Employment practices at RTÉ have been under the spotlight once again. Following persistent pressure from the RTÉ Trade Union Group, an independent report was commissioned to review the employment status of a cohort of contractors working at the state broadcaster. The review was carried out by law firm Eversheds Sutherland and its publication last week revealed that as many as 157 freelance media professionals may have been misclassified as self-employed by RTÉ.
Basis for the report
The independent report was commissioned following claims by unions that the employment status of a large number of RTÉ workers was being wrongly classified by the state broadcaster. 433 freelance contracts were reviewed by Eversheds Sutherland of which 106 were found to have “attributes akin to employment” and a further 51 were found to have “attributes akin to both employment and self-employment”. RTÉ noted in its defence that the majority of the freelancers reviewed were correctly engaged as contractors.
Report recommendation
The report recommended that RTÉ develop a new policy for the recruitment of freelance workers containing “clear guidelines” on when and how to determine whether to engage workers on a contract for service or directly as employees.
Implications of misclassifying employment status
Misclassifying employment status has significant implications for workers. Self-employed workers engaged on contracts for service do not enjoy statutory entitlements such as annual leave, maternity leave, paternity leave, sick pay, access to a PRSA, the right to apply for promotions or union recognition. Employees, on the other hand, are automatically entitled to receive any applicable statutory employment benefits.
Employer false self-employment risks
False self-employment reduces the government’s tax take from employment-related activity and has become a government priority in recent times. Draft legislation dealing specifically with the issue is currently working its way through the Dáil.
In addition, the Minister for Employment Affairs and Social Protection recently launched a public awareness campaign encouraging workers to seek determinations of their employment status. A determination by the Revenue finding that a worker’s employment status has been incorrectly classified will result in PRSI contributions being backdated to reflect the true employment status.
Revenue penalties
It is not clear at this stage whether RTÉ will be required to make retrospective payments to make good any unpaid employment benefits. The message for employers is nonetheless clear. Employers engaging contractors on a long-term basis should review their employment arrangements to ensure that allegations of false self-employment can’t be substantiated if the Department of Employment Affairs or Revenue Commissioners come calling.
To learn more about how to safeguard your business from Revenue investigations relating to employment status please call our 24-hour advice line on 0818 923 923
