Crackdown on bogus self employed

Jul 31 2009 by Chris Knox, The Journal

THE corruption caused by bogus self-employed workers in the construction sector is the focus of a crackdown by the Government.

Now that the Treasury consultation document on the plans announced in the last Budget have been released, we can see that it doesn't herald the end for labour-only subcontractors.

Under the Government proposals, all construction workers will be deemed to be employees unless they fall into one of three areas: they supply their own materials, they provide a substantial amount of plant, or they provide other people's labour, as well as their own.

The crackdown is aimed at tackling the false employment which occurs when workers are treated as self-employed for Income Tax and National Insurance despite their work being carried out in a way which demonstrates "an employment relationship".

Not only does this cause a potential risk for the Exchequer, there are negative effects on other businesses, as well as to the individual concerned, and these need to be dealt with.

Businesses which are compliant with the law find it hard to be competitive with those who flout the law and such skewed market conditions can not be allowed to damage these obedient companies.

For the workers themselves, there is a risk to their social security benefits, so the only people who are not being punished are the businesses who work their way around the outside of the law.

One of the biggest issues is the uncertainty which is heaped upon the workers who, unions say "fear being sacked at a moment's notice, so are unlikely to complain about dangerous working practices".

In response to the Treasury document launch, Alan Ritchie, general secretary of UCATT continues: "If workers become too sick or old to work they will be denied benefits and will not have an old age pension."

A degree of care does need to be taken, because there are workers out there who are rightly self employed. The nature of the industry means that this is often the best way forward for many and their livelihoods need to be protected.

However, with clear guidelines set out for what is self employment and what doesn't constitute that status, we can hopefully move forward in a way which proves beneficial for the individuals and the wider economy.

For more information please contact chief executive, Catriona Lingwood, on 0191-3837435 or catriona@cene.org.uk .

Catriona Lingwood is chief executive, Constructing Excellence in the North East

If workers become too sick or old to work they will be denied benefits and will not have an old age pension