back to news listing

Penalties in law needed to tackle bogus self-employment

25 March 2019

Statement by Ged Nash TD
Spokesperson on Finance, Public Expenditure and Reform

Labour spokesperson on Employment Affairs, Senator Ged Nash has said it is essential that legislation to tackle bogus self-employment is progressed this week, and that the Fine Gael government can no longer spin their way out of this.

Senator Nash said:

“On Wednesday the Seanad will take Committee stage of my bill to tackle bogus self-employment. The Minister for Social Protection has now decided to oppose this bill, despite ample evidence of the need to change the law. Unfortunately this is another example of Fine Gael spin over substance.

“Administrative measures that are being proposed are not good enough. What is needed are robust penalties in law for bad employers who force workers into disguised self-employed arrangements when those same workers are, for all intents and purposes direct employees in all but name.

“This dodgy practice deprives workers of both their rights as workers and their social welfare entitlements.

“This behaviour also cheats the State out of tens of millions in lost PRSI income and tax revenue each year, which means less money for social welfare and for our hospitals and schools.

“These practices are well known in construction, and the phenomenon has spread to sectors including IT, media and culture, transport and logistics and finance and law.

“In 2007, a Code of Practice was introduced with a new set of criteria designed to help determine whether a worker is an employee or a genuinely self-employed sub-contractor.

“Given the alarming growth in false self-employment since the Code was first introduced, it is clear that this initiative has not served these workers well.

“Our Protection of Employment (Measures to Counter False Self Employment) Bill 2017 provides for a holistic approach to the determination and classification of employment status and a set of clear rules in statute law that would apply to all State bodies and enforced across the board by the courts and in all administrative tribunals.

“The Competition (Amendment) Act 2017, a Labour Party initiative, includes for the first time in Irish legislation a definition of the characteristics of bogus self-employment. This new legislation builds on that and extends these tests to the general population.

“The primary motivation of rogue employers who misrepresent the status of their workers is to avoid tax and PRSI liabilities and obligations.

“This Bill amends the Tax Acts to apply tax avoidance laws to the practice of bogus self-employment.

“There is no good reason to why an employer who decides to deliberately misclassify the status of an employee should not be considered to be a tax and PRSI cheat and to have the same penalties applied to them as is the case for other tax avoiders. Critically this Bill extends to PRSI also.

“This measure should act as major deterrent for employers who might consider forcing an employee to go down the false self-employment route.

“It will be debated in the Seanad on Wednesday, and I hope that the support of other parties and Independents will overcome Government opposition.”