint should not automatically be ascribed to a negative culture associated with the making of such complaints, of which there is no hard evidence. It may well be that those who sought clarification as to the structure of a true contract of employment confirmed for themselves that they were, in fact, correctly classified as self-employed.

IBEC notes some of the other proposed policy changes to address the issue of misclassification of status. These include introducing a third category of worker which would attract some, but not all, of the statutory entitlements and protections available to employees. IBEC notes the view of Professor Michael Doherty that the introduction of this new status risks introducing more complexity and litigation, which IBEC believes would not be of advantage to any of the stakeholders in this issue. IBEC also notes suggestions to introduce chain liability, where the legal responsibility for incorrect application of employment law may be visited on a client or customer in certain circumstances. IBEC's concern is that such measures would allow non-compliant individuals and businesses to escape legal responsibility, which is visited instead on compliant organisations. IBEC is also aware of concerns that such measures risk making it more difficult for a complainant to identify who, in fact, is responsible for the vindication of their employment rights. We cannot support such a proposal.

At this point in time, the response to the issue of false self-employment has to be stronger enforcement of existing laws and remedies. IBEC does not believe that a case has been made to change the law in a way that would reduce the number of falsely self-employed individuals. Even if fear of retribution is dissuading people from invoking existing laws, more severe sanctions than those that already exist will not necessarily fix that issue, to the extent that it exists. However, inspection and enforcement will.

IBEC notes the concerns expressed about practices of false self-employment arising and that it is localised in specific sectors. We are of the view that the existing legal framework is appropriate and robust enough to address any such instances. Rather than propose a full-scale shift in the determining factors of the contract of employment, IBEC suggests that a better approach would be to: continue with a balanced and impartial awareness campaign on what constitutes a contract of employment; ensure existing inspection mechanisms and facilities are adequately resourced; and support the genuinely self-employed by reducing and removing the disadvantages of self-employment through access to maternity benefit and other benefits, some of which is already in train or in place.

Ireland’s economic success is in part based on how we regulate our labour market. We need flexibility in our working practices - flexibility to engage whether directly or collectively - and we must be able to attract the talent needed to sustain strong economic growth. None of this should come at the expense of employment rights, but before we regulate an already heavily regulated labour market further we must at least come from a position of being able to identify the nature and scale of the challenge we are trying to fix.

I thank the committee for its attention.

Ms Jean Winters

I am the director of industrial relations and employment services at the Construction Industry Federation, CIF. I thank the joint committee for the invitation to attend and to contribute to the discussion on bogus self-employment. I am accompanied by my colleague, Mr. Conor O'Connell, who is the regional director of CIF.

The construction industry comprises a number of subsectors - general contracting, civil engineering, mechanical and electrical contracting, house building and specialist subcontracting. Contractors operate in the public and private sectors in the industrial, commercial and residential and domestic markets. The industry is based on a system of tendering and contracting. In general, a main contractor tenders for and is awarded a contract and the various elements of the contract are subcontracted to specialists to complete. In the domestic market, contractors or specialist subcontractors are frequently engaged directly by the consumer. The industry currently employs approximately 144,000 workers, including professionals such as architects, engineers, quantity surveyors, project managers and site supervisors, and site workers such as foremen, craft persons, general operatives and apprentices. Workers in the industry are mobile by nature and must travel from site to site in accordance with the needs of the industry.

CIF is the representative body for contractors and employers in the construction industry. Our members employ substantial numbers of construction workers and we have a strong focus on training apprentices and general operatives to ensure that employees have the necessary skills and expertise to deliver a quality product. Workers in the industry are covered by the sectoral employment order, SEO, for the construction sector of 2017. This SEO, which CIF applied for, sets legally binding hourly rates, pensions and sick pay for workers in the industry. CIF negotiates terms and conditions for construction workers with the Irish Congress of Trade Unions, ICTU, under the construction industry national joint industrial council, a body which is chaired by the Workplace Relations Commission, WRC.

The majority of firms in the industry are small and medium-sized enterprises, SMEs, employing fewer than ten people. These firms are engaged in general contracting or specialise in a discipline such as groundworks, bricklaying, formwork, plastering, electrical or mechanical work, or painting and decorating. These workers move around from site to site as work dictates. Varying numbers and categories of workers will be engaged on any site depending on the size of the contract, the nature of the work and so forth.

CIF is supportive of and promotes the current guidelines on the classification of workers, a document which was drawn up by a Government appointed expert group in 2001 and updated in 2007. CIF is also supportive of the inspectorate regime implemented by the Department of Employment Affairs and Social Protection and the Revenue Commissioners to ensure the proper classification of workers. We are also supportive of the work of the WRC with regard to the promotion of and compliance with all relevant employment protective legislation. Indeed, we recently requested a meeting with the compliance and enforcement division in the WRC to discuss measures to ensure compliance with the SEO. CIF was also an active participant in the hidden economy monitoring group, which was chaired by the Revenue Commissioners.

The CSO provides data on the total number of workers employed in the construction industry, the number of self-employed with employees and the number of self-employed with no employees. The latest data confirm that the total number employed in the industry stands at 144,000, of whom the self-employed with employees number 14,600 and the self-employed with no employees number 31,900.

Subcontracting is a feature of the construction industry. The industry is heavily dependent on subcontractors who specialise in a specific discipline. The self-employed may require employees depending on the size of the contract, the segment of the market he or she is operating in or the workload at any given time. Unions in the construction sector have been vocal about their concerns regarding the perceived level of false self-employment in the construction industry. Recent reports on the misclassification of workers do not bear out the unions' concerns. In August 2018 the Economic and Social Research Institute, ESRI, published research on "Measuring Contingent Employment in Ireland". The ESRI looked at the prevalence of self-employed with no employees in several sectors and concluded it remains a relatively minor component of the Irish labour market, accounting for a little over 2% of total employment in 2016.

In January 2018, the Department of Employment Affairs and Social Protection, in conjunction with the Department of Finance and the Revenue Commissioners, published a report on the implications for social insurance and tax receipts of intermediary employment structures and self-employment arrangements. The report noted that available data do not indicate that self-employment accounts for any significant increase of the labour force. It also noted how the available data indicate that the proportion of self-employed people in the workforce generally is decreasing. In response to submissions received, a construction subgroup was set up to examine issues relating specifically to the construction industry. The report concludes that the Revenue Commissioners and Department of Employment Affairs and Social Protection are actively pursuing non-compliance and are successfully encouraging and enforcing compliance in the cases selected where non-compliance is an issue.

In May 2018 the Department of Employment Affairs and Social Protection launched a media advertising campaign to highlight the issue of bogus self-employment. Individuals who believed they were in a false self-employment situation were invited to make an application to the Department for an assessment of their employment status. It is our understanding that, despite the concerns expressed publicly by the trade unions about the perceived prevalence of false self-employment, the level of direct contact with the Department's scope section from individuals as result of the campaign was low.

Self-employment, on condition that it applies in accordance with all relevant guidelines, provides flexibility to all parties concerned. It provides an opportunity for an individual to set up in business and to grow and create employment. It has been one of the key factors supporting employment recovery and growth in the economy. Current data indicate that the current level of self-employment in the construction industry is at similar levels to that which pertained in 2006 and 2007, before the recession. There is no evidence to suggest that there is a high level of false self-employment in the construction industry.

Any new measures in this area, based purely on anecdotal evidence and without concrete data to support their introduction, would introduce undue rigidity into the sector, thereby stifling the industry’s ability to grow and to create employment.

The CIF is supportive of compliance with all statutory provisions, including employment protective legislation. We support the work undertaken in this area, both jointly and separately, by the various State bodies with powers to enforce compliance. No data are available to support claims by some unions in the construction industry of high levels of bogus self-employment in the sector. Any new measures which would unnecessarily introduce rigidity into the industry would be a retrograde step and hinder the industry’s ability to grow and create employment.

Thank you. I will come to Deputy O'Dea shortly. I want to make a general comment, and the Department made the same comment when its representatives were here, about the number of people who are self-employed declining as a percentage. Ms Winters is right that the percentage is declining, but there is no decline in the actual number of people because the total workforce is increasing significantly. Using percentages can sometimes skew the picture a little.

The committee is interested in the construction industry in particular. Ms Winters stated:

In August 2018 the ... ESRI published research on “Measuring Contingent Employment in Ireland”. The ESRI looked at the prevalence of self-employed with no employees in several sectors and concluded it remains a relatively minor component of the Irish labour market, accounting for a little over 2% of total employment in 2016.

The figure Ms Winters gave for the construction industry was 31,900, or more than 20% of the total, who are classed as self-employed with no employees. That contrast between the 2% in the ESRI report and the 20% in the construction industry is one of the reasons the committee has concerns. Ms Winters can come back to this in due course. It is not that we are making unfounded allegations or anything like that. It is the fact Ms Winters has clearly demonstrated that 2% is the across the board percentage but her own figures have more than 20% as self-employed. This is why there is a spotlight on the construction industry in particular. Ms Winters will have an opportunity to address that in more detail. I call Deputy O'Dea.

I apologise as I have to leave to attend another appointment shortly. I thank both organisations for coming in and for their presentations. I want to make some general points. Ms Murphy referred to the narrative that supposedly supports the approach the committee is taking and the various legislation being put forward. There is a narrative, yes, but there is also a counter-narrative, which is that anybody who wants to do anything about bogus self-employment is in some way motivated to do down genuine self-employed people and to interfere with arrangements that already exist for highly specialised people in the IT area who want to offer their services on the basis that they are self-employed. That is not my intention and, insofar as I can speak for my colleagues, I do not think it is their intention either. We are public representatives and we represent the public. We have to respond as public representatives to issues that are coming to us on the ground. There is a lot of talk about hard evidence and soft evidence, and we can argue about figures. However, I am dealing with the blunt reality in my constituency. Even as we speak, I have complaints on hand from within the construction industry about people being forced to act as self-employed when they are patently not self-employed. I want to make that point.

The IBEC submission states: "Ibec acknowledges that it is important that there is a legal framework in place to firstly, allow us to correctly identify false self-employment where it arises and secondly to provide a remedy or a sanction to deter people from engaging in this practice." It goes on to state that "there is already such a framework in place". Where we differ is that I do not agree that the current framework is working. My colleagues from People Before Profit have separate legislation on this and, therefore, they do not agree either. My colleagues from the Labour Party have similar legislation, so they do not agree either. Of course, we are only members of the Opposition. More importantly, the Minister does not agree either because she is now proposing legislation. If she, as Minister for Employment Affairs and Social Protection, felt that everything was hunky-dory and that all we need do is enforce the existing regulations, she would not be busily instructing her civil servants to prepare separate legislation. As matters stand, there are three pieces of legislation floating around from Fianna Fáil, People Before Profit and the Labour Party, which put forward legislation that should have been voted through the Seanad last night if all of our Fianna Fáil Senators had turned up, but unfortunately they did not and the legislation was narrowly defeated as a result, which is something we have to deal with ourselves. As I said, the Minister is also preparing legislation. We will all put on our collective thinking caps and put our heads together to ensure that whatever legislation ultimately emerges will not be, as Ms Murphy described it, blunt, oversimplified or draconian.

I have several questions arising from the contribution from Deputy O'Dea. Unfortunately, I will not be able to remain for the duration of the meeting and I apologise to our guests. Both the CIF and IBEC representatives expressed their satisfaction with how the current regime operates. I could not possibly agree with that and I think they know why. I am long on the public record as expressing my concerns about the operation of the code of practice that was introduced in 2007 and the various other means by which individuals have their employment status defined and determined.

Deputy O'Dea accepts our legislation should have passed in the Seanad last night but did not for want of support from Fianna Fáil Senators, but that is another day's work. I want to put on record that we on this side of the House are all united in our efforts to have something done about this egregious situation. We can argue all day about percentages and so on, but it is a very real issue in our society and our economy. The Minister acknowledges this in that she went so far as to put on the record of the Seanad last night that she intends to introduce legislation to deal with this phenomenon. One of the things she wishes to do is to put the 2007 code of practice on a statutory footing, so in essence she wants to put that into primary law. That was also one of the ambitions of the legislation that I brought forward to ensure the inclusion in primary law of the tests for false self-employment, with which the witnesses and the Government are familiar because those tests were first introduced into Irish primary legislation in the context of what was then the Competition (Amendment) Bill in 2016 and into 2017, which has since been enacted. Those provisions are placed in competition law for the purposes of providing exemption from competition law for certain categories of workers who should have the opportunity to be represented by a trade union for the purpose of collective bargaining. Our ambition was to take those provisions, insert them into primary law and apply those definitions in terms of tests for false self-employment to the broader population of workers.

The Minister is conscious that there is a problem to the point where she is preparing to legislate, and I would appreciate the views of IBEC and CIF on that approach. They seem to be satisfied there are sufficient regulations and a sufficiently robust legal framework in place to enable somebody to have their employment status determined with clarity. We do not believe this is the case. They also refer to the fact there are protections in place for an individual who is taking a case to the scope section of the Department or indeed to the WRC on separate matters, but the reality is that, for those individuals, even though some would say there is a presumption they are employees, that is not always the case. Human nature being what it is and given the precarious nature of the situation many of these workers find themselves in, they are inclined not to take cases because they fear that once they put their head above the parapet, it is going to be chopped off and they will be effectively blacklisted in the industry in which they work.

I know that a form of blacklisting is going on in the construction sector. That is as clear as the nose on our collective faces. I have recently learned that there is a form of unofficial blacklisting going on in parts of the pharmaceutical sector and in the information technology sector, sectors in which people are engaged in these kinds of practices. This needs to be fixed. There is a difference of opinion as to the extent and nature of the problem and how it should be dealt with. There would not be three separate Bills before the Oireachtas, and another one coming from the Government, if the political system did not believe this was a problem.

In the legislation I produced I was at pains to protect genuine self-employment and entrepreneurship, but looking at the numbers of self-employed individuals with no employees, particularly in the construction sector, it is clear that they are not all entrepreneurs. I am aware of labourers - not skilled individuals but labourers - on construction sites who have been forced to register as self-employed or who have been unaware that they were so registered because the contractor did the registration for them. When such people lose their positions they are not entitled to redundancy and have no sick pay or holiday entitlements. They are left with nothing. They only become aware that they were self-employed when they go looking for unemployment support. It is an absolutely outrageous state of affairs and a sad reflection on our society. We all want to protect genuine self-employment.

I value the regulated market economy that we have. There is no doubt about that. I value the contribution that decent, genuine, productive businesses and entrepreneurs make to this economy. We would not have had the increase in employment we have had in recent years if we did not have the people who were prepared to take those risks. This increase is also thanks to the work of IBEC and others in formulating Government policy. This is issue will not go away and the Minister intends legislating for it. I would appreciate the witnesses' views on what the Minister is doing. They may only be aware of her intentions from media reports. Has either organisation been consulted by the Minister about the legislation she intends to produce? She stated in the Seanad last night that she intends to produce this legislation within months.

Both delegations finished their presentations on a point with which I agree, namely, that we do not have enough data on the scale of the challenge we face. When Department officials appeared before the committee to discuss this issue it was clear that they had not done enough research and their access to various employment sectors was not sufficient to allow them to tell us how great the problem is. We are here representing our constituents and we believe the problem is widespread. I would say that all of us here are members of trade unions and, from data collected by the trade unions, we know there is a deep and growing problem. The witnesses indicated they do not have enough evidence to identify the scale and nature of the challenge. They stated there are not enough data available to support claims made about the levels of bogus self-employment in, for example, the construction industry. We might start by agreeing that we need to look very deeply at this sector and at this problem to find out what is going on. That will require the co-operation of employers, big contractors on building sites and in industry and the State because it too sometimes uses what we would determine to be bogus self-employment to fill roles. In many cases, this is not deliberate and the State does not set out to do it but there has been such an increase in contracting out and subcontracting that malpractice often goes under the radar. We need to get under that radar and examine exactly what is going on.

As a previous speaker said, we are not making this up. We do not have Bills on this issue before the House because we have nothing else to do or it amuses us to do so. There is a real problem here. I will draw attention to some evidence from the Irish Congress of Trade Unions, ICTU. I hope the witnesses will bear with me as I have a lot of notes in front of me. A briefing note from the ICTU states:

The report notes that in 2017 the Joint Investigations Unit [of Revenue] initiated a campaign specifically focussed on the construction sector. As a result of this activity, €60.2 million was recovered by the Revenue Commissioners and nearly 500 subcontractors reclassified as employees [as a consequence]

That is an important fact and one with which the witnesses will not deny. These facts come from Revenue. In 2017, one investigation recovered €60 million that was owed to the State, yet the witnesses are telling us that the evidence is anecdotal, there is nothing to see here and we should move on, and we are somehow imagining a problem when there is none. We should acknowledge that there is a problem but that we have not investigated it properly. Investigating it yields results and the investigation by Revenue is a serious one.

The witnesses also suggested there is not problem because self-employment levels are falling. I will share an interesting point from a study at which they should look because it relates to their industry. The trade union, Connect, has carried out a seriously good study on bogus self-employment. It points out that the Central Statistic Office labour force survey shows that the number of employees in self-employment who do not themselves have employees across a range of employment sectors is increasing significantly. If one takes on a contractor, that contractor is free to take on other people to do work occasionally, permanently or from time to time. While the number of self-employed people who are hiring others to work for them is declining, the number of self-employed people who do not hire anyone else, that is, people who work for themselves, is rising dramatically. That gives one an idea of the type of increase we believe is occurring. In the second quarter of 2018, the percentage of people in construction classified as being in self-employment with no employees was 24.3%, while in the transportation and storage sector it was 14.8%. That compares with a rate of 3.9% in industry as a whole. There is, therefore, a problem. If construction workers are being hired who do not, in turn, hire others, they are defined as having their own contract.

I ask the witnesses to define what they believe to be bogus self-employment. I will describe what we generally accept as the definition of a self-employed person. It is somebody who has control over what is done, how it is done, when and where it is done, and whether he or she does the agreed work personally or hires others to do it. Labour lawyers call this the independence test. It should, therefore, be simple enough to tell what the real thing is. A worker with only the tools of the trade who does not hire or manage other workers or who works when, where and how he or she is told by a boss should always be counted as an employee. Workers like this can be engaged as subcontractors, but they are then treated as self-employed for the purposes of workers' rights, taxation, PRSI, insurance, pensions and so on.

I would like to hear the representatives definition of bogus self-employment. Let us think about the workers in this room. There are people who work for the Civil Service and people who operate the cameras behind the glass. We expect that when they show up for work they are told by their employer what to do and that their pay, hours and conditions are determined by their employer. We do not expect them to provide their own equipment or hire other workers because they are employees. We expect that they do not make a profit based on how much they do regardless of how efficient they are. By most people's common sense definition, they are employees. They turn up and are told up what to do. The workers behind the glass who film these proceedings are not considered employees. They are defined as self-employed. Is that how the witnesses view self-employment? These workers are not entitled to the protections that employment laws give to other workers, including members who pay into pensions and pay PRSI and so on. Their contractors deem them to be self-employed. They sign a contract which states they are a contractor working for the company the State hires to do this job.

They have no choice but to sign up to it. They also have no control over their daily work and how they do it. I make that point because this is a function performed by an arm of the State for the State. I would define that as bogus self-employment. I would like the witnesses to define how they define bogus self-employment.

The most important question, probably, is how the employers' group defines bogus self-employment. I beg to differ with the remarks made regarding the construction industry. In 1999, the Committee of Public Accounts instructed Revenue to investigate bogus self-employment in construction. That investigation found that 20% of people were found to be misclassified as self-employed. The following year, the Comptroller and Auditor General demanded another review of the area to ensure there had been no misunderstanding in terms of the findings. That investigated was repeated because he was not satisfied the issue had been resolved. Revenue was forced to reinvestigate construction and again 20% of people were found to be misclassified as self-employed. This is not an issue that arose yesterday or today, or last year. The Committee of Public Accounts-ordered investigation was carried out in 1999 and this practice was happening prior to that.

There is a serious problem with bogus self-employment. It skews the labour market from the point of view of workers' rights and entitlements, payments to Revenue and employers' responsibilities in terms of PRSI classification and so on. It also skews the economy and the rights of the worker, which is a really important point. We know that there are bogus self-employment contracts are operating right across the economy, including in the courier and English language teaching sectors. Pilots are also operating on contracts under which they are not directly employed by their employer, as are journalists, pharmaceutical and construction workers.

I received an email recently from a woman who took up a position in CIE Tours on Abbey Street. She had to engage with the scope section in regard to her working conditions. The scope section upheld her claim that she was directly employed by CIE Tours, insurable under the Social Welfare Acts under PRSI Class A, but CIE Tours is appealing that decision. This woman claims that most of the people working in that company are in bogus self-employment. They are forced to sign contracts that put them in that category and they are afraid to stand up and be counted because of the precarious situations they are in. This does not lead to an economy from which all workers benefit and in which they are protected under labour court law.

The Irish Congress of Trade Unions, ICTU, I am sure, has a great deal of contact with the scope section. A number of actions have been proposed in regard to addressing bogus self-employment, including that workers should only be allowed to register as self-employed if they satisfy agreed criteria. However, it has been said that the new system is not clear in that regard. It is also proposed that principal contractors be made liable for 10.95% employer PRSI for all subcontractors; that Revenue's capacity for PRSI non-compliance interventions be strengthened; and that the Workplace Relations Commission-Labour Court should replace the Department of Employment Affairs and Social Protection in reviewing and reporting misclassifications, which is important. Currently, the scope section and the WRC-Labour Court do work in this area but I think only one body should do this work. People often have to engage with the High Court through the scope section and must jump through numerous hoops to ascertain their classification. I seek the witnesses' views on the recommended repayment by employers found guilty of the misclassification of workers of all unpaid PRSI payments and on the introduction of legislation to define the term "worker-employee". What was proposed by Professor Michael Doherty is complicated but it can be done. It is up to as politicians and employers groups to ascertain what that is.

A lot of the relevant questions have been asked, and points made. The Construction Industry Federation, CIF, gave us a breakdown of the numbers of people working in the construction industry and the number of people self-employed with no employees, which at 31,900, stands out. The witness also made reference to the reports by the ESRI and the Department of Employment Affairs and Social Protection on this question. Has the CIF reached out to the people it reported are identified as self-employed with no employees? Has it done any research in this area?

Before I call the witnesses, I wish to expand on the final point made by Deputy Carey. The figures produced from CIF are CSO figures. Almost 32,000 workers in the construction sector are self-employed with no employees. That is a very significant number. As I said earlier, it is much higher than the situation across industry in general. I accept that the data are not available, but would a person declared to be self-employed who has worked for the same company for 12 months still be deemed to be self-employed? In other words, at what point would that person be deemed to be not self-employed? As I said, those data are not available to us. We know only that there are 32,000 self-employed persons in the construction sector. I make that point to be transparent and fair.

Deputy Bríd Smith made the point that many of us were members of trade unions. I have never been a member of a trade union. Prior to my election, I was one of those people who was self-employed with employees who spent 20 years working on construction sites in Ireland and the United Kingdom. I have seen a lot of the actual practices. I do not want that to influence any of the responses. I want the figures that are produced in the various reports. From an industry point of view, it would be well worthwhile if, as mentioned by Deputy Carey, the CIF were to carry out an analysis of the 32,000 people who are deemed to be self-employed with no employees and how long they have been subcontracting to one contractor and so on because that would give an indication of what is going on in the industry.

Ms Maeve McElwee

I will try to address the questions in the order in which they were asked. The first point made by Deputy O'Dea was around the counter-narrative that can emerge and the fact that potentially it is seen as trying to do down individuals within this particular situation. IBEC understands that this is certainly not the intention in any way but it does highlight the complexity of the situation. Our challenge is to highlight the complexity of trying to regulate in the framework we are examining here. Our view is very much that we do have a system and a structure in place that has worked. It is clear from the questions raised this morning that many of the challenges arising are in regard to utilisation of the framework. We are not necessarily seeing any specific instance in which the framework itself has not delivered the outcome we would have expected.

In regard to Deputy O'Dea's point that there are a number of individuals of whom he is aware, we believe he should encourage those people to take their action through the WRC, where the cases can be determined. There is legislation in place. We put great trust in the independence of the WRC. It adjudicates on all of our employment rights and it has significant wealth of experience across all industrial relations matters. Its inspection services are exemplary. In many ways, we already have a really significant structure in place to deal with those issues. The WRC has significantly deal with cases. We are not aware of any major number of cases where those rights have not been addressed or have been the subject of significant appeal.

In response to the comments of Senator Nash, we are talking here about the ability of people to engage with the protections that exist. We need to be careful with our use of language and words such as "phenomena". We do not deny that issues are arising. In fact, we are very aware that there are compliance issues which is why we are very supportive of the Minister's approach in terms of investigation and ensuring compliance. We are not necessarily saying that we are satisfied with how the current regime operates. We acknowledge that there is a problem but it is not necessarily connected to how the regime operates; rather, the problem lies with the utilisation of the regime. There is adequate legislation in place that can address many of the concerns. The issue is with managing the enforcement of the legislation in a consistent way. We must encourage the enforcement of the legislation. We should have confidence in the systems. We have confidence in legislation's ability to deal with all other areas of employment rights and this area should not pose any more of a challenge. Employees, contractors or individuals who feel they have an issue they wish to raise should be able to do so.

Deputy Bríd Smith raised the issue of data and clearly there are lots of challenges in this area. That said, the ESRI and the Departments of Finance and Employment Affairs and Social Protection have produced significant volumes of data on this area. These are independent bodies with a significant interest in determining the right data in respect of independent contractors. While we recognise that there are challenges in certain sectors, we are talking about only 2% across the board. When we make regulation, we always need to be cognisant of the fact that it will impact the entirety of labour market and we need to manage any unintended consequences, especially when we have a regime in place. We would accept the data put forward by ICTU on a previous occasion at this committee. That showed that the 2017 initiative addressed some of the concerns that are arising and it converted 500 people from self-employed status to employed. In many ways, that upholds what we are trying to share with the committee, which is our belief that we have a strong regime. When we address issues through the compliance framework, we find that it works very well. The supports that underpin that compliance are important. They provide the opportunity to deliver results without increasing the complexity of our employment legislation or producing any unintended consequences by layering more legislation on top. Everybody has anecdotal stories but we cannot rely on them. We must rely on the data and the hard figures and it is important that we do so throughout the entirety of the process. Just because there has been an increase in the number of self-employed people in our economy does not necessarily mean we have increased bogus or false self-employment across the board. Naturally, our economy changes, develops and grows. We were very keen to ensure-----

I am sorry to interrupt but I must make an important point. Frequently witnesses say that the percentage is dropping, which is correct. I am not talking about bogus self-employment but self-employment. While the percentage is dropping, the number of people is not dropping. The number of people in the workforce who are self-employed is not dropping. I want to make that distinction in case we give the impression that it is diminishing to such an extent that it is not relevant. There are more than 300,000 people classified as self-employed. That is the size of the cohort and while I accept what Ms McElwee has said in terms of the percentage diminishing, the number of people involved is sizeable.

Ms Maeve McElwee

I thank the Chairman. I was addressing the point made by Deputy Bríd Smith about the increase in the number of people who are self-employed. My point is that such an increase is not necessarily indicative of an increase in false or bogus self-employment. There will be lots of people who are willingly self-employed and who will have chosen that course for their own benefit. The issue is to manage the narrative. Rising self-employment does not automatically mean rising false or bogus self-employment.

On the question of definitions, I am not going to comment on the individual circumstances of anybody here, whether at this committee or in the wider environment because I have no background information or details on it. However, there are common law tests in our legislation regarding integration, mutuality of benefit and control and enterprise tests. All of these exist. We have a framework with which we can make a definition and a decision around managing direct employment or self-employment. It has always been a principle of our systems that we can look beyond a written contract and make a judgment on the operation of that contract. The structures are there.

The question was asked about the point at which an individual can be determined to have become an employee. That will vary, depending on the circumstances. It will change and will depend on the individual, which is part of the complexity of this particular issue. Everybody's circumstances are different and we expect our legislation to take into account the fact that people are not the same. I may not want to be judged to be an employee simply because I have had one contract with one employer for a particular period. I may not want to be converted to employee status against my will. It is about utilising the frameworks that we have and the legislation that the courts have developed over many years, which have served us well in being able to make these determinations. They must be done on an individual basis and we have the framework to do that.

Does Ms Murphy wish to add to that?

Ms Rhona Murphy

Yes, I echo what my colleague has said. In terms of the issue we are trying to fix here, Deputy O'Dea said that he is eager to preserve true self-employment and not to undermine it in any way, which is good to hear. I accept the Deputy's integrity and bona fides in that regard but the problem is that the definition of "employee" is critical. The issue is how the common law tests that we have are applied. They are necessarily nuanced and have developed over time to capture the variety of arrangements that exist. Those arrangements are very much sought after and wanted by the individual self-employed people to whom they apply. That is why we have a concern about how any legislation would develop. When I heard Senator Nash referring to the Competition (Amendment) Act 2017, I was very concerned because he suggested that it consolidated the existing Revenue code into a statutory definition but it did not do so. It summarised, in a very brief form, what the code says and would likely capture a great many people out there who would not consider themselves by any means to be falsely self-employed or an employee. The other issue it raises is the question of the dependent contractor which is in the same section of definitions. In that particular section, the legislation states that a dependent contractor is somebody who has two or fewer clients and who works for another person, whether or not that person is an employer of other people. That raises a very scary prospect for individuals who might be seeking work to be done only to find that the person that he or she believes is an independent contractor engaged to do the work has no other clients. Suddenly, the question arises as to his or her rights. Right now, under the Competition (Amendment) Act, he or she has imited and contained rights for competition law purposes but if we are going to look to sections like that for definitions in any new legislation, that would be a worrying prospect for a lot of self-employed people as well as for business generally.

Before we move on to the CIF, could we just respond to what the IBEC representatives have just said?

Yes but I ask the Deputy to be brief.

On the question of definitions, I find what Ms Murphy has just said interesting. She started by saying that the definition of "employee"must be flexible to allow it to morph and change as circumstances change but that goes to the heart of the problem. IBEC wants to have it every way. It wants to change the definition to suit an employer and then argue that it is to suit the self-employed. That is the most illogical form of constructive ambiguity that I have heard in a long time.

Ms Murphy is doing it in order to cover up what really is not about the individual window cleaner, but the widespread practice of forcing workers to define themselves as independent contractors in order to exploit their working conditions, pay and so on. It leaves them very insecure and also robs the State of social protection funds, taxation and all the other things. Ms Murphy needs to listen back to what she just said because the workers who provide us with the recordings, provide us with a very valuable piece of evidence. What she just said makes out that definitions can and must be flexible in order to allow for the flexibility of the labour market to suit IBEC.

I thank Deputy Smith. I ask Ms Murphy to respond.

Ms Rhona Murphy

I am not talking about a flexible definition, I am talking about the same nuanced definition that can be applied to different sets of circumstances. We return to the construction industry over and over again in the course of this debate but we are talking about a very wide range of services that are being provided on an independent contractor basis.

That sounds like a flexible definition to me.

Please, Deputy Smith.

Ms Rhona Murphy

That is really it. What we need is a definition or test of employment that would be sufficiently broad to capture all the sectors and different forms of work, all the different skills that will be involved and ensure that those are protected. I am not talking about a definition that will change as and when-----

Ms Maeve McElwee

I am very conscious of the committee's time and the need to let others in but I would like to state once again that IBEC is manifestly opposed to the issue of false and bogus self-employment. Our submissions here are not in any way to encourage a situation where that is allowed to prevail. It is not good for business competition and is certainly not the intention of IBEC. It is more around managing the issue in terms of allowing our labour market to work effectively and with some flexibility. It is not to provide opportunity to employ people falsely in a self-employed capacity.

I thank Mrs McElwee for that clarification. Would Mr. O'Connell or Ms Winters care to speak?

Mr. Conor O'Connell

Several Deputies have acknowledged the need for greater data on this area before legislation is enacted. We support such a stance. I also note all Deputies have acknowledged legitimate self-employment and that the construction sector, by its nature, has a large number of people who are self-employed. I will explain some of the reasons behind that. There was a very severe downturn in the construction sector where a situation developed, especially among the craftspeople, such as skilled carpenters, skilled plasterers or skilled bricklayers, who became less reliant on employers for employment and more reliant on themselves. They could control the flow of work. Continuity of employment is a significant issue in the construction sector, even now in places where the industry is busy there may be a piece of blockwork to carry out for several weeks and then no more need for bricklayers or blocklayers on the site for several more weeks or months thereafter. Even when a contractor is busy certain trades or skills may only be needed at certain times. Therefore, continuity of employment can be an issue so some people go down the route of being self-employed to have greater control of their flow of work. That is one reason such a large number is self-employed in the sector. However, as members have said, there is a need for more data on the matter.

There are also structural issues in the industry. Some years ago one-off houses were able to opt out of the building control amendment regulation system. We warned at the time that this would not be conducive to a properly regulated industry. If we are going to examine bogus self-employment we must also examine some of the structural issues in the industry which are not conducive to a properly regulated environment in the construction sector.

I will ask Mr. O'Connell a technical question. The figures speak for themselves. There is a disproportionately higher number self-employed in construction. As an industry body, does CIF do any analysis on these figures or any risk assessment on bogus self-employment?

Mr. Conor O'Connell

No, we have not done any risk analysis but we are aware anecdotally from our members. Over the last months and years, the Revenue Commissioners have begun to inspect the industry far more in respect of self-employed versus worker. Some of the figures mentioned by Deputy Bríd Smith are not insignificant - 500 employees reclassified as workers - nor is the amount of money recovered insignificant at €62 million. These figures show that proper enforcement in the sector can and does work for the betterment both of contractors and employees working in the industry.

My colleague, Ms Jean Winters, has recently met with the Workplace Relations Commission and its enforcement section. We do need greater enforcement in our industry. It is fine having rules and regulations but they need to be enforced to ensure that contractors that try to go operate in a proper manner are backed up by the State through a proper enforcement regime.

Ms Jean Winters

My colleague, Mr. O'Connell, has given an outline of the structure of the industry. There has been a lot of discussion at this meeting about the official figures, 31,900 self-employed without employees, but the industry is based on a system of contracting and sub-contracting. Just because approximately 20% of the overall workforce is categorised as self-employed without employees does not mean that is bogus self-employment.

It does not make that point, however. I specifically said that it is a sector that has a substantially higher level and therefore there is greater risk.

Ms Jean Winters

Yes, and I absolutely accept that. Given the nature of the industry, it explains to a large extent why there would be larger numbers of self-employed, either with employees or without, because it is an industry which is based on contracting and sub-contracting.

Senator Nash and Deputy O'Dea, in particular, stated here today that they know of people who have been forced into self-employment. That is clearly wrong and we categorically state that. We support the legitimate contractor and in the case of somebody who has been forced into self-employment it is clearly wrong. The legitimate contractor loses out if this other contractor has a competitive advantage. That sort of practice is detrimental to the industry.

Deputy Bríd Smith referred to the campaign in which the Revenue Commissioners were involved in 2017 when more than €60 million was collected. As Mr. O'Connell said, to us it demonstrates that there are mechanisms in place to ensure compliance with all regulations, guidelines and legislation and we would like to see even more of that. We are in favour of ensuring that all workers are aware of the guidelines and codes of practice in place and we want inspection and enforcement, and more of it. As Mr. O'Connell noted, we have been in contact with the Workplace Relations Commission to discuss greater measures to ensure compliance with the sectoral employment order in the construction industry. It was the CIF which applied for that order. It sets legally binding rates of pay, pensions and sick pay for workers in the industry. The CIF applied to the Labour Court in 2016, asking it to conduct an examination of the industry with a view to introducing a sectoral employment order. At that time, we asked the construction workers unions to come along with us and make a joint application. They decided for their own reasons not to do that, so we went alone. A sectoral employment order is in place and we are very much in favour of ensuring that it is complied with and we seek greater measures to ensure compliance.

Deputy Joan Collins spoke of the principal contractor and its responsibilities. If one looks at the public sector contract currently in place, clause 5 sets out the contractor's obligations to ensure that all workers on site receive all their entitlements under registered employment agreements, sectoral employment orders and various other employment protection legislation.

It also sets out that all workers on site have a right to be a member of a trade union if they so wish and that if a trade union has concerns about non-compliance, a union official may contact a designated member of the contractor's management team to discuss those concerns with a view to putting the situation right. Certain obligations are already in place and we believe they should be complied with and enforced. I am not saying that there is absolutely no incidence of bogus self-employment in the construction industry as that would be a foolish statement to make. The mechanisms are in place to allow those with the powers to go out and inspect any incidents to so do. As Deputy Bríd Smith stated, the Revenue campaign in 2017 bears that out. We are all in favour of that.

Deputy Joan Collins or Deputy Bríd Smith referred to the Connect trade union and its report. We work quite closely with Connect. We work with it on the electrical national joint industrial council which will meet on Monday. We will meet representatives of Connect tomorrow on the mechanical sector. We work quite closely with it. If there are issues that we need to discuss, of course, we will do that. Our position is that if there are issues - and I accept that there are - we need to tackle them. We believe the mechanisms are in place to tackle all issues of bogus self-employment and that they should be used. If we need more inspectors on the ground, that should be facilitated. There should be more awareness among workers generally of their entitlements and the work of the scope section of the Department. The measures are there and should be used. If they need to be enhanced, that is the way this issue can be tackled.

I call Deputy Collins, to be followed by Deputy Smith.

The point was made about 2017 and the misclassification and the €60 million and so on. However, Ms Winters did not acknowledge that in 1999 the Committee of Public Accounts instructed Revenue to investigate bogus self-employment in the construction industry. A level of 20% was identified. This is not something that only happened in 2017 or 2015; it goes back to 1999.

What I am hearing from the two federations is that there is legislation and that workers should use it and it should be strengthened and so on. In 1979, I left school and began work in the post office. I knew exactly what I was going into. I was employed by An Post. I had a contract and a probationary period before being given full-time employment. That is not what is happening now. In the courier industry, one works for a company but one is given a contract stating that one is self-employed and looks after one's own holiday pay and such things and has no rights. The situation is similar for Ryanair pilots. They are on contracts stating that they are not directly employed by Ryanair even though they are working for Ryanair, their rosters come from Ryanair and they must be present at certain times to fly particular planes. This fundamental change in the industry is the problem. If thousands of workers such as journalists and those working in the media and film industries, as well as parts of the public sector, are going into these types of situations, we are heading for difficulty unless the current position is changed. It has reached a point that workers and employers are looking for flexibility in regard to working a 20-hour week or 25-hour week if that suits and to the absolute extreme whereby the only option many workers are given is a self-employed contract. That is the problem. The CIF and IBEC must be able to say whether that is right or wrong. If they think it wrong, they should instruct and encourage employers to recruit directly, rather than utilising self-employment contracts.

There was an interesting moment when Mr. O'Connell was trying to describe what happened over a period of time and why we have more people self-employed in the industry. He referred to a severe recession and stated that workers became more reliant on themselves and went down the route of seeking jobs on a self-employed basis and that we now have an industry based on that system. Let us be honest. The usage of the flexible definition of what is a worker or an employee goes back much further than that. The notion that workers no longer have a set of entrenched rights regarding their lives and expectations has probably been around since the 1980s.

However, even if I accept what was stated regarding the recession and that construction workers had to redefine themselves because they had to work for themselves more and find odd jobs here, there and yon, why has the phenomenon of self-employment reached its current level at a time when the building industry is booming, building companies are making massive profits and one sees cranes all over the Dublin skyline? Some building companies have recently been involved in very controversial circumstances related to the national children's hospital, etc., and some are notorious for engaging people on self-employed contracts. I believe that self-employment is at such a high level because workers will not get a job unless they declare themselves self-employed contractors. It is the only way they will get a job. Some people who work in these Houses are in a similar situation. Regardless of whether it has happened by default, it has happened. The problem is that the prevailing attitude is there is nothing to see here and we should all move on. However, many workers can only get a job in their chosen field if they declare or define themselves to be independent contractors. As a result, they get less pay and have worse conditions and more insecurity. Workers checking out their entitlements and going to the Workplace Relations Commission or the scope section may mean that they lose their job because they are no longer of use to the contractor. We need to take this seriously and stop saying there is nothing to see. This is a real issue.

The witnesses will have an opportunity to make concluding remarks. Before doing so, do they wish to respond to any of the points made by the Deputies?

Mr. Conor O'Connell

Very briefly, I point out to Deputy Smith that we are not saying, "There is nothing to see here. Move along." We are saying that there has been significant change in the industry since the 1980s. There is greater specialisation and more modern technology and the need to employ certain grades of skilled staff on a continuous basis has diminished. That is a fact. She referred to the boom. There is a boom in Dublin in the construction sector, but that is not the case outside the capital.

What about Cork?

Mr. Conor O'Connell

There is a small bit of a boom in Cork.

A small bit in Limerick, Cork and Galway. There is a boom.

Mr. Conor O'Connell

There are no working tower cranes in Limerick. I reiterate my point about the one-off housing sector.

The witnesses will now have an opportunity to make any concluding remarks.

Ms Rhona Murphy

On the point raised by Deputy Collins regarding how people are hired, the various reports referred to today indicate that the level of employment is rising. It is not the case that on leaving school or other education, a person walks into an employer's office and is offered an independent contract. In fact, such practices are very much in the minority. We know that from those reports. For the avoidance of doubt, we are not saying that false self-employment does not exist. Rather, we are saying that based on the independent studies we have, the issue is not as large as it is being presented to be, and that there are remedies there of which people may avail. Apart from Deputy Collins' example of the CIÉ worker who went to the scope section and got the correct outcome, I am not aware of examples of widespread bogus self-employment. The system is working when it is invoked. When inspections are made, money is recovered and people's employment status changed.

The IBEC position is that we have a framework in place. We may need more work on inspection and enforcement but, beyond that, tinkering with or making wholesale changes to the nature of a contract of employment could have many unintended consequences for businesses as well as for people who left employment to set up a business and who find themselves unwittingly captured by some of the legislation that might come out of that process.

We will ensure that the legislation does not unwittingly capture them.

Ms Jean Winters

We are supportive of any mechanisms and measures to ensure compliance with the regulations. Deputy Joan Collins set out the example of a worker who was just told that the only option was to go as a self-employed person. We would absolutely not support any kind of a situation such as that; it is clearly wrong because the regulations are in place. Someone can either be classified as a self-employed person or he or she should be regarded as directly employed. We are very supportive of all of the mechanisms that are in place. There are sufficient mechanisms to ensure compliance and we would support any enhanced measures to make sure that there are inspectors out there on the ground ensuring that the various regulations are adhered to.

I thank our guests for attending and for their submissions. The committee is working to look at bogus self-employment. It is not just the issue of revenue lost to the State, it is also the various entitlements lost to a potential employee - be it holiday pay, sick pay, etc. - and it will become more important in the future as auto-enrolment in the context of pensions will come into play and whereby employers will have a contribution to make.

I want to make one observation on something Ms Winters said. She was referring to the industry generally and stated that somebody could be abusing the system and gaining an unfair advantage over others in a sector. That is a very important point and it is very well made. I was surprised when Deputy Carey indicated that the industry organisations know that the level of self-employment is higher in certain sectors, whether it is couriers, construction or whatever. While the CSO publishes data, it would probably be worthwhile for the industry bodies themselves to break that data down by company and by sector. For example, how many of the 30,000 are blocklayers, labourers and so forth? The risk would then become more apparent. It would be useful for the industry organisations to look at that.

I again thank our guests for attending. Their opening statements and their answers to the questions have been very helpful and informative.

The joint committee adjourned at 11.55 a.m. until 12 noon on Tuesday, 2 April 2019.