That leave be granted to introduce a Bill entitled an Act to disincentivise employers from entering into bogus contracts for services, to prohibit dismissals in order to induce workers to enter into contracts for services, to prohibit misrepresenting employment as a contract for services, to prohibit false inducements for contract for services, to provide for a right to redress for workers party to a bogus contract for services and for claims to be heard under the Workplace Relations Act 2015, to amend the Unfair Dismissals Act, 1977 and the Workplace Relations Act 2015 and to provide for related matters.
The current set-up for combatting this practice is totally inadequate and I suspect deliberately so. The Government would like to prettify the phenomenon as the 21st century gig economy where all the young generation gets to be entrepreneurs. The reality is the big employers are laughing all the way to the bank as they get away without paying not just payroll taxes but holiday pay, the minimum wage and statutory maternity leave. Where sectoral rates exist they can avoid them and all that goes with them, such as sick pay, pensions and other premia.
This practice is mostly associated with the construction industry, but it goes way beyond it. Approximately 200,000 people are self-employed with no employees, although this, of course, includes authentically self-employed people. Of these, 36,000 are part time and the biggest jump took place in this category during the crisis years from 2008 and 2009.
Estimates vary from 30,000 to 60,000 in the construction trade. High profile cases beyond construction include Deliveroo and Uber, and Ryanair in its dealings with pilots. Estimated losses to the Exchequer vary, but the cumulative losses of revenue from pay related social insurance, PRSI, pay as you earn, PAYE, and universal social charge, USC, in the course of the crisis to date clearly run into billions of euro.
The freelance or gig economy part-timer is basically paid by task. This is a revival of 19th century-style piece work. They, not the employer, carry 100% of the risk for any momentary slackening of customer demand that would otherwise feature in a normal working week in a directly employed situation. The Government and the State are culpable too. Besides the obvious pro-employer bias of the political establishment, the reality is that low bids on State construction contracts are often predicated on bogus self-employment. That is to say, bids are so low that they would be impossible to deliver upon at a profit for the primary contractor if they were to pay the proper sectoral rates.
The report on this practice by the Department of Employment Affairs and Social Protection was totally inadequate. In summary, this report, which was almost two years overdue, focused narrowly on social insurance evasion and not at all on the other negative consequences. The two recommendations in the report were for the Department's scope section to publicise its existence further to elicit more complaints and for social insurance contributions to be equalised between the directly employed and the self-employed. The latter suggestion is a joke as it puts the cost entirely onto the worker. In any event, the Minister indicated that she would not proceed with it.
Our Bill hands the initiative to the worker or to his or her union to make a complaint to the Workplace Relations Commission, WRC. They may complain either on the basis that they are in situ in a bogus self-employment arrangement or that they were dismissed for refusing to enter into such an arrangement. The person adjudicating at the WRC must have regard for any combination of 19 different listed characteristics of bogus self-employment and judge on the balance of probabilities. Awards in favour of employees include mandating that they are engaged on a PAYE basis, with the statutory and sectoral conditions that go with it. Furthermore, any outstanding wages, including holiday pay and outstanding PAYE, USC and PRSI must be settled by the employer.
Rather than leaving the investigation of complaints of bogus self-employment to the whims of Revenue Commissioners or the Department of Employment Affairs and Social Protection scope section, which has been the unsatisfactory position to date, this Bill gives the initiative to workers and the trade union movement. It allows them to force the hearing of cases at the WRC and equips those adjudicating over cases with a wide range of descriptions of what could constitute a finding of bogus self-employment. While it is no substitute for trade union organisation on the ground, it aims to give workers a powerful tool to help root out this particular abuse.