02/05/2008

Call To End Bogus Self-Employment In Construction

The TUC's Commission on Vulnerable Employment, whose report was published recently, has called for reform of the Construction Industry Scheme (CIS) as one of its recommendations.

Recommendation 51 says: "The Construction Industry Scheme (CIS) should be reformed to ensure that CIS workers are considered as employees."

The report says that one of the main causes of vulnerable work is the poor deal suffered by those who work but do not have the legal status of an employee, with a proper contract of employment. It singles out the CIS as one example of this, saying: "The vast majority of workers on CIS have the characteristics of employees, as they have set hours, cannot refuse work, have to obey orders and have materials and tools provided.

"However, many of these workers are classified as self-employed. Unlike other employees, this group of bogus self-employed workers are taxed 20 per cent at source (30 per cent before registration occurs); however, they can claim much of the tax back through making an end-of-year tax return. The employer pays no NI contributions and the worker pays at a lower level. Due to their self-employed status, CIS workers have very few statutory employment rights and are denied access to additional workplace benefits."

The Commission, which involves employers and independent experts, as well as trade unionists has been working for the last year. It says that two million UK workers are "trapped in a continual round of low-paid and insecure work where mistreatment is the norm".

In the introduction commissioners say that they were shocked both by the extent of vulnerable work and that much of the poor treatment they found was perfectly legal. The report says that "employment practices attacked as exploitative in the 19th century are still common today" and that the "poor treatment at work that we have found should not be tolerated".

TUC General Secretary and Commission Chair, Brendan Barber, said: "All the Commissioners - whatever their backgrounds - were shocked at just how vulnerable some workers are in today’s Britain. Their treatment is a national scandal, and we need urgent action. The abuse of employment status, such as we see in the Construction Industry Scheme, is a root cause of much of the exploitation that disfigures UK workplaces."

(NS/JM)

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