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Confusing and inconsistent legislation is leading to a growth in false self-employment which is favouring 'cowboy' builders, prejudices the enforcement of health and safety regulations and destroys the training ethos, claims the Federation of Master Builders. In a letter to the Chancellor, the Federation, which represents 13,000 small and medium sized building companies in the UK, has called on the Government to come up with a straightforward definition of self employment to end the growth in unfair practices which bedevil the industry.
"The present situation undermines the whole structure of the industry," says Ian Davis, Director General of the Federation of Master Builders, "it makes it difficult to build and maintain a well-motivated, loyal workforce, causes shortages of skilled labour and contributes to an unacceptably high accident rate. Employers deplore the scenario and ambiguous legislation compounds the problem."
Currently the treatment of employed and self-employed under tax, National Insurance and employment law is unequal and often inconsistent. National Insurance regulations also allow those who may be self-employed for tax purposes to be treated as 'earners' and therefore subject, together with their 'employers', to a regime designed for employees. As is well known, the tax man treats self-employed workers more favourably than employees.
The result is pressure from individuals to be engaged as 'self-employed' as they see higher take-home pay outweighing the advantages of security. This demand to be treated as self-employed (which is often bogus), is compounded by uneven and at times inadequate enforcement of the law.
In addition, the competitive pressures resulting from the willingness of some contractors to increase their use of phoney self-employed labour, to enable them to tender for contracts at a lower price than that of contractors less willing to do so, exacerbates the problem.
The Federation, other trade associations and the trade unions are pressing the Chancellor of the Exchequer, and Ministers in relevant Government Departments, urgently to establish an inter-Departmental task force to resolve the issues associated with the Construction Industry Scheme (CIS). "The priority must be to review the definition of employment status and provide effective enforcement of the rules relating to status," concludes Ian Davis.
First posted: 17 July 2002. Last modified: 17 July 2002.
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