State losing hundreds of millions due to ‘bogus claims’

Ictu conference told ‘theft’ taking place with alarming regularity in low-paid sectors

The Government is continuing to turn a blind eye to the “theft” of hundreds of millions of euro from State coffers as a result of bogus self-employment arrangements in place in a number of sectors, the Irish Congress of Trade Union (Ictu) biennial conference has been told.

Siptu manufacturing division organiser Greg Ennis said the misclassification of workers as self employed was "a scourge not only in the construction and the electrical trades", but one that was also occurring with alarming regularity in the low paid food industries such as meat processing.

He said Revenue in the Republic was carrying out about 2,000 inspections per year but that the full level of bogus self -employment was not being captured by State authorities. He maintained the practice was “rampant right across industry”.

He told the conference in Belfast that "bogus self employment is theft".

READ MORE

“It is a theft from the State’s coffers to the tune of €250 million per annum in construction alone and it is also a theft perpetrated, on what in many cases, are the most vulnerable workers on this island,” he said.

He suggested those workers “do not realise the implications of this three card trick, which is the coercive payment of reduced PRSI to the detriment of particular social welfare benefits, pension entitlements, annual leave, and illness benefit as we move through this pandemic, wherein such workers in many cases, were not entitled to the pandemic unemployment payment”.

"So called, sole traders from Romania, working in meat processing plants in Ireland and paying tax in Poland is a shocking indictment of the Government's laissez fair approach to this criminal scam where a worker is posted from abroad, the employer is obliged to notify the Workplace Relations Commission, " he went on.

“There were no such notifications from meat plants to the Workplace Relations Commission in 2020. It seems that the Irish Government has the resources to check on lone parents, but not on employers and you can draw your own conclusions from that.”

He continued: "We must continue our demands for increased resources in the employment status investigations unit of the Department of Social Protection.

“Codes of practice in this situation, have proven to be as useful as a concrete parachute.

"Carrying out examinations at Oireachtas level such as those in June this year and issuing subsequent reports is no longer good enough.We must have legislative reform to address this nefarious practice, and we must have it now."

Mr Ennis said that in Germany following the worst ravages of Covid-19 within its meat processing industry, the government there enacted legislation from January this year, which ensured that all workers in abattoirs and meat processing plants were directly employed.

Separately delegates at the conference overwhelmingly back supported an internal report on disputes within the trade union movement which had been challenged by the second level teachers’ union, ASTI.

The report dealt in part with a complaint made by ASTI over “spheres of influence” and which organisation should represent teachers in specific types of schools.

The ASTI has argued a dispute committee and a subsequent appeal committee were not constituted in accordance with the rules of the Ictu.

The committees did not back the ASTI in its dispute over “spheres of influence”.

The ASTI challenged part of the Ictu executive council’s biennial report dealing with disputes.

If the conference had rejected this part of the executive council report, then the actual findings of the dispute committee and the appeal committee on the “spheres of influence” complaint would also fall.

However the report was supported by delegates by a margin of 422 votes to 17. Sources suggested that virtually all Ictu affiliates with the exception of the ASTI voted to accept the report.

Meanwhile European Commission for Jobs Nicolas Schmit told the conference that the level of collective bargaining in the Irish economy had fallen from 44 per cent coverage in 2000 to 34 per cent in 2017.

He suggested that this did not fit with the ideas of the social market economy which required good social dialogue and large collective bargaining coverage.

Martin Wall

Martin Wall

Martin Wall is Washington Correspondent of The Irish Times. He was previously industry correspondent