My experience began in July 2000 when I wrote to the scope section of the Department and requested an insurability of employment decision. In my letter to the scope section, I explained why I believed I was an employee and not self-employed. Within a week of my letter to the scope section, a group of vested interests met. This group included representatives from the Department, the social welfare appeals office, IBEC, ICTU, the Department of Finance and Revenue. Before any scope section investigation had begun, this group, which subsequently became known as the Employment Status Group, decided that no matter what evidence I presented, the status quo was to remain. The status quo was a secret special tax agreement between the Department, Revenue and courier company employers which treated all couriers as PAYE employees yet labelled them as self-employed. I call this State-approved and assisted misclassification of employees as self-employed gigification.
Gigification permits selected employers to evade PRSI obligations and employee rights obligations. Gigification is always bogus self-employment but bogus self-employment is not always gigification. The difference is the approval and assistance of the State in creating bogus self-employed workers. Scope was deliberately sidelined. It can take up to six years and costs up to €1 million in legal fees for a worker to overturn a State-approved, default self-employment classification.
The Department grants illegal State aid in the form of a PRSI exemption to selected employers. It is a tax break which puts compliant employers at a distinct economic disadvantage and denies employees all their rights as employees. The misclassification of workers as self-employed by the Department of Employment Affairs and Social Protection has one purpose - to save selected employers circa 30% on labour costs as an enticement to create jobs. The mechanisms used by the Department and Revenue to knowingly circumvent applicable law are unlawful test cases. That a number of these unlawful test cases exist was confirmed in writing by the social welfare appeals office, SWAO, on 9 January 2019. A representative of that office confirmed that, on occasion over the years, an approach of having test cases has been taken or considered by the SWAO. Only one of these precedential test cases has ever been revealed by the Department of Employment Affairs and Social Protection.
That test cases are unlawful was acknowledged Minister for Employment Affairs and Social Protection on 25 March 2019 in an article in The Irish Times, which states: "The Minister is also looking at changing legislation to permit deciding officers to make determinations on the employment status of groups or classes of workers." This is a clear acknowledgement from the Minister that no legislation currently exists to justify determinations on the employment status of groups or classes of workers.
That test cases are unlawful is further confirmed in a letter dated 9 May 2019 from the Secretary General of the Department of Employment Affairs and Social Protection to the Public Accounts Committee which states: "There is no legislative provision which provides for Appeals Officers to make decisions on the employment status of groups or classes of workers who are engaged or operate on the same terms and conditions."
There are serious constitutional issues with making a decision affecting a group of people without proper procedures and safeguards. There must be specific legislation to permit deciding officers to make determinations on the employment status of groups or classes of workers, which there is not. This important legal tenet was confirmed in the High Court case of John Grace Fried Chicken Ltd & Others v. The Catering Joint Labour Committee & Others.
In September 2000, the Chairperson of the Public Accounts Committee wrote to the Secretary General of the then Department of Social, Community and Family Affairs and requested to know why all couriers were classified as self-employed by default by the Department. Until September 2000, the Department had never recorded, suggested nor admitted that precedential test cases existed. This letter from the Secretary General is the first recorded instance of the Department laying claim to a precedential test case. In this letter the Secretary General states:
A number of representative 'test cases' were selected in 1993/94 for detailed investigation and formal insurability decision under social welfare legislation. This process resulted in a decision by an Appeals Officer of the Social Welfare Appeals Office on 12 June 1995 who decided that a courier was self-employed. The Appeals Officer's decision established the criteria in relation to the employment status of couriers that has, since then, been generally accepted throughout the industry and also by the Office of the Revenue Commissioners for tax purposes.
The Secretary General listed these uniquely unlawful precedents as follows. The first criterion was that the courier provided his or her own vehicle and equipment. The second was that he or she was responsible for all expenses. The third was that payment was made on the basis of rate per job plus mileage allowance. The Secretary General also stated: "The Appeals Officer's decision established the criteria in relation to the employment status of couriers."
The scope section of the Department was present at this test case appeal on 12 June 1995. Indeed, it was the scope section decision that a single courier was an employee and not self-employed which was being appealed to the social welfare appeals office.
On 11 April 2019, the scope section wrote that it had no knowledge of precedential test cases, including the case the Secretary General claimed was a test case in his letter to the Public Accounts Committee in 2000. A scope deciding officer wrote:
Please note I am not aware of any secret test case nor are any of my colleagues in the Scope Section. This was news to me when Martin explained to me.
The scope section was the defendant in the 1995 appeal. In the 24 years since the test case described by Secretary General, the scope section still has not been informed that the social welfare appeals office overturning of the scope section decision was actually a test case and, as such, if it were legal, should form part of its deliberations. The test case does not form any part of deliberations of decisions by the scope section then or now.
Workers appearing before the social welfare appeals office are not informed by the Department or the appeals office that the appeals office applies precedents which are not known to the scope section, the courts, the legal profession or any other legal or quasi-legal body of the State. The use of secret precedential test cases by the social welfare appeals office leads to a situation where the social welfare appeals office makes appeal decisions on the same workers twice, once in their absence without the worker's knowledge or participation, and again should the worker seek to have their self-employed by default misclassification overturned.
In 2000, the Chairman of the Public Accounts Committee wrote to the Chairman of the Revenue Commissioners and asked why all couriers were being treated as self-employed by the Revenue Commissioners. In August 2000, the Chairman of the Revenue Commissioners replied:
The issue of Couriers and particularly Motorcycle Couriers was the subject of protracted discussions between Revenue and Representatives of the Courier Industry. I enclose copies of our letters of 7 March 1997 and 3 April 1997 to (Accountants) which represented Courier Companies at the discussions. The letters outline the agreement reached for tax purposes.
This agreement treated couriers as employees under the PAYE system, with tax and PRSI deducted at source by their employer. Couriers received payslips with the deductions and employer clearly identified. The only difference between couriers and most other employees is that the PRSI class allowed to be deducted by the Department of Employment Affairs and Social Protection was class S, which is generally a self-employed class. The courier companies were exempted from paying employers PRSI and also exempted from their statutory obligation to make a return on all courier paid in excess of IR£3,000.
All past non-compliance was forgotten about. The Revenue Commissioners did not agree with the courier companies, nor with the subsequent letter from the Secretary General, that the 1995 appeal hearing was a test case and went to very great lengths to explain why.