I am on record as stating very clearly that I am committed to tackling the issue of false self-employment. I believe the deliberate mis-classification of a worker as a self-employed contractor, in a situation where they are actually working as an employee, is wrong. It is wrong for three reasons.
Firstly, it denies the worker full protection under the Social Welfare Act, which means he or she is deprived of entitlements such as short-term illness and disability benefits.
Secondly, it deprives the worker of protection under labour law which means the a worker is left without any redress if they are unfairly dismissed, made redundant, or are not paid minimum wage rates, for example.
Thirdly, this form of non-compliance by employers deprives all taxpayers in the form of reduced returns to the Social Insurance Fund.
I have assigned my officials the task of modernising the Code of Practice on employment status. This is a vital tool for employers and employees so they can be clear when a worker is genuinely self-employed or alternatively when they should be recorded as an employee under full PRSI. A new manual – the Guidance on Employment Status – is almost finalised and I have said that I will be circulating it to ICTU and IBEC before it is published to get their input.
The new Guidance will be put on a statutory footing, to ensure it becomes central to the decision-making process in employment status cases.
I believe that enforcement of PRSI compliance is paramount and I want strong enforcement activity to complement the new Guidance provisions. My Department's inspectors have commenced a campaign of increasing the level of employer inspections nationwide. I have established a new Unit of inspectors, specifically trained and dedicated to the detection and tackling of false self-employment in particular.
Anyone who has a query or concern about how their employment has been classified by an employer to contact Scope Section of my Department. Scope Section will commence an investigation, which can involve referral of the matter out to a Social Welfare Inspector, and ultimately decide on the appropriate employment status.
A good deal of progress has been made by my officials in developing a number of legislative proposals that strengthen the protections for workers in situations of false self-employment. These include providing 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. I also wish to increase penalties for employers who deliberately mis-classify employees as self-employed.
There is no easy solution to the issue of deciding employment status – if there were, the Courts would have ruled on it years ago. There are complex legal aspects to it and each case rests on its own facts. I also need to be mindful of the constitutional rights of employers and workers to manage their business and freely choose their employment status.
Work is ongoing to finalise the Guidance document and the legislative proposals and I hope to progress these as soon as possible.
I am advised that case involving an airline was investigated and decided upon and it is currently on appeal with the Social Welfare Appeals Office. It would therefore not be appropriate for me to comment on the likely outcome of this case.
I hope this clarifies the matter for the Deputy.