“I Don’t Want To Make Employers The Bad Guy”

at | 38 Replies

Minister for Employment Affairs and Social Protection Regina Doherty

Last night.

On RTÉ One’s Drivetime.

Philip Boucher-Hayes interviewed the Minister for Employment Affairs and Social Protection Regina Doherty.

They discussed bogus self-employment – where a worker is forced by an employer to declare themselves as self-employed rather than employees and the employer doesn’t have to pay PRSI.

And they spoke about how the deputy secretary of the Department of Social Protection told an Oireachtas committee in November that the department does not prosecute employers hiring people under bogus self-employment conditions.

During the interview Ms Doherty admitted that her department doesn’t prosecute employers for the practice “for a variety of reasons”.

She later told Mr Boucher-Hayes that she disagreed with him when he said it appears employers are being given a “free pass”.

From the interview…

Philip Boucher-Hayes: “The Deputy Secretary of your department appeared before an Oireachtas committee back in November and said that it was departmental policy not to prosecute employers who were engaging people on bogus self-employment terms. Let’s just play it. It’s only 10-seconds long.”

Regina Doherty: “Sure.”

[plays clip]

“We have not been keeping specific stats on bogus self-employment.”

Boucher-Hayes: “The other clip there is Patricia Murphy saying that it is department policy not to prosecute.”

[plays clip]

“The department itself has not taken a criminal prosecution against employers because we have, in fact, used, in our joint operations, the powers available under the tax acts to attach and apply administrative policies and we consider to be, at this time, more effective, and timely.”

Boucher-Hayes: “You’re not prosecuting employers who break the law but you will pursue benefit fraudsters through the courts. This sounds like one law for white collar criminals and another for blue collar criminals?”

Doherty: “No, it’s certainly not. What we do with regard to the scope environment is that if you presented yourself and I use you as an example because we’re talking: If you presented yourself to ask us to do an investigation into your employment status, we would do it.

“If we determined that you were incorrectly categorised, we would go to your employer and say Philip Boucher-Hayes started working for you on the 1st of January, 19-0-flat – you owe us and him and the Revenue Commissioners X amount of money and we would penalise them.”

Boucher-Hayes: “But what about where I work for somebody who has employed 100 or more people on bogus terms and you can prove that and see that they are systematically breaking the law? Why wouldn’t you prosecute them?”

Doherty: “And again, what we do is we bring everybody in line, in the category that they should be paying. We backdate all of the proceeds that the PRSI claims both the employer and the employee should be making to the Revenue Commissioner and to myself and to my own department…”

Boucher-Hayes: “But Regina Doherty, it is a criminal offence to employ people on these terms, why are you not prosecuting them? Why are you giving them a free pass?”

Doherty: “We’re not giving them a free pass. And we conduct thousands, tens of thousands investigations…”

Boucher-Hayes:No you are giving them a free pass because the Deputy Secretary General of the department admitted that there had only been one prosecution, in spite of the fact that this is a criminal law, under the statute books but your policy is: not to enforce it.”

Doherty: “Yeah, I think the main determination and the main ambition from the department is to get people correctly classified – that’s the way the department has always worked. We changed our inspection regime in the last year to actively go out and pro-actively conduct uncalled or unannounced inspections in particular industries which we have never done beforehand. And what we’re doing now today is changing two things this year: we’re going to introduce anti-penalisation legislation to make sure that nobody that is in that status of maybe being coerced into being self-employed should be afraid to take a case…”

Boucher-Hayes: “Ok, that’s great. But up until now, you have been…”

Doherty: “Let me finish, for one second…if you just let me finish for one second…I’m also going to take away the attractiveness of employers using people as contract staff at some point, with legislation, in the next 12 months. So if I can tackle this in a number of ways, ultimately, what I want is: I don’t want to penalise anybody. I don’t want to make employers the bad guy…”

Boucher-Hayes: “What do you mean? Hang on a second. You penalise people who are committing benefit fraud. You prosecute them but you don’t do the same for white collar criminals. Why not?

Doherty: “Well, we actually do.”

Boucher-Hayes: “No, you don’t. You’ve done it on one occasion and that’s the figure of the Deputy Secretary General of the Department.”

Doherty:The reason that we don’t prosecute is that there are a variety of reasons. You’re making the assumption that everybody is put on a self-employment status without the knowledge, without the co-operation, without the consent. There are reasons why people find themselves classified in incorrect classifications and when they come to us we’ll investigate, we find those reasons and we correct and impose fines…”

Boucher-Hayes:You’re not naive to the fact that one of the main reasons is so that employers can duck their PRSI contributions, it’s a money-saving…

Doherty: “Well. That’s exactly what I just told you is that if I can manage to take away the attractiveness – I think that will fix an awful lot of our problems but what I’m more concerned about…”

Boucher-Hayes:You might fix an awful lot of your problems by making an example of the kind of people who are doing it and prosecute them through the courts…”

Doherty: “But what I’m more concerned about…what I’m more concerned about Philip is ensuring that those people who are out there, and we ran a campaign this year to let people know that we even exist, because, to be honest with you, a lot of people were not even aware of the scope, the section within my department on what it does: to let the people know that if they need any assistance or investigation into the classification of their status, from a PRSI perspective, we are here, we will make the investigation and we will make the correction.”

Boucher-Hayes: “Ok.”

Doherty: “And anybody that’s found wanting will be penalised financially. I know you’d probably like to see people hung up by their feet. What I want to do is make sure that we take away the attractiveness...”

Boucher-Hayes:No I think people would like to see everyone being treated equally before the law. That’s the reason that I raised the question because at the moment they’re not being, employers are being given a free pass on this one. Let’s just set that aside…”

Doherty: “I tell you what, let’s just agree to disagree cause I certainly don’t agree with you.”

Boucher-Hayes: “The scope decisions that you have referred to there: People bring their claims and very often, as our investigations established, the scope will find in their favour – that they are indeed bogus self-employed. But when that decision is appealed to the Social Welfare Appeals Office, by the employer, those decisions are routinely overturned our investigations found out.

“Is the system rigged in favour of the employers?”

Doherty: “Again, if I was to give you an example of the amount of people who apply for carers’ allowance that are refused that then have a mechanism to appeal, that are then overturned and found in their favour, would you think that the system is rigged towards people who are getting carers’ allowance or invalid benefits?”

Boucher-Hayes: “We’re talking specifically about bogus self-employment.”

Doherty: “No, no. You’re talking about a culture which you’re trying to assign to the department which is grossly unfair. We have in our department…”

Boucher-Hayes: “I’m not talking about…I’m talking about facts. I don’t know what the culture is. I’m just talking bout the numbers that have exposed themselves – every case that we looked at where the scope decision had gone against an employer was overturned in favour of the employer. The system would appear rigged would it not?

Doherty: “Well, no, it wouldn’t appear. In so far as when anybody makes an application and there’s an adjudication, everybody – whether you’re an employer or an employee, in this particular section – has the ability to appeal it. If they don’t like that decision they have the ability to appeal it again. And if they don’t like that decision they have the ability to take it to the actual courts of this land.

“The cases that you may have looked at might have been one way or the other particularly, but there is no sign or trend in our department with regard to people being categorised one way or the other.

“What there is in our department is an investigation section so that anybody who thinks that they are misclassified from a social insurance perspective to make a complaint and we will investigate.”

“And if they don’t like the outcome of the investigation, they have the opinion, or the ability, to be able to appeal it, appeal it and review it and there is no trend.”

Listen back in full here

Previously: Bogus Self Employment Cheats Us All

Rollingnews

38 thoughts on ““I Don’t Want To Make Employers The Bad Guy”

  1. Jonjo

    I presume this is the ‘gig economy’? People delivery food is a big one.

    It’s not just the Employer PRSI. Correct me if I’m wrong but don’t these ‘contractors’ get no annual leave too? Because their seen as self-employed, when they’re not working, they don’t get paid.

    Reply
    1. Hansel

      The engineering industry is rife with it too.

      As I’ve written below:

      “Contractors” (employees) get higher pay
      Company pays less tax
      Company pays less PRSI
      Company pays less for sick pay/leave/etc
      Company overheads are less (don’t need to provide as many desks/hardware/etc)
      Company then gets to underbid their competitors for jobs thanks to the savings
      Company gets rid of less efficient workers much more easily (contract end)
      Finally the company gets to tell them all get lost when the inevitable downturn comes in our industry in the next couple of years (we’re quite cyclical).
      Zero repercussions for anyone, ever.

      Reply
      1. Cian

        “Contractors” (employees) get higher pay
        Contractor gets much higher pay. As a rule of thumb, if you earn €50,000 full time, you look for €500/day.

        Company pays less tax
        Contractor pays much higher tax

        Company pays less PRSI
        Contractor pays slightly higher PRSI

        Company pays less for sick pay/leave/etc
        Not really. While they don’t directly pay a contractor for leave, the contractor rate includes a 10% uplift to cover the contractor when they go on holiday.

        Company overheads are less (don’t need to provide as many desks/hardware/etc)
        What? If the contractor is in the office they need a desk – don’t they? or if they are on-site somewhere then they don’t need a desk (and it doesn’t matter if the person not needing a desk is a contractor/full time employee).

        Company then gets to underbid their competitors for jobs thanks to the savings
        Not really. The ‘savings’ are fake. They company can contract a person at €700/day for 150 days; or pay them for a full year + sick leave + PRSI + holidays + training + other @€100K/year

        Company gets rid of less efficient workers much more easily (contract end)
        True this. A contractor has to be good enough to warrant keeping.

        Finally the company gets to tell them all get lost when the inevitable downturn comes in our industry in the next couple of years (we’re quite cyclical).
        Yes, so the ‘cost’ of a full-time worker includes a future liability for redundancy.

        Zero repercussions for anyone, ever.
        Still, it’s amazing how many people are willing to contract.

        [aside: this is high-end contracting. I don’t know what it is like at the bottom end – food delivery guys, etc.]

        Reply
        1. Sheik Yahbouti

          For Jaysus sake, Cian, will you never tire of getting on here every day to defend the absolutely indefensible? Do YFG employ you, or are you a ‘Contractor’?

          Reply
          1. Cian

            Would you prefer an echo-chamber?

            When everyone is saying the same thing – nobody is learning.
            When everyone is saying the same thing – people are afraid to speak up.

  2. Eoin

    When the RTE presenter asks why you’re not prosecuting law breaking and your response is

    ” I know you’d probably like to see people hung up by their feet. ”

    You just know the presenter has scored a home run and the interviewee is scrambling.

    Well done PBH (again).

    Reply
    1. curmudgeon

      Terrible reasoning there. Would you feel the same way about all the women who bought illegal abortion pills or all the families who have to aquire black market cbd oil for their dependents who have seizures?

      Reply
      1. Eoin

        If I was the Minister for Justice and was asked why there weren’t prosecutions for both of these instances of law-breaking, I might personally feel sympathetic to the law breaking, but I wouldn’t accuse the interviewer of wanting to see the law breakers crucified.

        If you’re a law maker then you have a duty to uphold the law and not diss people who highlight it when you don’t uphold the law.

        Reply
        1. Cian

          In fairness the interviewer started it:
          “You might fix an awful lot of your problems by making an example of the kind of people who are doing it and prosecute them through the courts…”
          This, to me, suggests Boucher-Hayes wants ‘the law breakers crucified’ (your words).

          Reply
          1. Ciuncainteach

            I usually find that your arguments are sober and well-reasoned Cian, even where I may disagree in principle, but just wanted to reply on this point.

            The deterrence function of criminal sanctions is a long-held legal principle, and I would dispute that PBH raising his point could be construed as calling for ‘crucification’. Deputy Doherty’s response – that PBH was calling for these offenders to be hung up by their feet – was a strawman point. Asking for the existing law to be applied (through prosecutions and sanctions) is not comparable to asking for draconian penalties for those found guilty of the offence.

            It is in society’s interest that those alleged (with sufficient evidence) to have committed criminal offences are prosecuted. It is also in society’s interest to see that justice is done. If one group of offenders (in this comparison; welfare fraudsters) is prosecuted to the full extent of the law while another group of offenders (in this case; company executives committing de facto tax evasion) isn’t, then it makes a mockery of the concept of the rule of law and results in the loss of faith in democratic institutions.

            Considering that there has been a significant drop in the confidence of people in democratic institutions globally, the point is vital.

            Other than that – wishing you a happy 2019!

          2. Cian

            @Ciuncainteach
            It was Eoin that first used the word “crucified”, PBH asked if the department should “make an example of [the] people who are doing it”, the minister responded by saying they take a less confrontational approach rather than seeing “people hung up by their feet.”

            If one group of offenders (in this comparison; welfare fraudsters) is prosecuted to the full extent of the law while another group of offenders (in this case; company executives committing de facto tax evasion) isn’t

            I would agree with this statement if it were true. However, there isn’t any evidence to support the first part. Welfare Fraud is prosecuted only if the person refuses to repay the monies wrongfully taken.

            In the same way, companies seem to be asked to settle up with revenue. And if they do – no prosecution happens.

            What I don’t know is this: “Has a company ever been asked to repay PRSI/taxes based on bogus self-employment and they refused to do so?. And if this has happened, after they refused why were they not prosecuted?”

          3. Ciuncainteach

            Thanks for clarifying Cian.

            I appreciate that crucified was not the term you used. You did contend that PBH escalated it rather than Deputy O’Doherty. My argument was that this is not a charitable interpretation of PBH’s intention, basing my belief that he used the phrase ‘make an example of’ to relate to the legal principle of deterrence.

            I take your other points however – if only those that refuse to pay back the wrongfully taken funds are prosecuted in both instances, then enforcement may well be applied fairly already. I’m probably guilty of interpreting Deputy O’Doherty’s argument uncharitably to boot.

            I would contend that there are other considerations such as rational choice, deterrence, etc, that would make more enforcement in white-collar tax evasion cases desirable by comparison to prosecuting welfare fraud. This is an argument for another day however.

          4. Cian

            Thanks Ciuncainteach, something else occured to me. Who would be prosecuted? The accountant? HR? The directors? Or would the company be fined?

            And if they prosecuted the company, could you close that company and reopen another doing the same thing?

  3. millie st murderlark

    I’m not sure why, but she always gives me the impression that she’s utterly inept.

    Regardless of what she’s saying or doing. She just has that look about her.

    Reply
  4. Cian

    Genuine question. If a company has issues with Revenue, say, underpayment of VAT, or PAYE. Are they immediately prosecuted? Or are they first given the chance to repay their taxes (+ charges + interest)?

    Add it is only if they don’t pay up they get prosecuted?

    Reply
    1. Mickey Twopints

      They get hit with penalties and interest, and then they’re subsequently vilified by clueless YFG heads on Broadsheet when years later they have an unconnected dispute with a bank resulting in a high profile eviction.

      Reply
      1. Cian

        Thanks. But do they get prosecuted in the first instance?

        If some is caught by Social Protection claiming fraudulently they aren’t immediately prosecuted. They try to accommodate them with a deal whereby they repay the monies due. It is only if this fails that they prosecute.

        Reply
        1. anne

          He’s referring to serial offenders. Look at your man who was prosecuted for the evasion of vat on garlic imports. It’s deliberate & an offence but they’re given a free pass as such to keep doing it.

          Reply
  5. Starina

    Caught rapid lying:

    Boucher-Hayes: “You prosecute them but you don’t do the same for white collar criminals. Why not?”

    Doherty: “Well, we actually do.”

    Boucher-Hayes: “No, you don’t. You’ve done it on one occasion and that’s the figure of the Deputy Secretary General of the Department.”

    Doherty: “The reason that we don’t prosecute is that there are a variety of reasons.

    On a side note, a former employer of mine only reported my first two weeks and my last two weeks of employment with him to revenue, and not the year in between. Miserly git.

    Reply
  6. Iwerzon

    Is this the same Regine Doherty who Revenue recently wrote-off Euro 280,000 debt when her side business went bust?

    Reply
    1. Giggidygoo

      And did her creditors get paid?. And did she take an illegal loan out of the company?
      “First-time TD Ms Doherty has previously admitted taking loans totalling €37,360 from Enhanced Solutions Ltd when the size of the loans relative to the business was also in contravention of the company law, but the debt has been paid back and Ms Doherty has said she had informed the Director of Corporate Enforcement of the breach herself.” https://www.independent.ie/business/small-business/fine-gael-tds-firm-folds-with-debts-of-280000-29021682.html
      And has the ODCE taken any action ?

      Reply
  7. Zaccone

    Great interview, fair play to PBH. Bogus self employment costs the state far more than social welfare fraud every year. Employers need to be punished for engaging it.

    Reply
    1. Kolmo

      +1
      Good work PBH,

      Most of the so-called social welfare fraud was found to be Dept errors, but demonising people who are struggling and will never be in a position to influence the policies of FG are easier to scapegoat, and there are enough useful semi-literate reactionaries to give the lie legs, FG were always the party of the insulated classes, why investigate them when they have poor people to point and shout at..

      Reply
      1. Cian

        While it is true that most so-called social welfare fraud was found to be Dept errors (about 2/3rd) but the remaining third has seen over €10 million recovered from people that were committing fraud.
        Either way, it has resulted in a 30+ million saving for the state.

        Reply
        1. Shinty

          Yes. Welfare fraud costs the state approx. 25 million a year. Meanwhile employers engaging in bogus self-employment are estimated to be costing the state at least 300 million a year – and have done apparently for at least the last 20 years – & none of them are being prosecuted for doing so.

          Reply
    1. Paulus

      Funny thing about the nose; it can be all Royston Vasey-ish, or “cute as a button” depending on a tiny difference in tilt: Something to consider when begetting offspring eh.

      Reply
  8. Hansel

    Many of our competitors in the engineering industry engage in this.

    Some of our competitors even have hundreds of bogus “contractors” who are actually employees. I know because I have friends working in some of these companies.

    “Contractors” (employees) get higher pay
    Company pays less tax
    Company pays less PRSI
    Company pays less for sick pay/leave/etc
    Company overheads are less (don’t need to provide as many desks/hardware/etc)
    Company then gets to underbid their competitors for jobs thanks to the savings
    Company gets rid of less efficient workers much more easily (contract end)
    Finally the company gets to tell them all get lost when the inevitable downturn comes in our industry in the next couple of years (we’re quite cyclical).
    Zero repercussions for anyone, ever.

    I find it extremely frustrating and unfair that we have to compete with these cowboys, as our company treats us very well.

    And yes I could name many names, but swing a cat in the engineering world and you’d find it.

    Reply
  9. anne

    Just an FYI for Regina – employEES provide their labour to employers.

    It’s Employees income which generates spending in the economy without which employers wouldn’t have anyone who would purchase their goods and services. Get your priorities right.

    Reply

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