Firms still use industry tax scheme to exploit staff through bogus self-employment, claims TUC report

The TUC has called for the construction industry¹s tax scheme to be reformed to ensure vulnerable workers are treated properly by employers.

The trade union body's Commission on Vulnerable Employment has issued a report after a year-long investigation for widespread reform of the Construction Industry Scheme (CIS) to drive out bogus self-employment from the construction industry.

The report, which has collected statistical and anecdotal evidence from across the UK, marks the first time business leaders have joined unions to call for greater regulation of working conditions for vulnerable employees.

The report's commissioners included directors from Land Securities, Serco and Jaeger, alongside union representatives from Unite, the GMB, Unison and Ucatt.

Brendan Barber, the TUC's general secretary and chair of the commission, said: "The abuse of employment status, such as we see in the CIS, is a root cause of much of the exploitation that disfigures UK workplaces."

Bogus self-employment occurs when employers register their workers as self-employed. This means they can avoid paying National Insurance contributions, and deny them employment rights offered to ordinary workers such as paid holiday and statutory sick pay.

The CIS allows workers to register as self-employed even if they have set hours, have to obey orders, and are provided with tools and materials by employers.

In its submission to the commission, Ucatt said: "Due to the short-term thinking of construction companies using bogus self-employment, continuing training is virtually non-existent."

Under the online scheme introduced last April, the number of CIS applications is expected to be as high as 2.2 million.

The commission also called for the Gangmasters Licensing Authority (GLA) ­ which regulates the agriculture, horticulture, and shellfish-gathering industries ­ to oversee other sectors, such as construction.

Paul Whitehouse, the chairman of the GLA, voiced his support last week for the agency to be allowed to regulate other sectors.

In an interview with the BBC, he said: "I can¹t see why if you work in one area you should be protected, but not in another."

Jamal's story

Taken from the Commission on Vulnerable Employment report:

Jamal is a 32-year-old African migrant worker. He has worked in construction for six months and is paid £4.10 an hour as a casual labourer.

He does not receive any holiday pay, sick pay or other benefits. He gets this rate because he has carpentry skills. Other casuals are paid £3.10 an hour.

Jamal should have a half-hour break, although he says managers sometimes do not allow workers to take breaks if there is too much work or if time has been lost to the weather, or because the site is receiving a visit from a manager.

He says: "If your work doesn't satisfy them, managers shout at you, so sometimes it is crazy. Some bosses they are even more worse. They abuse you very bad. People are working for £3 an hour. Also you have to work 12 hours a day."

Postscript

For the history of the CIS search www.building.co.uk/archive