A union report this week claims that an agreement reached between concrete association Construct and the Inland Revenue wrongly classifies a large number of directly employed worker as self-employed. The union says contractors prefer this sort of arrangement as it costs them less in tax and national insurance.
The union, which claims to have obtained evidence of an agreement between Construct and the Inland Revenue, alleges that tax officials went ahead with the scheme, knowing that it would not stand up to a legal test in a tribunal or court.
Stef Stefanou, chairman of Construct, said members of the association had co-operated with the Inland Revenue to resolve the issues over self-employment. He agreed that Construct members had reclassified many of their staff in 1997, but denied that they had received favours from the Inland Revenue.
He said that his members would welcome full direct employment throughout the industry. He added: "It is regrettable that UCATT has many skilled self-employed members unwilling to become employees."
Stefanou added that tax officials were carrying out another review of self-employment because of issues arising from the European Union's working time regulations.
George Brumwell, general secretary of UCATT, said employers had used the system to wrongly classify construction workers and deny them basic employment rights. He called for an investigation by parliamentary watchdog the National Audit Office and government reform.
Brumwell said: "We believe it is in the interest of workers, employers and taxpayers to reform and simplify the current system."
A spokesperson for the Inland Revenue promised to investigate the claims in the reports if they could be substantiated.
She added: "It's complete rubbish to suggest that the Inland Revenue would encourage tax evasion; our job is to collect the right tax from the right people."
The union report, Undermining Construction, was commissioned by UCATT and the Institute of Employment Rights and was compiled by Mark Harvey from the University of Manchester.