Dáil Éireann díospóireacht -
Thursday, 27 Jan 2022

Vol. 1017 No. 1

Report on Bogus Self-Employment: Motion

Deputy Denis Naughten

I move:

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.

Deputy Marc Ó Cathasaigh

I thank the committee Chairman, Deputy Naughten, who agreed to share time with me this evening. I thank him also for taking on the job of putting this report together. Much of the preparatory work was undertaken in the Thirty-second Dáil and would have been lost but for the decision made by Deputy Naughten to use our Covid time, when we could do little else, to bring together the work and form a report from it. I also acknowledge the huge work undertaken by Deputy Joan Collins, who has unfortunately stepped out of the Chamber, and policy adviser Jack Savage in putting it together. It was a good use of our committee time when there was little else we could have done.

I thank the committee for including recommendations on platform working. It is those two particular recommendations I wish to focus on. Platform working is something we inaccurately refer to as the gig economy. It is a real example of digital disruption of the way we organise our work patterns. We are struggling to define it, much less catch up with it in terms of legislation and employment rights. Eurofound, the European Foundation for the Improvement of Living and Working Conditions, gives the most plain-language definition I have found of it, namely, the "matching of supply and demand for paid labour through an online platform". Deliveroo is the example that springs most readily to mind for most people. It is an excellent example of what is more correctly called on-location platform-determined work. However, that is only one of five forms of platform work outlined in the Eurofound policy brief on the subject. We have seen this type of work explode over the course of the pandemic and it has become much more visible as well. I stress that it is not necessarily a bad thing. I have been engaging with many Deliveroo riders and the feedback is they do the work because it suits them to do it. They may be in education, have other jobs or commitments and they like the flexibility. However, they have concerns from the perspective of individual workers and I have broader concerns around employment rights and social protection aspects of this.

We are not alone in struggling to keep pace with the rate of change in these traditional categorisations of employer, employee and self-employed. The EU directive on transparent and predictable working conditions makes a stab at it and I know of no member state that has got it right in terms of adequately defining the relationship between what Eurofound calls the triangular relationship between platform, worker and client. Let us investigate this a little. Where does the responsibility for safety lie? If a rider's bike is defective, his or her brakes are not working properly or the e-bike does not conform to a correct specification, who is responsible? Where do we go if the rider has a collision with a pedestrian? If a rider is attacked - and there have been notable examples of this happening over the course of the pandemic - where does the duty of care lie? A recurring theme when talking to people engaging in platform work, not just of the type I describe but more broadly, is the algorithm. How does any given platform dole out the work and under what criteria? Are the criteria visible or invisible to the worker? What level of transparency is there? It is not always clear and obvious and questions can arise from that as well. If speed of delivery is one of the criteria, does that encourage or reward risk-taking or rule-breaking behaviour? Would you be tempted to run red lights if you got more delivery jobs? I acknowledge SIPTU has been doing very important work around trying to organise riders but the very nature of the work makes it difficult. The riders are working different hours. They are often of different nationalities and may not share a common language. The work is also inherently competitive in nature. Riders are competing against others for jobs and it kind of militates against collective bargaining. All this makes it hard for the workers to come together and advocate and we all know workers are stronger when they operate as a collective.

Beyond that is the wider lens of taxation and social protection. How and where is a platform worker's income being taxed? Probably more important for me is the question of how and where are the platforms' profits being taxed. This returns to the more general issues around bogus self-employment, PRSI, and the social protection benefits a worker could or should be entitled to in respect of their social insurance contributions. These are difficult and really complex issues to answer. As I said, we are not the only country to struggle. There is no EU member state that has adequately answered these questions. However, it is going to become increasingly important as we see more and more digital disruption in the labour force.

Recommendations Nos. 9 and 10 relate to platform working. They also refer to the update of the code of practice for determining employment status. I have reviewed the update on it. It is section 9.4 of the revised code that deals with "Workers in the digital/gig economy". As I have already adverted to, that is actually inaccurate language. The section that deals with platform working runs to four paragraphs and refers back to the idea of there being a binary status whereby these workers can either be resolved into "employed" or "self-employed". Increasingly, we are seeing that is a grey area. I would like the Ministers of State to comment in their contributions on whether we are adequately dealing with it. If we are looking to put this code of practice on a statutory footing as Deputy Naughten suggested, are we going to be able to cope with platform working and the new challenges it brings? I refer not just to the visible type like Deliveroo but also the much less visible type of platform working, such as Clickworker, for example.

I thank the Ceann Comhairle for allowing this report to be debated. There are numerous committees in the Oireachtas producing good work and very good reports that are often left on a shelf or to wither on the vine. It is a very useful use of Dáil time to be able to draw out from the report some of the more important aspects and threads. I very much welcome the opportunity and look forward to the rest of the debate.

Minister of State at the Department of Social Protection (Deputy Damien English)

I thank Deputies Naughten, Ó Cathasaigh and the members of the Oireachtas Joint Committee on Social Protection, Community and Rural Development and the Islands for their work on this and for bringing forward this motion based on their report. I really appreciate the work they did in gathering material and information from the relevant stakeholders to produce this report. As was outlined, this report builds on the work carried out by the previous Dáil and the previous committee. It is great that work did not go to waste. I acknowledge that Deputy Joan Collins was also involved in this too. She was mentioned in her absence by her colleagues earlier. I compliment all those involved for their work in this space on my own behalf and on that of the Minister of State, Deputy Joe O'Brien, and the Minister for Social Protection, Deputy Humphreys. We look forward to working with them on this with the new group I will be chairing in this space.

I also want to thank the committee for the opportunity afforded to the Minister for Social Protection and her Department officials to engage with it during this work, as we were able to provide written input over a number of stages of the drafting process. Senior officials of the Department also had very valuable interactions with the previous committee during its programme of work. By way of further acknowledgement, I note that the Secretary General of the Department of Social Protection commended the report to members of the Committee of Public Accounts at his recent appearance before it.

I am very glad, therefore, to welcome this report and the opportunity to note its contents here today, in addition to having this discussion and debate. I again thank Deputy Denis Naughten and the Ceann Comhairle for facilitating that.

The committee's report deals with a very important issue, one that concerns me as Minister of State in the Departments of Enterprise, Trade and Employment and Social Protection. It is also very important to the Tánaiste, the Minister for Social Protection, Deputy Humphreys, the Minister of State at the Department of Rural and Community Development, Deputy Joe O'Brien, and our officials. It is something we have worked on over a long number of years. We believe that the deliberate misclassification of a worker as a self-employed contractor in a situation where they are actually working as an employee is wrong.

Ensuring a worker is correctly classified is very important. The classification of a worker as an employee can act as his or her passport to a collection of rights and employment protections, which are something we speak quite a lot about in this House. They are very important, certainly as we move out of Covid-19 and into a jobs-led recovery. We have to make sure that those protections are there and are honoured. These can come in the form of key protections under unfair dismissal, the rights to maternity, paternity and parental leave, or access to welfare benefits. I cannot stress enough how important these rights are, which many can take for granted. Misclassification of a worker's employment status undermines these rights and it can also deny the State valuable revenue from PRSI. As the total PRSI liability for self-employed workers is lower than it is for employees, there will always be those who try to present an employment relationship as self-employment. Accordingly, we are determined to continue with the progress we have made in tackling the issue of false self-employment where it occurs.

The committee's report contains 13 recommendations in this regard. Six of these have already been completed and four are under way. Some elements of this report cross departmental boundaries and will inform our future work. We would all agree that employers should not be permitted to avoid the PRSI liability involved in engaging workers on an employee basis by unilaterally declaring them to be self-employed contractors. However, I believe, and I want to state on the record, that the vast majority of our employers do not do that and do not wish to deprive their workers of their rights and protections. That is borne out by the fact that, while false self-employment does exist, there is no evidence to suggest it is rife in the vast majority of Irish workplaces or that it is a significantly growing phenomenon. Figures from the Central Statistics Office, CSO, show that the number of self-employed workers as a proportion of all workers in Ireland has remained largely stable for more than 20 years. That said, any instance of false self-employment is not tolerable and we want to deal with it. As a consequence, it is a matter that this Government takes very seriously and the reason we have embarked on so many initiatives to deal with it.

In this respect, a specialised team of social welfare inspectors, called the employment status investigation unit, was established in the Department of Social Protection and additional decision support resources were assigned to that unit. The same unit networks with inspector units throughout the Department of Social Protection, as well as the Workplace Relations Commission and Revenue, to ensure its work draws on existing resources to the maximum extent possible. This unit has been carrying out a programme of targeted investigations of employers and contractors. To date, it has reviewed more than 500 employers and their contractors across various sectors of the economy. Some 300 of these cases have been targeted for in-depth employment status investigations. To date, PRSI arrears of more than €600,000 have been assessed.

The committee recommended that a standard definition of "employee" and "worker" is developed and applied in legislation. Using a number of powers and functions under the Social Welfare Consolidation Act 2005, deciding officers in the Department of Social Protection can make determinations in relation to a person's employment status. In other words, they can decide whether a worker is or was an employee or self-employed. The law makes a distinction between contracts of service where an individual is employed and contracts for service where an individual is not employed. From that decision flows the appropriate categorisation for PRSI purposes, the most common being class A for an employee and class S for a self-employed person.

There is no set test in law for an employment relationship to exist. Self-employed people are usually identified by the fact that they are in business for themselves and provide a service to multiple clients. They are generally more independent workers than employees and they have far greater control over how and when to deliver a service. Deciding officers from the Department of Social Protection are guided by their own statutory powers and the case law that has evolved in the courts over many decades. It is worth noting that legislation is already in place that makes it illegal not to pay the correct class of PRSI, with associated sanctions and penalties.

This brings me to the recommendations regarding the code of practice on determining employment status. This guidance for departmental deciding officers, and in fact for anyone who wishes to understand the distinction between the different statuses of employment, has been revised. The Minister for Social Protection relaunched the code last summer following a review and overhaul conducted by an interdepartmental working group consisting of the Department of Social Protection, Revenue and the Workplace Relations Commission. This guidance does not create new law. It reflects the up-to-date position as it has emerged in the courts and in legislation. It sets out the key factors that have been found by the courts to determine whether a person is employed or self-employed. In this regard, the courts have found that the determination as to the appropriate insurability classification is a complex matter and must be arrived at by looking at what a person actually does, the way in which it is done and the terms and conditions under which the person is engaged, be they written, verbal or implied. Steps are under way to place this code on a statutory footing.

When arriving at a determination on the employment status of an individual, a deciding officer will typically have to weigh up a number of factors. Of particular importance are features in the relationship between the worker and the employer or contractor and whether this relationship carries the characteristics of employment. For example, the degree of control exercised over the worker by the other contracting party is quite significant, as is the control over when, how, and where the service is provided. Cases that involve decisions on employment status may arise from requests from employers, employees, employer representative groups, employee representative groups, the Department's own social welfare inspectors, departmental officials working in social welfare scheme areas, or the Revenue Commissioners. In every case, the decision is an individual one and may be appealed to the social welfare appeals office. I assure everyone in the House that no individual worker who seeks a decision from the Department of Social Protection's scope section is turned away. There are no group decisions, but only individual decisions. Each case turns on its own facts and the law is applied without fear or favour to those facts.

The committee's report also highlights the importance of data and statistics and I agree with this observation. From 1 January 2021, a new European regulation on social surveys, Regulation 2019/1700, became law. It affects a number of surveys, the most significant being the labour force survey, LFS. These changes will provide Departments with new statistical data on self-employed individuals. Although I understand that the new CSO data will not be available until later this year, it should assist in targeting our employment status investigations and inspections to ensure compliance into the future.

There are a number of recommendations contained in the report that we cannot commit to or agree to just yet. The most important of these is where the committee has suggested that greater documentary evidence should be provided by new businesses to prove they are in fact self-employed. According to the CSO, there are approximately 340,000 self-employed individuals in Ireland. In this regard, it is essential that we do not lose sight of the fact that legitimate self-employment is a key part of the labour market. In addition, we must continue to support genuine entrepreneurs to set up and succeed in their own businesses, particularly as they are key engines of job creation. Therefore, any proposal to increase documentary requirements would require careful consideration. It would have to be clear that the imposition of the additional bureaucratic burden would provide a tangible solution to the issue of false self-employment, but I am happy to work with Members on that. We discuss red tape for SMEs a lot in committees and across the Houses. I understand that the majority of people in the Houses are of the view that we should keep red tape for SMEs to a minimum in order to support them in their work. That is a concern I would have about this piece and this recommendation, but I am happy to tease it through and look at it further with Members.

I am very optimistic about a new working group, announced in December, which is being established by the Tánaiste to examine issues around false self-employment in Ireland. This group will have representation from the Departments of Enterprise, Trade and Employment and Social Protection, alongside Revenue, as well as participation from the Irish Congress of Trade Unions, IBEC, the Construction Industry Federation and Irish Small and Medium Employers. I will chair this new group and all options will be on the table to streamline and improve the processes involved in deciding employment status, including factors affecting specific sectors such as platform work, which is often referred to as gig work, rightly or wrongly, as Deputy Ó Cathasaigh said. It is something we will focus on a lot as it often comes across our desks. We are very much involved in discussions with our European colleagues regarding this issue and there will also be a focus on it in our work programme during the French presidency of the Council of the European Union. We are happy to engage more with this committee and Members on that.

This group that I will chair will build on the work conducted by the committee and examine the issues around false self-employment in Ireland. I want to be very clear that I will be very happy to work with Members on that. I will be happy to engage on behalf of my Department with any interested Deputies or colleagues across the different committees who want to work on it. I observe that the Minister of State, Deputy Joe O'Brien, will be involved in this work as well.

In conclusion, I once again thank the Chair and members of the Committee for their work on the production of the report, in addition to the members of previous committees. I have no doubt that its contents will be keenly considered by the new working group to be inaugurated in the coming weeks. I hope to be able to communicate regarding a start date for that very soon.

Deputy Matt Carthy

I commend the committee chaired by Deputy Naughten, the previous committee of the 32nd Dáil which carried out quite an amount of research and the current committee for producing a very substantive 72-page report. I commend my party colleagues, Deputies Kerrane and Paul Donnelly, who are members of the current committee and contributed to this work. I commend all members of the committee, including, in particular, Deputy Joan Collins, who acted as rapporteur. I commend the 12 recommendations of the report.

Bogus self-employment cheats us all. Unfortunately, we have never seen a Minister stand with that particular phrase for a photo opportunity. I have often noted that the best example of populism in modern Irish politics was the disgraceful campaign that tried to imply there was widespread fraud among people claiming social welfare payments. There is fraud and it should be tackled but it is, I would guess, only a fraction of what is impacted as a result of bogus self-employment. The fraud or the overpayments that take place within social welfare happen in the here and now. Fraud that takes place in bogus self-employment has an impact on the here and now but it could be still having an impact in decades to come. At a time when this House is debating whether the Government parties can get away with increasing the pension age, as was their previous stated intention, money from the PRSI pot is being lost every year and will continue to be lost for some time.

The workers who are at the tail end of this practice are denied employment rights, surety of tenure and basic entitlements and the Exchequer is denied ring-fenced funding for pensions, sick pay, unemployment benefits and so on. If those workers are unemployed or need assistance for a period, every other taxpayer has to pick up the slack while a few companies - I accept it is probably only a few companies - pocket the difference. The difficulty is that we are unsure as to how extensive this practice is. One ICTU report estimated that between 2007 and 2014 up to €640 million was lost to the Irish taxpayer as a result of this practice.

The committee report makes a number of key recommendations, including that the code of practice that determines self-employment versus employment be updated. According to the response given by the Minister of State, Deputy English, that has been carried out. However, the Irish Congress of Trade Unions has described it as wholly inadequate because it does not have supporting legislation. The committee proposed what I believe is a very sensible and logical proposal, namely, that an advertisement campaign promoting the right to apply to have one's employment status adjudicated be rolled out. There is no evidence or suggestion in the Minister of State's response that that is something that will be given the type of resources that previous campaigns were given. Crucially, the committee recommended that the Department of Social Protection and Revenue together develop an inspections target and regime. In my own engagements with Revenue and the Department on this matter, they consistently passed the buck as to who is responsible for any given aspect. On the ten other recommendations I have heard very little from the Minister of State that suggests an eagerness to implement them.

I am a member of the Committee of Public Accounts. The Minister of State will be aware that that committee has also dedicated a significant amount of time to this matter because of the overarching aspect of this issue but also because of the significant concern about Exchequer funds being lost. The Committee of Public Accounts also produced a report on the matter, specifically on what was essentially a back-room deal that affected the courier sector, which deal was done in the 1990s and is still having repercussions. It is a considerable issue for the Committee of Public Accounts to get either the Department of Social Protection or Revenue to acknowledge that this is an issue, let alone the extent or scale of it.

Our State broadcaster, RTÉ, was on the verge of misleading the Committee of Public Accounts in regard to its employment prospects. It took four members of the committee asking a representative of RTÉ a question in regard to its settlements with Revenue before RTÉ finally acknowledged to the committee that it had reached a financial settlement with Revenue. It took a number of weeks of deliberations and correspondence with the Committee of Public Accounts to find out that RTÉ had paid €1.22 million to Revenue. The scary fact is that much more in costs are to come, perhaps, with Revenue but certainly with the Department of Social Protection and with the staff involved. We have no idea how much that will be. This is at a time when RTÉ is seeking more Government funding. As recently as last week at a meeting of the Committee of Public Accounts RTÉ would not commit to providing details even for those workers for whom it has reached settlements with Revenue in order that those workers would receive what they are owed in lost revenue and entitlements.

It also needs to be noted that in many cases the issue of bogus self-employment disproportionately affects vulnerable workers. I was also a member of the Special Committee on Covid-19 Response. At the height of the pandemic - the scariest part of the pandemic - that committee heard from representatives of meat plant workers, predominantly workers from eastern Europe who were supposedly independent contractors for a company in respect of which they registered in a different country, in some cases, that they had never been to. We had people from a particular country being brought into Ireland to operate a line in a meat factory and as far as our official structures were concerned they were working for companies that were based in an entirely different country. This is happening. It is, I fear, more widespread than is acknowledged. We found out that in many cases these individuals were living in unfit accommodation that was owned by their employers. In at least one case, when the scope section determined in favour of the worker, there was no follow-up in terms of an audit of the factory to find out whether there were other cases. Most would acknowledge that there were more cases.

This issue has been raised on quite a number of occasions by representatives of all political parties. I have heard Deputies and Senators raise it and, as we know, committees in the area of social protection in the previous Dáil and this Dáil have done great work in this area. The Committee of Public Accounts is to pursue this matter further. Most members of that committee accept that there could be substantial funding lost to the State. What we need now is action. I welcome the Minister of State's response and his remarks in regard to taking this issue seriously, but what we now need to see is the evidence of that. As I said, this is, potentially, an issue that will have a profound impact for our pension regime, our PRSI base and, particularly and most importantly in the short term, for the workers who are being exploited in the here and now.

An Ceann Comhairle

The next speaker is Deputy Joan Collins, whose enormous contribution to the compilation of this report has been already acknowledged.

Deputy Joan Collins

I was a member of the 32nd Dáil Joint Committee on Employment Affairs and Social Protection. I was the only member of that committee coming into this Dáil. As a member of the current committee, I requested that the committee continue with this report. It was a difficult one because when one is not dealing directly with the witnesses such as ICTU and all of the other groups, one is working off records of printed material. I thank my fellow members of the committee for their work in drawing up the report.

I also thank those who made submissions, especially those from the trade union movement who have first-hand knowledge of the scale of bogus self-employment and its effects on workers' pay and conditions. I also thank Mr. Martin McMahon who came before the committee. I will deal with that point later in my contribution.

Bogus self-employment is a serious and growing phenomenon not just in Ireland but internationally. It is an issue that is taken very seriously by the European Trade Union Confederation. It is a particular problem in construction but applies across the board, impacting pilots in airlines, journalists, university staff, staff in meat plants and the staff in RTÉ. Deputy Carthy mentioned the case of RTÉ. That situation was peculiar. It was not the scope section of the Department of Social Protection that investigated cases of bogus self-employment in RTÉ; it was RTÉ itself. That was out of order. It should not be the case.

Bogus self-employment also features in other areas of the economy, and the casualisation and precariousness of employment are being used to drive down wages and conditions and to reduce union membership and organisation. That point must be strongly made. It is driving down union membership and organisation. I believe the 13 recommendations in this report, if implemented, can make a difference in reducing bogus self-employment, in assisting workers in obtaining their rights as workers, and in assisting trade unions to organise and represent workers on a collective basis. The key question here is that the recommendation of the code of practice for determining self-employment status is updated and placed on a statutory footing, as the Chair of the committee has said already. That must happen without delay. The Minister raised this point last June and we are still waiting for it to be put on a statutory footing. In welcoming this recommendation, Unite the Union stated that the process of putting the code of practice on a statutory footing "must of necessity encompass the important legal principles set out in court judgments, many of which seem to be ignored in individual Appeals Panel decisions".

Recommendations Nos. 2, 3 and 4 deal with the overlapping of three different agencies, namely, the scope section of the Department of Social Protection, which is seriously under-resourced, the Workplace Relations Commission, and the newly established employment status investigation unit. This overlapping can cause significant delays in determining a case or an appeal. It would be much better if workers had access to one point of contact in making an appeal on their status. A key question which needs resolution is the need for a standard definition of the term "employee". This should be done in the code of practice and applied to all legislation dealing with employment. I will return to the point I wished to make about Mr. McMahon. He does not support the recommendations put forward in this report and he does not think a code of practice is the proper way to go. He thinks it should be based on case law and not a code of practice. However, the other submissions we received were strongly supportive of a code of practice and that is why the committee is recommending it.

As I said at the beginning of my contribution, this report and its recommendations can make a difference, if implemented. I was very disappointed with the Minister's letter of last September responding to the publication of the draft report in June. The Minister in effect rejected every single recommendation in the report. As to putting the updated code of practice on a statutory footing, the Minister stated she was currently considering ways to do it, subject to the availability of a suitable legislative vehicle in a busy legislative programme. That in no way strikes me as a strong commitment or speaks of a sense of urgency around the issue.

The Minister also made particular points about recommendation No. 12 in the report. That recommendation states:

The Committee recommends that the period for employers to pay backdated PRSI contributions that they previously avoided is increased from six months to six years. That would mean that the Workplace Relations Act 2015 be amended to allow adjudication officers and the Labour Court consider breaches of employment enactments for up to 6 years rather than the generally 6 months.

The Minister asked for clarification of that recommendation. Unite the Union argued that "the limitation periods applicable to breaches of employment law should be no less than those applicable to other areas of contract law which can have retrospection of up to six years". Unite made the point that employment law is different from contract law and that contract law allowed for six years. That would put major pressure on any employers that are trying to con the system through bogus self-employment. If such employers had to make a large payment, they would think twice about it.

It seems to me that neither the Minister nor leading officials in the Department regard bogus self-employment as a serious problem that needs urgent action and a change in approach. If that is the case, they are in denial. The Minister and the Department do not see bogus self-employment or the question of platform working as a serious issue. These are serious issues across Europe. I urge other Deputies to support the committee's report and to assist the committee members in maintaining pressure on the Government to ensure the implementation of the report. I noted the Minister's point about setting up a group to examine the question of bogus self-employment under the Department of Enterprise, Trade and Employment, and I would like to have an input into that. I do not think this is the end of the matter. It is only a part of the process. I know that in the future, when we get more information about bogus self-employment and how it is operating, we will have to look in more detail at how to protect workers from these practices.

Deputy Richard Boyd Barrett

Well done to the committee for producing this document on the important issue of bogus self-employment. The first introduction that Deputy Joan Collins and I got to this issue was on picket lines outside building sites on many a cold morning. Some of the first of those were probably more than decade ago, perhaps 15 years ago. It is scary to think about how long ago some of those pickets took place outside the premises of some big, wealthy building contractors that are still operating.

Building Workers against the Black Economy was one of the activist groups that was established to highlight the plight facing its members in terms of bogus self-employment. They literally and metaphorically stood out in the cold and were victimised and blacklisted for protesting over bogus self-employment. There was a large irony to that. One of the refrains the workers would repeat was that they had to go on strike and protest for the right to pay tax. The rich in this country do everything they can to avoid paying tax but those workers had to go out on strike for the right to pay tax. That is the truth of all this. It is deeply ironic, but that is what the struggle against bogus self-employment was about for the workers. It was about the right to pay tax and the right to have the benefits and employment security that flow from that.

Those workers were up against big building contractors that did not want to pay PRSI or to have any obligations to workers. Those contractors did not want to pay sick pay or to have to pay workers if work was rained off or whatever. They would go to horrendous ends, much of which I witnessed first-hand. Nasty tactics were deployed against the workers who tried to highlight the issue. I pay particular tribute to a man who has since passed away in tragic circumstances, Mr. Billy McClurg, a bricklayer from my area. He was one among many fantastic activists who suffered as a consequence of their actions.

Some of them never worked in the building industry again because they sought to highlight bogus self-employment. It has taken this long to get here but I am glad it is now officially acknowledged that this is a serious problem and we must do something about it.

It was very heartening to hear departmental advertisements advise people who believe they have been misclassified that there are places they can go now and that it is acknowledged. It is a pity it has taken so long but at least we have come some way in that regard. There is no doubt that bogus self-employment is still going on. Everybody is losing out. The workers obviously lose out. We do not know the exact scale of bogus self-employment. I believe an Irish Congress of Trade Unions report estimated it could be costing the Exchequer €600 million per year. The 2018 intervention in the building industry by the joint investigation unit and scope section, which identified 500 workers who were misclassified by building contractors, yielded the State an extra €60 million. Those 500 workers resulted in €60 million in additional revenue that year. We can see what a big loss this is to society in terms of tax revenue. Obviously, it is also a loss to the workers who are treated this way and are then vulnerable. Of course, the other big advantage of bogus self-employment is the idea of a hire them and fire them workforce that can just be got rid of because there is absolutely no obligation to them.

I am very glad we are moving forward on this issue. I hope the Government will take on the recommendations. The onus should be put on employers to prove they are fully compliant, not misclassifying people and so on. One point I really want to make is that if such employers are identified, they should be hauled over the coals for everything. It should not just involve an individual adjudication which, of course, the employers appeal in many cases. It is often at the appeal that decisions get overturned. I take the point about the scope section responding and it does respond. It often goes into an organisation and finds that the workers are right but then the barristers come out for the employers. They wheel in the heavy guns against the workers who do not, in many cases, have any representation. Sometimes they have union representation but other times they do not have any representation. They certainly cannot afford barristers and so on. Decisions get overturned at the appeals level in many cases and the matter gets dragged out. In the meantime, the workers are out in the cold and often blacklisted at that point.

There is one recommendation I would like to make to the Government and the Department if they are serious about this. First, if any employer is found to have bogusly misclassified workers, there should be a forensic audit of everything it does. That audit could involve every single employee and all the employer's accounts and books. The whole thing should be gone through with a fine-tooth comb because if there are one or two cases, it can be guaranteed there is more dirt in that company. We should go after such employers to provide a real deterrent that will stop these people doing what they are doing. While they may have got caught in that instance, very often they will just carry on regardless. That must be stamped out.

The second recommendation I will make, which I hope the committee and Government will take on board, is that where a company or employer that is guilty of bogus self-employment is in receipt of public money, that money should be stopped immediately. There should be a big black mark over that company preventing it from getting any public money in future until it has wiped the slate clean, having been fully sanctioned and penalised, the truth established and so on. Too often, the same companies involved in this sharp practice of exploiting workers, breaking the law and robbing the taxpayer get a slap over the wrist and are back in business and getting Government contracts, funding, grants and tax breaks the next week. There is, therefore, no real deterrent. That has to stop.

I did not hear if the Minister of State responded on the recommendation about the blacklisting legislation. That needs to come forward. That is a serious business. Blacklisting is a real thing and it must be stamped out. I appeal to the Government, as the committee has recommended, to bring forward the blacklisting legislation.

I may not get answers now but I am hoping perhaps the officials or the Minister of State will respond to the issues I raise. I would like to see the scope section and the joint investigation unit expanded in respect of the resources available to them. In addition, they should deal not only with bogus self-employment but any breach of employment rights and employment legislation. Perhaps they already do so; I do not fully understand all these mechanisms but I do not think that is the case.

I have raised one issue repeatedly and I would really like the Government to go after this. Sometimes, we think these things only go on in construction or maybe Deliveroo. RTÉ, the respectable State broadcaster, was found to be engaged in massive bogus self-employment and misclassification of staff. There is another area where this kind of sharp practice of bogus self-employment goes on. The scope section has found in favour of a couple of workers in the film industry which is in receipt of substantial State money every year. I do not think anybody wants to investigate the industry. I think the view is that because these are the glamorous film people, we should not look into it too much. It might be too much of a can of worms. Bogus self-employment is taking place, however.

Another practice that is taking place - this is why I would like to see the scope section's remit expanded - is abuse of the fixed-term workers legislation whereby workers accumulate service for employers in the film industry but the employers do not want to recognise that service. They do not want to acknowledge it, even though they must do so under EU law and the fixed-term workers Act. The employers then go into the Workplace Relations Commission and argue that they are not actually the employer. They say they get all this money from the Government to employ people but they do not actually have any employees. That is what they say to the WRC. When the workers tell the WRC that their rights have been abused, the employers argue that while these people worked on their film, they are not technically their employer and, therefore, they have no obligations to those workers. I would like workers to be able to tell other agencies, not just the WRC but agencies such the scope section, the joint investigation unit and similar bodies, that this is happening and ask for an inspection or investigation to establish that something is going on in order that action can be taken.

Minister of State at the Department of Rural and Community Development (Deputy Joe O'Brien)

I thank the Deputies for their contributions. I am familiar with the time Deputy Boyd Barrett described when he referenced events ten or 15 years ago. In a previous role, I assisted migrant workers in the construction industry to engage with the scope section and their employers. In my constituency, airline pilots have also faced that issue.

As agreed by all Deputies this evening, the committee's report deals with a very important issue. Deliberate misclassification of a worker as a self-employed contractor in a scenario where he or she is actually working as an employee is wrong for number of reasons. First, it results in a loss to the Social Insurance Fund, which pays for a wide range of social protection schemes. More important, it can deny workers access to our robust employment rights legislation.

I reiterate that it is not a matter of making a choice about someone's employment status. Employment status should reflect the reality of the relationship between the parties and while it will be difficult to fully eradicate false self-employment, the Government is committed to minimising its potential and detecting and dealing with it whenever it does occur.

Working with the WRC and Revenue, the Department of Social Protection will ensure we tackle the issue of false self-employment with a joined-up approach. While self-employed individuals now have an entitlement to a large proportion of available social welfare entitlements such as the State contributory pension, there are some benefits currently not available to self-employed contributors. It is very important that if individuals are, in fact, working as employees on a contract of service, they should be covered for all the available entitlements. It is likely the case that there are certain sectors in which these benefits will be particularly important.

Employers should be aware that anyone who incorrectly treats a worker as self-employed will be liable for that worker's PRSI contributions along with the employer contributions that should have been paid to the Collector General. Individual workers can always contact the scope section of the Department when they believe they have been misclassified by an employer.

The European Commission is planning a new directive on improving working conditions in platform work. This would be a welcome addition to the legislative stock and it will help us in our efforts to eradicate this problem.

Finally, I am confident that the working group that will be established shortly and will be chaired by the Minister of State, Deputy English, will be an important development and that through its work it will carefully examine the remaining recommendations of the committee’s report. As well as this, it will be a place to which we can bring the other issues that were raised here tonight by the various Deputies.

Acting Chairman (Deputy Marc Ó Cathasaigh)

I call again on the Cathaoirleach of the Joint Committee on Social Protection, Community and Rural Development and the Islands, Deputy Naughten, to close the debate.

Deputy Denis Naughten

I thank all of the Members who have contributed to this debate. I thank those who contributed not just at our own joint committee but also, as was pointed out earlier, the members of the previous joint committee who held the hearings on this issue. They did the heavy work in their hearings. I thank Deputy Joan Collins who was able to bring that together working with Mr. Jack Savage and who produced the recommendations of the report that we are discussing. I want to acknowledge the work done by the former Cathaoirleach of the committee, Senator O'Loughlin, as well as the members of the last committee. We took over that work.

I welcome the fact that the Minister of State, Deputy English, said earlier that both Departments are looking at the 13 recommendations set out in the report. Six of them have been completed and four are now under way. However, the legislative proposals that we have tabled are vitally important. That needs to be addressed. We are seeing a change and shift in work patterns in this country. We will bring forward legislation on remote working. Surely that could be used as a vehicle to help expedite some of this legislation. This is not about creating a bureaucratic system for people who are genuinely self-employed. As the Minister of State, Deputy English, pointed out, 340,000 people are self-employed in this country. However, as Deputy Boyd Barrett highlighted earlier, there are big employers who have received, or are receiving, substantial funds from the State, yet they have no employees whatsoever. It is about getting that balance right. It is about addressing emerging areas like platform working.

On foot of our report, not only did we refer it to the Department of Social Protection and to the Department of Enterprise, Trade and Employment, we also passed on a copy to the Committee of Public Accounts. The Committee of Public Accounts is following through on that within its own remit. We are looking forward to the completion of the Committee of Public Accounts hearings, as well as to the publication of its report. Once its Chair, Deputy Stanley, has published that report, our committee will then consider what elements we need to progress from that particular point in time.

I want to thank everyone who contributed to this debate. I thank those who facilitated this debate. This is an issue that the committee will be revisiting in the future.

Cuireadh an Dáil ar athló ar 8.57 p.m. go dtí 2 p.m., Dé Máirt, an 1 Feabhra 2022.

The Dáil adjourned at 8.57 p.m. until 2 p.m. on Tuesday, 1 February 2022.