Sunday, August 28, 2016
Where does employment drift into exploitation?
LITTLE things provide clues as to the direction the country is going.
This week it was revealed that there are 2m people in work for the first time since 2009.
There was also positive news about immigration.
A total of 79,300 people of all nationalities moved into the country in the year to last April, up from 69,300 the previous year. Of the new arrivals, 21,000 represented Irish-born people returning home.
The figures demonstrate that a new day has well and truly dawned after the night of recession.
The Government, and Fine Gael in particular, can with some justification claim that policies it pursued are now bearing fruit.
And the growth is not confined to any one sector — such as construction — but occurring throughout the economy.
Similarly, the growth is not confined to Dublin, but can be seen across the main population centres of the State. Unemployment remains a reality for around 8% of the population but opportunities continue to open up.
There was further proof of this in the CAO offers which were made last Monday.
The courses associated with the economic recovery are in much higher demand. Architecture, engineering and other construction-related courses, along with business, are all attracting greater numbers.
Notwithstanding the rain clouds of Brexit gathering on the horizon, or the fragile nature of the world economy, there are reasons to cheerful. Not everything about the labour market, however is positive or welcome.
For one thing, the nature of employment has gone through some serious changes. It is now accepted in most quarters that the concept of a job for life is past its sell-by date.
“Flexibility” is the buzz word in the labour market, and making it easier for employers to hire and fire in the modern economy makes sense. But where does flexibility drift across the line into exploitation?
Some recent high-profile cases of changed work practices raise questions about the quality of employment for those who are at work. Recently, a high-tech delivery company attempted to change work practices which would see delivery drivers paid per delivery rather than by the hour.
The company, which operates in five Irish cities, attempted the new work practice on a pilot basis in parts of Britain, but pulled back in the face of major opposition, which came even from a Tory government.
Deliveroo was just the latest start-up tech company to attempt to change work practices which effectively force employees to operate as self-employed. This is, in effect, bogus self-employment and is prevalent right across the economy.
At home, a report from the think tank TASC in June outlined how this was a growing problem. In the area of construction alone, according to TASC, those classified as self-employed increased from 25% in 2006 to 38% today.
Last Monday 96FM’s Deirdre O’Shaughnessey reported on how the practice is now growing in the tech sector. The story concerned Cork-based firm Globetech, which employs 480 people in developing high-tech solutions for areas like processing parking tickets.
O’Shaughnessy interviewed “Marie” who has worked in the company for nearly four years on short-term contracts. She would like to be employed, but has been told that she must remain self-employed and work on that basis.
“When it started I didn’t know how long it would go on,” she said.
She attempted to have her situation regularised. Others doing her highly-skilled job in the company are treated as employees, yet she has remained on short-term contracts. “When I asked they said ‘no, I can’t have my contract reviewed’.”
(Globetech issued a statement in which it said that fewer than 10% of those working for the company are classified self-employed).
Marie is among the thousands coming to this country to work, but her predicament is not confined to those described as non-nationals. She is highly skilled and a mother who would like to settle down here.
Despite being officially self-employed, workers like Marie are effectively employees. A genuinely self-employed person would be free to offer their services to more than one entity, but that is not the case here.
To all intents and purposes, the classification of “self employed” is entirely bogus, but perfectly legal.
As solicitor John Boylan, who works in the area of employment law, points out: “Self-employed people pay their own tax, their own social insurance, they are not entitled to sick pay or to holiday pay and if the position doesn’t work out they cannot take any action for unfair dismissal.”
The self- employed person would also run into problems in qualifying for the job-seeker’s allowance in the event of not having a contract renewed.
What effect does this have?
On the employer’s side it saves on costs, including PRSI and pension contributions. For the employee it heightens job insecurity.
Also, crucially, it prevents the prospect of long-term planning, such as buying a home. Banks will not lend to somebody whose employment is so insecure.
That, in turn, has an effect on society at large. Preventing a considerable cohort of maturing people from putting down roots can only have an adverse impact on the character of communities.
The State is not blind to any of this but the worrying thing is its response.
The system of bogus self-employment ensures there is a loss to the exchequer of huge sums in employer PRSI contributions, from €20m in the construction industry to an estimated €80m across the economy.
Yet an employer can decide to classify an employee as a self-employed contractor by merely clicking an option in the Revenue’s online system.
The classification of whether a worker should be an employee or self-employed is called Scope and located in the Department of Social Protection. “
If a subsequent investigation deems that the categorisation was effectively bogus and the person should be reclassified as an employee, there is no penalty for the employer.
For some, the classification of self-employed suits perfectly and is appropriate.
The problem is the growing number that are being forced into that category. It represents a small but significant shift in wealth from labour to capital at a time when in equality is growing exponentially.
This, in turn, is being reflected across the world politically through disaffection with mainstream politics and flight to the extremes.
More jobs in the economy are welcome, but it’s time the Government began addressing the drift in employment practices that are unhealthy for society.
Small things show where the country is going, and it shouldn’t take much to correct an obvious wrong.