Who do you work for? In the sepia-tinted days of the traditional workplace, it was an easy answer. Work, for the most part, involved a single firm, a full-time job and regular working hours. But the modern workplace is increasingly diverse, complex – and baffling. Trade unions’ once-dominant role has been eclipsed. A far-reaching revolution is transforming and disrupting when, where and how we work.
A blurring of the line between employees and the self-employed is just part of this changing landscape.
Today the rise of employment agencies, umbrella companies and the contracting-out of services makes it more difficult to determine where self-employment begins and employment ends. Political and legal disputes over employment status are breaking out in Europe and the US. The latest front involves companies such as Uber, which treat workers as independent contractors.
The status of a worker should depend on the nature of the relationship between worker and employer.
Range of factors
In simpler times, the difference between the two was that an employee worked under a contract
of
service to a company; while a contractor supplied their labour under a contract
for
service. But there are a range of other factors that determine the relationships, such as whether the person works for a single employer; whether they are obliged to accept the work on offer; and if they use their own materials.
Internal Revenue Commissioners’ documents show there is rising concern about whether its code of practice – drawn up a decade ago – is fit for purpose in capturing the complexity of modern work arrangements. It says the structures under which workers are employed is far different today from those just a few years ago. “Indeed, it seems reasonable to state that such modern structures of engagement were not envisaged when the code was developed,” it says.
There are no reliable figures to quantify how big an issue it is, given that authorities are still grappling with how to define the issue.
There are some numbers for the construction sector, where bogus self-employment has been a long-running issue. About 190 workers were reclassified as employees following inspections involving Revenue and other authorities last year. On one building site alone, officials found more than 30 cases of suspected misclassification. There is no specific law to prohibit the practice, though employers found engaging in the practice face the prospect of paying outstanding tax and penalties.
Erosion of rights
Groups such as the trade union-backed
Nevin Economic Research Institute
(Neri) say greater protections are needed to prevent the further erosion of workers’ rights. Neri director
Tom Healy
says employees benefit from social insurance, sick pay, rules over the minimum wage and protections against unfair dismissal. Contractors or the self-employed – with some exceptions – do not benefit from these.
Employers’ group Ibec doesn’t defend bogus self-employment. But it says there is little evidence to suggest it is a big problem and adds that the image of contract work as the scourge of the modern workplace is inaccurate and outmoded. It says many workers actively choose to work in sectors where they have greater independence and more flexible hours to achieve the work-life balance they want. It forecasts work will become more specialised and remote, with profound consequences for the workplace.
The challenge for policymakers will be how to provide a balance, which offers both security and flexibility for workers in a rapidly-changing workplace.
