That Dáil Éireann shall take note of the Report of the Joint Committee on Social Protection, Community and Rural Development and the Islands entitled "Examination of Bogus Self Employment", copies of which were laid before Dáil Éireann on 16th June, 2021.
I thank the Ceann Comhairle for the opportunity to debate this motion on the report of the joint committee on bogus self-employment. I will share my time with Deputy Ó Cathasaigh.
I would like to thank Members for their attendance this evening and committee members for their work that culminated in the publication of this report. I would like to specifically thank Deputy Joan Collins who acted as the committee’s rapporteur and our committee’s policy adviser, Mr. Jack Savage, whose assistance to the committee on this report was invaluable. In June 2021, the committee published its final report entitled, Examination of Bogus Self-Employment. Bogus self-employment is the practice where a worker who is acting in the capacity of an employee is classified, often at the request of the employer, as self-employed for PRSI purposes. The extent of bogus self-employment is largely unknown. However, several estimates indicate that bogus self-employment results in significant losses to the Exchequer through lost employer PRSI contributions. During its engagements the committee heard that some evidence shows that activities around bogus self-employment have cost the Exchequer approximately €600 million in recent times.
Another area regarding the code of practice that was considered by the committee was the role of platform working. This is a relatively new way of working where a contract for service is awarded through a third-party digital platform. The committee had concerns that this type of work was not fully accounted for in the code of practice due to its significant growth in recent years. The committee welcomed the response from the Department that these workers were not excluded from the code of practice. However, as new ways of working are continuously developed, the committee is of the view that the code of practice must be reviewed on a regular basis to ensure that it continues to be applicable to all those who operate in the workforce.
The committee’s report also acknowledges the difficulties faced by those who are wrongly classified as self-employed when it comes to accessing social welfare benefits that they would be entitled to if an employer’s PRSI contribution was contributed to their record. The Department of Social Protection informed the committee that self-employed class S contributors are not able to receive illness benefit, carer’s benefit, health and safety benefit and occupational injuries benefits. Other consequences faced by those who are registered as self-employed while working in an employee capacity include a lack of access to union representation and collective bargaining. These issues were repeatedly highlighted throughout the committee’s consideration of the matter.
Specifically, the committee issued 12 recommendations in its report focusing on a number of areas that can be strengthened to ensure that bogus self-employment is not able to continue. First, the committee recommended that the code of practice for determining employment or self-employment status of individuals is updated and placed on a statutory footing. The committee welcomes the response from the Minister for Social Protection who published the updated code of practice last year and urges her to place the code of practice on a statutory footing, as was previously committed to, by the end of the current Oireachtas term.
The committee also recommended that the Minister, in consultation with the relevant stakeholders, would investigate whether more evidence would need to be provided by companies engaging with contractors to prove that the individual contracted as a self-employed worker is not, if fact, operating in an employee capacity. In response to the committee the Minister explained that this would create an additional bureaucratic burden on both companies and individuals. However, the committee is still of the opinion that placing the burden on companies to prove that an individual is self-employed, rather than a person classified as self-employed trying to assert that they are an employee would be a favourable outcome for workers.
The committee also examined the issue of targeted inspections that have taken place in specific sectors of the economy to identify instances of bogus self-employment. This recommendation was designed for further interaction between the Department of Social Protection and the Office of the Revenue Commissioners to ensure consistent levels of investigations are carried out each year.
The committee acknowledges the work of the joint investigation unit based in Revenue and the work of the employer status investigation unit, ESIU, that was established within the Department of Social Protection in 2019. The committee notes that the ESIU is part of a suite of measures used by the Department to ensure the correct classification of workers for PRSI reasons. Another important section within the Department that investigates the issue of employment status is the scope section. The committee notes and wishes to make all those watching and listening aware that every worker who believes they should be registered as an employee due to their work conditions has the right to make an application to this section to ensure his or her employment status is correct.
Every worker can avail of this and each worker is entitled to an individual investigation based on the merits of his or her own case. This was confirmed to the committee by the Minister, the Department, and the social welfare appeals office. However, the committee also received information that some scope cases have carried on for far too long and recommended that decisions be reached within six months. It was confirmed to the committee that the majority of decisions are provided within six months of application and the committee remains of the opinion that this should be the maximum timeframe for such cases.
While the ability to make an application to the scope unit is beneficial, the committee heard from major organisations that many workers are deterred from approaching the scope unit for fear of reprisal from employers. In this instance the committee recommended that the Minister for Social Protection work with the Minister for Enterprise, Trade and Employment to develop stronger anti-victimisation laws that protect workers from such actions. In response, the committee was informed that work was continuing between both Departments for the development of such legislation. However, the committee was also informed that the publication of such legislation would depend on the identification of a suitable legislative vehicle. Tonight, I ask the Ministers of State to provide an update on the development of this legislation and whether an appropriate legislative vehicle has been identified. Similarly, the committee recommended that harsher penalties be applied to employers who are found to have wilfully misclassified their employees as self-employed. Again, the committee was informed that this was being developed subject to the identification of a suitable legislative vehicle and I also ask the Ministers of State for an update on the progress on this recommendation.
Before I conclude I express my thanks, as Cathaoirleach of the joint committee, to the Minister and to the individuals and organisations who informed the committee’s consideration of this matter of bogus self-employment. I now pass over now to my colleague, the Leas-Chathaoirleach of the committee, Deputy Ó Cathasaigh.