RADICAL employment reforms are needed, construction union Unite said yesterday after research showed that bogus self-employment is “out of control.”
Figures obtained by a freedom of information request revealed an 8 per cent increase in construction workers paid via the Construction Industry Scheme (CIS) in the last 12 months, taking the figure to more than one million.
CIS is a tax system for construction workers who are normally officially classed as self-employed. Unite warns that the nature of their engagement means that “the vast majority are bogusly self-employed.”
The result for the workers is that they have all the employment characteristics of employees but none of the employment rights such as holiday and sick pay and can be sacked instantly without warning.
Unscrupulous bosses use bogus self-employment for construction workers to avoid paying national insurance contributions of 13.8 per cent.
Bogus self-employment has long plagued the construction industry, with bosses claiming that workers enjoy the flexibility of a good work-life balance and freedom to take on as many contracts as they want.
But a recent survey by the Joint Industry Board that sets electrician industry standards found that 84 per cent of electricians want to be directly employed, rather than employed via an agency, in order to receive full employment rights.
Unite said the new figures show that measures introduced by the government in 2014 that barred construction workers who are engaged through employment agencies or payroll companies from being classed as self-employed have failed.
Unite assistant general secretary Gail Cartmail said that the 2014 government reforms saw a huge increase in workers paid by exploitative umbrella schemes that involve shelling out for both employee and employer national insurance contributions.