Thousands of workers are, and have been, misclassified as self-employed by the State, the Dáil Public Accounts Committee has been told.
Activist and employment rights campaigner Martin McMahon said that all couriers had, for example, been labelled as being self-employed workers based on a test case decision by a Department of Social Welfare appeals officer in 1995.
“Employment status must always be decided on the applicable law and the individual circumstances of each case. Despite agreement from the Revenue Commissioners that each case must be taken on its own facts in accordance with case law, the Revenue Commissioners have openly admitted to the Public Accounts Committee that this is not what happens in practice.”
Mr McMahon said that just because a person was a courier, it could not be said that all couriers were self-employed.
He said the Department of Social Protection had admitted that it was "doing test cases" and using the precedents from those test cases to label entire industries as self-employed.
“The way it is working at the moment, the Revenue Commissioners and the Department of Social Protection are classifying workers as default self-employed and, if the worker wants to appeal that decision, they must go then go through a process.”
Mr McMahon said a worker must first make their case to the Scope section of the Department of Social Protection and the employer could appeal any decision that found the worker was an employee to the Social Welfare Appeals Office.
"If the Social Welfare Appeals Office overturns the decision of the Scope section decision, which they have done with every courier case since 1993, then the worker's access to the courts starts at High Court level.
Mr McMahon said the system was "rigged" so that the worker could not simply overturn the decision that they were self-employed. He said if they wanted to do so it involved a huge costly process that started in the High Court and would go to the Supreme Court.
Mr McMahon told the committee that the State was “granting illegal State aid, in the form of a PRSI exemption, to ‘selected’ employers based on misinterpretation of the law”.
“ It is a tax break which puts compliant employers at a distinct economic disadvantage and denies employees all their rights as employees. The mechanisms used by Department of Social Welfare and Revenue are unlawful test cases.”
The chairman of the Public Accounts Committee, Brian Stanley of Sinn Féin, said the Revenue Commissioners had maintained to it in correspondence that each case was individual and needed to be considered on its own merits.
Mr Stanley said this position from Revenue seemed to be significantly at odds with the situation in the courier industry where the default position was that personnel were considered to be self-employed in the first instance.