Self-Employment and Bogus Self-Employment in the European Construction Industry
14 Pages Posted: 12 Apr 2010
Date Written: April 12, 2010
There have always been self-employed workers in the construction industry. Craftsmen in particular are often self-employed workers. Approximately 14% of construction workers are self-employed today, according to “Employment in Europe 2005”. The level of self-employed workers is even higher in some countries, such as Greece (40%), Poland (29%), Cyprus, Italy, Portugal, UK.
The distinction between self-employed workers and employees has important fiscal, social and economic consequences: • Self-employed workers work under their own professional responsibility and therefore do not work under the authority of the main contractor; • The method of payment of taxes and social security contributions differs between self-employed workers and employees; • Some working conditions (wages, working time, rest periods, ...) governed by collective agreements or by specific legislative, administrative and regulatory provisions are not applicable to self-employed workers; • As a consequence, relatively extended social protection (e.g. in case of temporary employment, occupational accidents, early retirement, ...) is more restricted for self-employed workers.
During recent years, labour inspectors, tax inspectors and social partners have noticed an increase of self-employed workers in the construction industry. In fact, some countries have chosen to promote self-employment as a driving force for their economic development and therefore easily grant self-employed status to workers.
This increase is also partly due to organizational and economic developments in the construction sector. The main company becomes more and more a ‘user’ and is surrounded by a constellation of companies and self-employed workers with whom they have flexible relations of a purely businesslike character. This development has lead to an increase in “dependent self-employment” or “dependent outsourcing”. This economic dependence on one employer blurs the distinction between self-employed and employee status.
Apart from discussions at national levels, the phenomenon of self-employment has also received attention at the European level. In 2002, the European Commission commissioned a study on economically dependent work/parasubordinate (quasi-subordinate) work. This report was discussed by the European Parliament on 19 June 2003 in a public hearing.
In 2003, the Council also adopted a Recommendation concerning the improvement in health and safety protection at work for self-employed workers (2003/134/EC). In its resolution on the application of the Posting of Workers Directive, dated 26/10/2006, the European Parliament made a number of clear statements on the issue of self-employment and bogus self-employment.
Finally, various cases at the European Court of Justice are a very important source of information. This research examines the ways in which self-employment and bogus self-employment are characterised in the EU Member States, in line with the interpretation of the ECJ. Based on this evidence, the European Social Partners for the Construction Industry (FIEC and EFBWW) have decided to analyse the legal, regulatory, administrative, organizational and practical aspects of self-employment and bogus self-employment in the construction industry. The survey – which was co-financed by the European Commission - has examined the positive impact of genuine self-employment on the labour market and has also looked at the measures which have been developed to prevent, detect and sanction bogus “self-employed”, as well as their impact. This research was conducted in 11 countries: Belgium, the Netherlands, France, Spain, Germany, Sweden, Poland, Romania, the United Kingdom, Ireland and Italy.
Keywords: Irregular work, self employment, bogus, constructions industry
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