‘Bogus self-employment’ in the construction industry is leading to huge skills shortages and increasing demand for migrant labour, a union has warned.
Construction workers’ union Ucatt estimates that 40% of the 2.2 million building workers employed in the UK are operating under a false self-employment regime. These workers hold a CIS4 card, which means they pay reduced tax and National Insurance contributions.
The union claimed companies using this labour were not operating apprenticeships or providing training, with the resulting skills shortage pushing up demand for migrant labour.
Ucatt said many migrant workers were issued with temporary CIS4 cards on arrival in the UK, even though they did not have NI numbers. This means they will be treated as self-employed and not subject to work permit restrictions.
Alan Ritchie, Ucatt general secretary, said: “Bogus self-employment is the scourge of the industry. It has led to massive skills shortages and continues to deny workers basic employment rights.
“There is also strong evidence that building sites using false self-employment rather than direct labour are less safe to work on.”
The Construction Confederation said bogus self-employment was a problem with “no easy answer”.
“Most good employers do not support the practice of false self-employment, but clearly there are still too many bosses and workers who do allow it to happen,” a spokesman said.
A new industry tax scheme being introduced next week means companies will face fines of £3,000 for false declarations on the employment status of workers.
Talks on direct labour for London Olympics stalled
Negotiations between Ucatt and the Olympic Delivery Authority (ODA) on the use of directly employed labour for the 2012 Games have stalled.
The union wants all building workers on the project to be directly employed, citing the Wembley stadium project as an example where the use of sub-contractors led to spiralling costs and chronic delays.
However, the ODA is reluctant because of the extra cost it would involve. An ODA spokesman said the authority wanted to resolve the issue quickly, but would not give “a running commentary” on the talks.