Disguise it, it is still an elephant’
Bob Dowdall, Chief Inspector of Taxes, March 2001
Assiduously avoiding the term ‘Bogus Self Employment’, Tom told TheJournal.ie that there has been a move away from direct employment, not just in Ireland but internationally. However, he said the scale of this has been “grossly exaggerated”
There has indeed been a move away from direct employment in the construction sector.
In 1998, the share of workers in the construction industry classified as self-employed was 16%. The Office of the Comptroller & Auditor General was, at that time, concerned that a significant of those classified as self employed were in fact bogus self-employed.
Partly because of the C&AG’s concerns, the Revenue Commissioners undertook a special program of 6,200 visits to Principle Contractors in the construction industry. During the visits, the status of 63,000 sub-contract situations was examined.
12,000 (19%) of those sub-contract situations were not genuine self-employment, they were bogus self employment.
In 2001, concerns were expressed at the Public Accounts Committee that mis-classification was still rife in construction. The then Chairperson of the Public Accounts Committee, Mr. Jim Mitchell, ordered a similar special program of visits to Principle Contractors in the construction industry. The results of this PAC investigation exposed the same high level of bogus self employment in the construction industry – circa 20%.
Over the following 6 years, the rate of self-employment in the construction sector fell almost 3% to 13% with a commensurate reduction in the percentage of Bogus Self Employed. The investigations instigated by the C&AG and the PAC were pivotal to that decrease.
In July 2007, Tom Parlon took up a position as Director General of the Construction Industry Federation. Within in 5 years, in an unprecedented explosion unseen anywhere else in Europe, the percentage of workers in sub-contract situations in the construction sector more than doubled before peaking at almost 31% (Refer to QNHS data below).
In 2015, the Irish Congress of Trade Unions released a report which states that Bogus Self Employment in the construction sector was costing the tax payer 80,000,000 euro per year. This figure was based upon 30,000 – 40,000 sub-contract situations but later Dail replies state that the actual number of sub-contract situations is in excess of 100,000, resulting in a loss to the taxpayer of circa 250,000,000 euro per annum.
As was confirmed by the Minister for Social Welfare in recent weeks on Drivetime RTE, there are no official figures available from either Social Welfare or Revenue on Bogus Self Employment, however, the QNHS data is generally accepted as credible, unlike the Pernicious Mr. Parlon.