‘Draconian’ bogus self-employment law will hurt economy - Ibec

Legislation that would tackle the problem of bogus self-employment with "draconian" penalties will hurt the Irish economy, the Irish Business and Employers Confederation (Ibec) has claimed.

Recently proposed legislation on the topic would cause customers to “flee” from genuine self-employed individuals, the business lobby group told the Oireachtas committee on Employment Affairs and Social Protection.

Bogus self-employment arrangements are where workers are forced by an employer to declare themselves as self-employed rather than employees.

Rhona Murphy, head of employment law services at Ibec, said there was an absence of evidence to support the narrative that bogus or false self-employment was widespread.

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Ms Murphy said the issue could be addressed by increased inspections and better enforcement of current regulations. She said the suggested changes to employment definitions would have a “significant distorting impact on the Irish economy”.

Specialist workers, in areas such as construction and IT, often preferred to be classified as self-employed, she said. There was a risk that the changes proposed could classify a window cleaner as a direct employee of a customer.

Memo

Minister for Employment Affairs Regina Doherty this week brought a memo to Cabinet setting out plans to tackle bogus and false self-employment. The plans include a standalone team to investigate potential bogus self-employment in large companies.

Under the Minister’s proposals legislation would be introduced to try to prevent victimisation of workers who seek an official determination of whether they are actually genuinely self-employed.

Legislation to tackle the issue has also been brought forward in Private Members Bills by members of the Opposition including Labour Senator Ged Nash and People Before Profit TD Bríd Smith.

Fianna Fáil spokesman on social protection Willie O'Dea TD said there was a "counter narrative" that people looking to tackle the problem wanted to "do down" genuine self-employed workers.

“I have complaints on hand at the moment from people in the construction industry, from people being forced to act as self-employed, even when they are patently not self-employed,” he said.

Ms Smith said there was a need for in-depth research to find out the scale of the problem. “We’re not making this stuff up, we don’t have these Bills before the House because we’ve nothing else to do.”

Blacklisted

Mr Nash said he was aware of cases where individuals who complained about being incorrectly classified as self-employed had been blacklisted.

“I know there is a form of blacklisting going on in the construction sector, and I have also learned there is blacklisting going on in parts of the pharmaceutical sector and IT sector.”

Jean Winters, director of industrial relations with the Construction Industry Federation (CIF), said trade unions in the construction industry had created a narrative that bogus self-employment was widespread.

“Recent reports on the misclassification of workers do not bear out the unions’ concerns,” she said.

Ms Winters said legislation based “purely on anecdotal evidence” would have the effect of “stifling the industry’s ability to grow and create employment”.