Dáil Éireann Debate, Wednesday - 4 December 2019
42. Deputy John Curran asked the Minister for Employment Affairs and Social Protection the investigations and reviews undertaken by the scope section of her Department either solely or in cooperation with the Revenue Commissioners to address the issue of bogus self-employment to date in 2019; and if she will make a statement on the matter. [50283/19]
Amharc ar fhreagraCan the Minister set out the reviews and investigations undertaken by the scope section in the Department of Employment Affairs and Social Protection either alone or with the Revenue Commissioners on bogus self-employment, and their outcomes? How many cases were determined to be bogus self-employment?
I hope I am on the record stating my determination to tackle false self-employment. We have reallocated some significant resources, particularly this year in the Department to do so.
Since I became Minister, the Department's social welfare inspectors have been instructed to redouble their efforts with a nationwide campaign of employer inspections. That happens through our scope section which is long established and spread all around the country where we have our inspectors. As the Deputy is aware they do other inspections apart from bogus self-employment and because of that I decided earlier this year to establish a dedicated new unit of inspectors with a specific focus on tackling false self-employment. I have increased the number of deciding officers in that scope section.
Although they are new and separate, they still operate under the umbrella of the scope section. I have increased the number of deciding officers in anticipation of an increase in referrals to the scope section as a result of the increased and targeted inspections. I have also instructed my officials to develop legislation in the form of a new criminal offence to prohibit and penalise the willful misclassification of a person as being self-employed when he or she is an employee; new anti-victimisation measures, with recourse to the WRC for fearful workers who wish to seek a determination on their employment status from the scope section but have told me privately that they are afraid to do so, which cannot be countenanced; and a new guidance document on employment status that is to be put on a statutory footing so that everybody will be clear about their obligations and rights with regard to employment.
The employment status investigation unit, ESIU, comprises the new team of social welfare inspectors. I have specifically tasked the unit with detecting, targeting and reducing false self-employment. The ESIU has a current caseload that potentially affects over 500 workers across a range of sectors, including the tourism, fitness, dental, and retail sectors. Two employer cases have been decided since the introduction of the changes I have just outlined. It is not just two because we are now entering organisations and assessing an entire body of employees. One person was confirmed as being properly self-employed but the case covered a potential 156 workers. We have determined that all of these 156 workers are classified correctly and no further action is needed. The other case covered 19 workers found initially to have been inaccurately categorised as being self-employed. An appeal has been lodged in that case. If we win the appeal, we will assess arrears and seek compliance in that case.
Additional information not given on the floor of the House
The ESIU has initiated a programme of solo inspections in the construction industry and English language training sectors. It is also planning to carry out joint inspection projects with the joint investigation unit, that is, the special investigation unit, Revenue and the WRC, focused on the construction industry early in the new year.
The ESIU is also working with our business analytics unit using predictive analytics to assist with the targeting of companies where false self-employment is likely to occur. This work is in its initial phase and it is intended to develop it over time.
More generally, the scope section receives requests for decisions on employment status from a variety of sources. These include requests from employers, employees, social welfare Inspectors, social welfare scheme areas and Revenue. Two such requests have been received so far this year from Revenue.
Regarding inspections and reviews, there are approximately 350 social welfare inspectors appointed nationwide who carry out work across PRSI and social welfare schemes, including the special investigation unit and the ESIU. I trust this clarifies the matter for the Deputy.
I was trying to make notes as the Minister was giving her reply. I will get the information from the full transcript of her reply. I acknowledge that she stated last summer that she was establishing the new unit. She might indicate how many people are actually working in the new unit. Is she saying that only two of the 500 investigations uncovered possible bogus self-employment and that one of these was not a case of bogus self-employment? Is that what she is trying to tell us in terms of the numbers? Is this new unit working independently in the Department or is it working as the scope section traditionally worked, for example, on joint investigations with Revenue?
We have a target of 12 but have not yet reached that full quota because it is a specialised unit. We have invited people from around the country who were inspectors to join it before, possibly, we hand pick people. We are approximately three quarters of the way there. The training for the people who have already joined the unit has been finalised so the actual targeted examination of classifications started in earnest a number of months ago. That is alongside the re-evaluation of the legislation I have spoken about.
There are a number of outstanding and pending cases so it would not be fair to say that in the context of the 500 cases at which we have looked, the overwhelming response would be that people were not misclassified. This is much more nuanced and, probably, widespread at a much lower level than we anticipated. There is a general view among people that certain industries are very non-compliant in this area. The one we probably all go to has been the subject of a review and a very targeted joint inspection by the Department and Revenue and has been found to be, in the main, compliant. We are now concentrating on other areas that might not have popped into people's heads in the first instance such as the fitness, IT, graphics and pharmaceutical industries, the healthcare sector, broadcasting and media. There a number of significant pending investigations.
I thank the Minister for her reply. This has been an issue for some time. Officials from the Department appeared before the Joint Committee on Employment Affairs and Social Protection in connection with it. I acknowledge that there has been a welcome move on the issue because there had been a reluctance to deal with it and a feeling that it was being exaggerated and overstated. The Department was not dealing with it as proactively as it is now. This is a positive move. We need to see the roll-out take place. It needs to be accelerated because as the Department pursues other things like auto-enrolment in pension schemes, people who are bogusly self-employed will lose out more in the future than they do now. I wish the Minister well. This is really important.
The Minister made reference to proposed legislation to protect people who may come forward but who are currently afraid to do so. This is extremely important because the anecdotal evidence we receive is that people are not prepared to put their heads above the parapet because they are afraid of victimisation in terms of the precarious nature of their jobs and fear their jobs may disappear.
I thank the Deputy for the compliment. I agree with him so I thank him. I know that this is a new unit that has only been established for a couple of months but it might be helpful if at the end of every year, we issue a report on the investigations. We might not name the employers but we could set out whether investigations have been positive or negative so that we can get a feel regarding where we are hitting targets.
Anti-victimisation legislation is really important. A very young man told me that he had been working in a particular industry and was not self-employed but was forced to become self-employed along with hundreds of other people in his organisation. The problem is that it is not unique to this young man's company. It is unique to his industry. Had he rocked the boat and been let go, which is apparently what happened to previous employees in that place of work, he would have been blacklisted and would have been unable to go to similar companies. In his mind, his skill set only equipped him to work in that industry. This is not on and we must stamp it out. Apart from the obvious loss of revenue to the State, and we quibble in here year in and year out about what we could do with more money if we had it, employment rights are being trampled and we cannot stand over that. I will not stand over it.
