UNITE the union has called for radical employment reforms after uncovering what they described as a huge rise in “bogus self-employment” in the construction sector.
The union said a a Freedom of Information request has revealed that in 2016/17 at least 1.076 million construction workers were paid via the Construction Industry Scheme (CIS). This figure is 8% higher than 12 months ago when 992,973 were paid via CIS. Unite said this adds up to 47% of the entire construction workforce being paid via CIS.
Unite said the “sharp rise” shows the government’s ambitions to reduce construction bogus self-employment has failed.
CIS is the stand alone tax system for construction workers. Unite said that while workers paid via the scheme are normally officially classed as self-employed, the nature of their engagement means that the “vast majority” are bogusly self-employed.
Unite argue that bogusly self-employed workers have the same employment traits of an employee but are denied things like holiday and sick pay and can be dismissed without warning.
Gail Cartmail, assistant general secretary of Unite said, “These figures demonstrate that bogus self-employment in construction is out of control. Employers are simply ignoring the rules in order to line their pockets and deny workers their rights.”
Unite said the government’s 2014 reforms led to an increase in the number of workers being paid via umbrella companies, which results in the worker having to pay both employers’ and employees’ national insurance contributions. The union said the government’s Taylor Review, while calling for it to be clearer to “distinguish” between workers and self-employed workers, has failed to address how existing policies are creating bogus self-employment and resulting in exploitation.
Gail Cartmail added, “We have huge numbers of construction workers being routinely exploited via the government’s own tax scheme and via umbrella companies and yet the Taylor Review has ducked these issues. Taylor talks about his seven principles for fair and decent work which includes workplace training and the health and wellbeing of workers but while the real employer can continue to divest themselves of their workforce and have no responsibility for them, his principles are nothing but warm words.
“The only way that workers will be treated fairly and decently is by introducing clear rules which ensure that workers are either genuinely self-employed or paid by a standard PAYE method. Without such a reform productivity in construction will remain low, accidents and ill health will be high and the industry will fail to train sufficient numbers of apprentices.”
