Campaign to End Bogus Self-Employment Gets Major European Boost

Construction union UCATT gained a significant boost in its campaign to end bogus self-employment in the construction industry. Following a two day conference in Prague (4-5 February 2010) European construction trade unions (EFBWW) and construction business representatives (FIEC) jointly signed a document condemning bogus self-employment. The document will now be used as a major lobbying tool to help eradicate bogus self-employment in the construction industry, wherever it occurs in the European Union.

The document titled Joint Conclusions and Recommendations of the European Partners in the Construction Industry on Self-Employment and Bogus Self Employment, says: “EFBWW and FIEC agree that there are very harmful consequences to “undeclared labour” in the construction sector. Undeclared labour practices, which include bogus self-employment, are illegal and have serious social, economic and health and safety consequences for the entire sector, both at the macro level (eg fiscal and social security) and at the level of individual worker and their employers.”

The conference in Prague and the signing of the document were the culmination of a joint two year project between union and business representatives examining the issues of bogus self-employment.

Alan Ritchie, General Secretary of UCATT, who spoke at the conference, said: “The signing of the document is a significant victory for everyone who wants to stamp out bogus self-employment. It is now recognised by all sides throughout Europe that bogus self-employment cannot and will not be accepted.”

UCATT will now use the document to lobby the British Government to crackdown on the endemic bogus self-employment that exists in the British construction industry.

In July 2009 the Treasury published proposals that would “deem” all self-employed construction workers to be employees for taxation purposes, unless they met one of three strict criteria. The deeming proposals would dramatically reduce instances of bogus self-employment. UCATT are calling for the deeming proposals to be included in this year’s budget and for them to be introduced at the earliest opportunity.

UCATT represents 125,000 members employed in the construction industry throughout the United Kingdom and the Republic of Ireland

Notes to Editors: Bogus self-employment occurs when a worker is classified as self-employed for tax purposes but has all the employment characteristics (has set hours, cannot decline work, has to obey orders and is paid an agreed rate) of a normal employee. Bogus self-employed workers do not have the most basic employment rights and can be fired at a moment’s notice. They do not receive holiday pay, sick pay and pensions. If they are unable to find work they are not eligible for many state benefits.

The majority of bogus self-employment occurs through the Construction Industry Scheme, the stand-alone tax scheme unique to the construction industry. Unlike other forms of self-employment workers are taxed at source. Employers have the most to gain by using bogus self-employed workers as they avoid paying employers National Insurance Contributions of 12.8 per cent of earnings. Workers pay a slightly lower level of NI and are entitled to make an end of year tax return.