13 Jul 2018 | 02.14 pm
Fury After Fianna Fáil Moves To Criminalise Employers
New law would hit independent contractors
13 Jul 2018 | 02.14 pm
Business Lobby group Ibec says it is appalled at the decision to make it a criminal offence for employers who incorrectly designate an employee as self-employed.
An amendment to the Employment (Miscellaneous Provisions) Bill which was passed in the Dáil last night (July 12) “is yet another sign of the dysfunction that our current political structure can demonstrate”, according to Rhona Murphy, Ibec Head of Employment Law Services.
Murphy added: “This legislation is unnecessary as there are already measures in place to address such abuses by employers. The wording of the amendment fails to take account of the complexities often associated with commercial agreements and is tantamount to a blanket ban on the use of independent contractors.
“Even where such arrangements are entirely genuine and may be insisted upon by the individual contractors, the possibility of a jail sentence means businesses are unlikely to take the risk of using them.
“The continuous chipping away at the competitiveness of our business model by poorly crafted legislation must be tackled. Evidence based regulatory impact assessments are at a very minimum what both society and business should expect.
“This latest amendment is another exercise in populist politics, with political parties more concerned about optics than sensible, balanced regulation. While we acknowledge instances of poor employment practices, the crippling burden the legislation in this format would impose is disproportionate.”
There are five key issues that the Bill addresses, where employment law should be strengthened for the benefit of employees, without imposing unnecessarily onerous burdens on employers. The Bill will:
- Ensure that employees are better informed about the nature of their employment arrangements and, in particular, their core terms at an early stage of their employment. A new offence is being created where employers fail to comply with the new information requirements.
- Strengthen the provisions around minimum payments to low-paid vulnerable employees who may be called in to work for a period, but not provided with that work.
- Prohibit zero hour contracts, except in specific limited circumstances.
- Ensure that employees on low hour contracts who consistently work more hours each week than provided for in their contracts, are entitled to be placed in a band of hours that better reflects the reality of the hours they have worked on a consistent basis over an extended period.
- Strengthen the anti-penalisation provisions for employees who invoke, or try to invoke, a right that is specified in legislation.
Fianna Fáil Amendment
The Employment (Miscellaneous Provisions) Bill has been in the legislative process for three years. At the Report Stage this week, which is near the end of the Bill’s passage through the Oireachtas, Fianna Fail deputy Willie O’Dea laid down an amendment that included the following provisions:
• It shall be an offence for an employer to incorrectly designate an employee as self-employed.
• A person guilty of an offence under this section shall be liable on summary conviction to a class A fine or imprisonment for a term not exceeding 12 months or to both.
• Where an offence under this Act is committed by a body corporate and is proved to have been so committed with the consent or connivance of any person, being a director, manager, secretary or other officer of the body corporate, or a person who was purporting to act in any such capacity, that person shall, as well as the body corporate, be guilty of an offence and shall be liable to be proceeded against and punished as if he or she were guilty of the first-mentioned offence.
• Summary proceedings for an offence under this section may be brought and prosecuted by the Workplace Relations Commission.
• In proceedings for an offence under this section, it shall be a defence for the accused to prove that he or she exercised due diligence and took reasonable precautions or any person under the control of the accused to ensure that this designation was correct.
After the amendment was tabled, minister Regina Doherty (pictured) stated that the Bill is not an appropriate vehicle for the amendment that has been tabled on Report Stage.
“The amendment would have such an impact and is so detailed and worthy that it should be subject to proper and thorough scrutiny to allow the House and all stakeholders who are at risk of being adversely or positively impacted the opportunity to consider the full implications of what is being proposed,” she said.
“None of us was aware that such a detailed amendment would be tabled on Report Stage. I accept that the amendment is well intentioned. I am particularly concerned about some of its consequences.
“The amendment could fundamentally change many aspects of employment law and social welfare and revenue law without any consideration of the negative consequences for employees, employers or even consumers.
“I am worried that the Bill, which we have all worked on for an awfully long time, which we all want passed and which has gone through a comprehensive drafting and scrutiny process, could have inserted into it a new provision that is not in line with the purpose of the Bill but would have far-reaching and unintended consequences.
“The risk is not just that we would have bad law but that it would not meet the objectives of the Bill and would have adverse impacts on other legal codes that are very much relied upon particularly by employees,” the minister told the Dáil.
Despite the minister’s warning, O’Dea’s amendment was accepted by the Dáil by 46 votes to 38. All Fianna Fáil TDs present including Jim O’Callaghan voted in favour, as did assorted lefties and Eamon Ryan of the Green Party.
Doherty concluded after the amendment vote: “I am genuinely disappointed by this evening’s outcome. I will now have to spend the next number of months consulting with businesses, workers and industry to provide amendments to the amendment we have just passed. I will do my absolute best to ensure the Bill is not delayed but I have no doubt that it will.”
The minister added later: “The Bill is aimed at tackling exploitative employment arrangements and employers who do not respect even the most basic rights of their employees. While I am very pleased that we have succeeded in getting this piece of legislation through the Dáil, I am however, deeply disappointed that the opposition’s introduction of certain amendments at a very late stage in proceedings will result in delays in the Bill completing its passage through the Oireachtas.
“This is unfortunate, because this legislation, when enacted, will help people employed in precarious or less secure arrangements.
“The opposition is looking to legislate for perceived problems faced by an entirely different cohort of workers in a manner that would be better addressed in an entirely different piece of legislation. This proposal impacts on a whole range of stakeholders who have had no opportunity to provide input or advice. The amendment also has knock-on effects not just on other employment legislation but also social protection and revenue legislation, and competition and consumer legislation.
“The intended purpose of this Bill is to help people on insecure and low paid contracts move to a secure footing that they currently don’t have. This amendment adds months, at a minimum, to the enactment of the Bill and this unnecessary delay is a grave disservice to those vulnerable workers whom we are striving to support,” Doherty stated.
Employed or Self-Employed? The Willie O’Dea Test
An employee is a person who in performing his or her duties does so as a person not in business on their own account and who is not a free agent or economically independent of the person engaging his or her service. While all of the following factors may not apply, an individual would normally be an employee if he or she
(a) is under the control of another person who directs as to how, when and where the work is to be carried out,
(b) supplies labour only,
(c) receives a fixed hourly/weekly/monthly wage,
(d) cannot subcontract the work, if the work can be subcontracted and paid on by the person subcontracting the work, the employer/employee relationship may simply be transferred on,
(e) does not supply materials for the job,
(f) does not provide equipment other than the small tools of the trade, the provision of tools or equipment might not have a significant bearing on coming to a conclusion that employment status may be appropriate having regard to all the circumstances of a particular case,
(g) is not exposed to personal financial risk in carrying out the work,
(h) does not assume any responsibility for investment and management in the business,
(i) does not have the opportunity to profit from sound management in the scheduling of engagements or in the performance of tasks arising from the engagements,
(j) works set hours or a given number of hours per week or month,
(k) works for one person or for one business,
(l) receives expense payments to cover subsistence and/or travel expenses,
(m) is entitled to extra pay or time off for overtime.
While all of the following factors may not apply to the job, an individual would normally be self-employed if he or she
(a) owns his or her own business,
(b) is exposed to financial risk by having to bear the cost of making good faulty or substandard work carried out under the contract,
(c) assumes responsibility for investment and management in the enterprise,
(d) has the opportunity to profit from sound management in the scheduling and performance of engagements and tasks,
(e) has control over what is done, how it is done, when and where it is done and whether he or she does it personally,
(f) is free to hire other people, on his or her terms, to do the work which has been agreed to be undertaken,
(g) can provide the same services to more than one person or business at the same time,
(h) provides the materials for the job,
(i) provides equipment and machinery necessary for the job, other than the small tools of the trade or equipment which in an overall context would not be an indicator of a person in business on their own account,
(j) has a fixed place of business where materials, equipment etc. can be stored,
(k) costs and agrees a price for the job,
(l) provides his or her own insurance cover e.g. public liability cover, etc.,
(m) controls the hours of work in fulfilling the job obligations.