Vol. 495 No. 7
534 Mr. R. Bruton asked the Minister for Social, Community and Family Affairs if he will report on the action taken by his Department to deal with builders who force workers to go into the C45 system instead of employing them under the normal PAYE and PRSI system; the extent of this problem; and if builders who have these practices are entitled to tender for publicly funded jobs. [21019/98]
My Department is aware, from discussions and correspondence with representative groups in the construction industry, of allegations that some persons are being forced into involuntary self-employment to obtain work. It is not possible to establish the extent to which these allegations are correct.
The C45 system is designed for persons who are self-employed sub-contractors. Under this system principals and sub-contractors creating self-employed contractual arrangements must both sign a declaration that the contract is a self-employment contract.
The fact, however, that an agreement is made between a contractor and a sub-contractor to operate the C45 system does not automatically mean that a contract for service situation applies. Ultimately, it is a matter for deciding officers in my Department and, if necessary, the social welfare appeals office to decide whether a self-employment situation exists, or whether an individual is employed under a contract of service and hence fully insurable under the social insurance system.
My Department is in ongoing contact with the Revenue Commissioners with a view to taking whatever additional measures are necessary to ensure that contractors and sub-contractors in the construction industry fully comply with their legal obligations. My Department's inspectors make some 7,500 visits each year to employers, many in the construction industry, to ensure that they are complying with legal obligations under social welfare law. One aspect of these inspections is to ensure that the correct class of PRSI is applied to persons found in employment.
My Department has also taken steps to ensure people working in the construction industry are aware of the differences between employment and self-employment. In this connection a guide, jointly prepared by my Department and the Revenue Commissioners, has recently been made available to outline the distinguishing features of each type of arrangement and the importance of the issue as far as social welfare entitlements are concerned.
