Tuesday, 2 July 2019

Questions (638, 639, 640)

John Brady

Question:

638. Deputy John Brady asked the Minister for Employment Affairs and Social Protection the number of cases brought to the scope section; the number of these cases which were investigated; the number of these cases in which fault was found for each of the years 2017, 2018 and to date in 2019; and if she will make a statement on the matter. [27677/19]

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John Brady

Question:

639. Deputy John Brady asked the Minister for Employment Affairs and Social Protection the length of time it takes for a decision to be made following an investigation being carried out by the scope section. [27678/19]

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John Brady

Question:

640. Deputy John Brady asked the Minister for Employment Affairs and Social Protection the number of ongoing cases being investigated by the scope section; the average time these cases have been ongoing; and if she will make a statement on the matter. [27679/19]

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Written answers (Question to Employment)

I propose to take Questions Nos. 638 to 640, inclusive, together.

I am committed to address the issue of false self-employment, and I have put in train a series of measures to deter, detect and tackle it. A key element is the increased focus by Social Welfare Inspectors on the enforcement of PRSI compliance obligations. Inspectors nationwide have commenced a campaign of employer inspections and a new unit is being established to focus specifically on the area of false self-employment.

Deliberate mis-classification of employment status is an offence with penalties on prosecution of up to three years imprisonment and/or fines up to €13,000 or twice the amount denied to the Social Insurance Fund as a result of the mis-classification, whichever amount is greater. The new unit will ensure that cases of fraudulent mis-classification of employment status are prosecuted and that the full force of penalties are applied. To this end, led by my Department, the 2007 Code of Practice on Employment Status will reach the end of a comprehensive revision process next month. This Code will be a vital tool for employers and employees alike so they can be clear when a worker is genuinely self-employed. This document will be circulated to ICTU and IBEC for their input before it is published. In addition, Heads of Bill have already been drafted in order to place the revised Code on a statutory footing later this year.

The question of whether a worker is employed or self-employed is not always a simple one. The Courts have repeatedly stated that a decision must be made based on the specific facts of each case, having regard to key tests such as the level of control a would-be employer has over the worker and the level of obligation they have towards each other.

My strong view is that this is a far better mechanism than trying to capture in legislation a definition that can never be black and white.

I have instructed my officials to also explore a range of legislative proposals to complement the increased inspection work that will be key to the long term success of this project. These proposals include anti-penalisation provisions for workers who will be able to take a claim to the WRC if they are victimised by an employer for raising a query regarding their status; and an increase in penalties for employers who deliberately mis-classify employees as being self-employed.

Most of the cases referred to Scope Section cover matters such as modified classes of PRSI for civil and public servants, family employments and the insurability of Directors. However, I understand the Deputy’s questions refer primarily to cases where the insurability of a worker as being either employed or self-employed is to be determined and, in particular, where false self-employment has been found.

Of all the cases referred to Scope, the number involving the mis-classification of an employee as self-employed constitute a small proportion. A breakdown of cases is not available pre 2018 as the historic database in use in Scope did not allow this categorisation.

Number of all cases referred for Scope decision

Year

All cases referred

All cases decisions made

Employed/self-employeddecisions made

2017

1,473

1,065

Not available

2018

2,067

1,339

73

2019 (to end May)

879

575

59

The following statistics show the number of such decisions made and the length of time within which the decisions were made:

Number of cases in sub-category of Employed/Self-Employed (Decision Made)

Decision made within

2018

2019 (to end May)

Under 3 months

33

31

3-6 months

14

9

6-12 months

23

16

Over 12 months

3

3

Total decisions made

73

59

These cases do not always involve a deliberate fraudulent mis-classification of a worker as self-employed. Sometimes it happens that both employer and employee are genuinely mistaken in their approach and are happy to correct the position once the Department’s officials make a determination.

There are currently approximately 142 cases on hands in Scope Section that involve employee/self-employed investigations. The duration of these investigations is will very from case to case, depending on the issues involved. Most of these cases are complex and require referral to a Social Welfare Inspector who will interview the relevant parties at local level and send his/her report on the matter back to Scope Section.

I hope this clarifies matters for the Deputy.