The following (Part 1) is the initial SCOPE report and request for further action to Philip Cox PO Special Investigation Unit & Tommy O'Friel Special Investigation Unit dated 23rd December 2014. Scope do not carry out investigations. Investigations are carried out by Social Welfare & Revenue Investigators and the evidence gathered is sent to the SCOPE Section for formal decision where each case is assessed on it's own merit in accordance with the general precedents of Irish Law.
A formal decision on the iusurability of 14 persons is required in respect or their employment status with JJ Rhatigan & Co.
The construction sector is an identified area of control risk and one where vigilance and monitoring of compliance is necessary. In light of particular emphasis has been given to the Education Capital Programme which has an ear marked expenditure of 2 billion over five years. The inspection focus is towards larger projects and sites.
The requirement for a formal decision on the insuability of employment arises from work undertaken at Kishoge Community College which is a multi-million Euro Greenfield development under the publicly funded Education Capital programme.
The site has been the location of a rather protracted industrial relations between Unite the Union and the Principal Contractor JJ Rhatigan & Co. This industrial dispute has also been the subject of political and parliamentary enquiry with regard to both the employment status of and industrial relations between the principal contractor and the workers involved. Attached for reference are:
- Response to PQ 4473-14 to Deputy Arthur Spring dated 25th November 2014
- Email response issued to Deputy Spring by Philip Cox date 21st November 2014
- Response to PQ 40575-14 to Deputy Padar Toibin dated 22nd October 2014
- Response to representations made by Deputy Peadar Toibin dated 6th November 2014
The location and site referred to was visited by inspectors from the Department's Special Investigation Unit and officers from Revenue and NERA on 23rd September 2014.
3. INTERVENTION BY NERA
A group of the workers who are part of this insurability decision met with Derek Molloy Inspector NERA on 16th October 2014 and were represented by Rob Kelly UNITE union who is the union official concerned with the dispute. The meeting was to gather information regarding the situation in relation to the workers' claims and provide information to them on their employment rights and redress options. A note of this meeting is attached for reference.
At the meeting, NERA informed the workers that the issue of their classification as self-employed would have to be clarified and NERA gave them information on how to make an application to SCOPE section of the Department of Social Protection for a determination of their status. If they are reclassified as employees, NERA can then intervene on their behalf or the workers can make a claim to a Rights Commissioner.
4. INVESTIGATIONS & ENQUIRIES
On the 27th November 2014 I was contacted by Mr. Rob Kelly, Organiser Construction Sector of Unite Union with a view to meeting with DSP in order to obtain a determination on insurability of the workers previous employed and now involved in the aforementioned industrial action. This meeting wa facilitated a Clondalkin Social Welfare Local Office at 11.00am. Present at this meeting were:
Philip Cox Principal Officer SIU
Thomas O'Friel Assistant Principal SIU Dublin South
Rob Kelly Organizer
Stephen Gleeson (Worker)
4.1 Chronology of Events
The events and their chronology provided by these individuals and their representative are detailed hereunder. In addition, a letter from Unite Union's solicitor (tab F) comprehensively details the workers perspective and position and this is attached for reference and information.
- Towards the end of May 2014 Stephen Gleeson (Worker) made contact with a one Nicky Ryan (who was stated to be a block laying sub-contractor) about the prospects of securing work on the Kishoge Community College site. Stephen was advised that there was work available and he and seven other persons commenced work on the 26th May 2014.
- At this stage all those who commenced work on site provided tax and PRSI detail as well as SAFE Pass details to Mr. Ryan. It was asserted at the meeting of 4/12/2014 that Mr. Ryan played a very peripheral role, if any, and that their direct line of communication and direction resided with a one Noel Cummins who was the contracts manager for JJ Rhatigan Co. It was maintained the Mr Ryan was only on site for two days during the period and had virtually no involvement with those engaged on block laying duties.
- It is understood that on 11th July 2014 Nick Ryan left the site. During the period 26th May to 1st July 2014 the individual blocklayers and general operatives were not paid until eventually a payment of 3200 euro was made to Stephen Gleeson with further payments of 907 euro on 16th July and 1,185 on 18th July 2014.
- It was stated at this juncture and in order to provide a continuum of work on the site that Noel Cummins requested a meeting with Stephen Gleeson and Patrick Molloy. The proposition put to them was that they and their fellow bricklayers would become subcontractors of JJ Rhatigan & Co. This was regarded by the workers as a 'fait accompli' and failure to comply with what was proposed would ultimately lead to them being let go off the site.
- Both Molloy and Gleeson subsequently formed a limited company after a period of about three weeks via an accountant. Irrespective of the formation of this company the workers interviewed on 4th December 2014 stated that Noel Cummins was responsible for the organisation of all employment arrangements for all bricklayers on the Kishoge site. The desire of the workers was to formalise their employment position, pay and conditions as employees. Many of the workers concerned maintain they have never been employed as sub-contractors nor wished to be so.
- Arising from disquiet amongst workers a further meeting was also held with a Sarah O'Donoghue HR JJ Rhatigan & Co to confirm arrangements and she advised that they were appropriate in the circumstances.
- Matters further came to a head when on 28th August 2014 Noel Cummins contracts managers instructed Messers Gleeson and Molloy to dismiss two bricklayers Patrick Redmond and John O'Hanlon. On hearing this - the bricklayers and associated workers downed tools. When they attended for work on Monday 1st September they were refused access to the site. Since the the workers have been involved in a picket at the Kishoge site and their industrial action is continuing.
Following on from the meeting of the 4th December 2014 forms INS 1 were completed by prior arrangement by all the 14 relevant workers and witnessed by Tommy O'Friel Area Manager Dublin South and Carmel O'Halloran SIU. These forms are attached for formal decision.
4.2 Enquires Made Nicholas Ryan
From enquires made Mr Nicky Ryan is the subject of separate SIU investigation. He has been registered self-employed since 2000 but has not returned any trade income since 2002, only a PAYE salary which stopped in 2009. He would have been registered as a director of NPPR Ltd which folded in 2001 (His father was the other director). He registered for RCT in September this year (2014), there are no contracts on record as of yet. Having regard to his eligibility to social welfare payments he has the following claim record:
(CLAIM RECORD WITHHELD AT THIS TIME DUE TO PRIVACY CONCERNS)
Officers from the SIU recently visited a construction site on 16/12/2014. The principle contractor is (Withheld, not JJ Rhatigan & Co.). Among those interviewed was Nicholas Ryan and he stated that he was employed by his father. He is employed as blocklayer on this site.
Mr Ryan's lack of registration for RCT and onging as well as fairly continuous receipt of social welfare lends some credence to the assertion he played a very peripheral role, if any, at the Kishoge site in Clondalkin, Accordingly, the direct line of communication and direction for the workers for whom an insurability decision is being sought may not reside with Mr Ryan.
5. FACTORS FOR CONSIDERATION
5.1 Contractual Arrangements
- A written contract did not exist for any of the workers for whom a decision on insurability is being sought on the Kishoge site during the period 26th May to 11th July 2014. According to the workers who completed forms INS 1 they were of the opinion that their employment was characterised by an implied contract of service. In the case of some of the workers they were employed as general operatives and labourers which generally are occupations not characterised or amenable to sub contraction.
- Both Stephen Gleeson and Patrick Molloy signed a written contract with JJ Rhatigan & Co. which was countersigned by Noel Cummins contracts manager with JJ Rhatigan & Co. A copy of this contract which was produced by Rob Kelly Union representative with Unite is attached. Having regard to this contract - it is more characteristic of a tender quotation rather than any formal written contract. Additionally and quite importantly it is dated 6th February 2014 and undated where the relevant parties' signatures appear. The work only commenced on this site for these individuals in May 2014. According to the workers interviewed and who completed forms INS 1 they were of the opinion that their employer during the period involved 2014 was with JJ Rhatigan & Co. rather than Messers Gleeson and Molloy. In the contest of the period 12th July to September 2014 - Mr Gleeson made the following comments:
- Mr Gleeson provided copies of his RCT notification and list of RCT payments.
- It was at the express request of Noel Cummins Contracts Manager JJ Rhatigan & Co. that the proposition that they become sub-contractors was put to them. This occurred on the 15th July 2014 following the departure of Mr Ryan and the non-payment of wages/money to the workers concerned.
- Mr Gleeson and Mr Molloy were of the impression that either they accepted that they were sub-contractors and conditions arising from the proposed arrangement or they must leave the site.
- Mr Gleeson maintains it was on this basis that he and Molloy reluctantly formed a Limited Company.
- Irrespective of any contractual arrangements expressed, purported or written Mr Gleeson maintains that it was Mr Cummins who organised controlled and directed the employment arrangements and conditions of all bricklayers and general operatives working to them on the Kishoge site. He maintains that himself and Mr Molloy were simply intermediaries and did not direct or control other workers in the performance of their duties.
- When interviewed on 4th December 2014 Mr Glesson maintained that he had never been employed as self-employed or been registered as a sub-contractor. He maintained that without his knowledge he had been registered for RCT by Nick and Patrick Ryan and that he had pursued the matter with Revenue but without success.
- It should be noted that Mr Gleeson is the subject of a SIU investigation for concurrent working and claiming Jobseekers's Allowance. In the course of a site visit on 29th May 2014 at Edenderry Community School Mr Gleeson was found to be employed whilst also claiming. The principal contractor was Sammon Construction Ltd.
- The subcontractors for block laying were Mooney & Gleeson Brick & Block Laying Services LTD. This company is registered for the following tax heads with effect from 1/09/2009- Corporation Tax, Vat, PAYE/PRSI, RCT. The Directors of the company are Michael Mooney and Stephen Gleeson. The account is (withheld).
- Further enquiries are being made into the Mooney & Gleeson Brick & Block Laying Services Ltd by Area Manager SIU Border/Midlands Bernard Fitzpatrick.
- His assertion of never being employed as a sub-contractor requires further verification and validation.
- The workers for whom the decision on insurability is being sought all regarded and considered that they were subject to direction and took their instructions from JJ Rhatigan & Co personnel as to what locations on site required block laying, when and where they worked on site They maintain that there was an expectation that they work 40 hours and their hours were usually from 7.30am to 5.00pm.
5.3 Regular Reporting
- Given the nature of the work (Block Laying) the workers were required to report on a collective and individual basis the amount of blocks laid as this ultimately formed the basis of payment.
5.4 Personal Service
- All workers maintain that they were required to provide personal service. In this regard all outcomes in relation to both quantity and quality of block laying were monitored on an ongoing basis and according to the workers by JJ Rhatigan & Co. personnel. The workers assert that they supplied labour only.
5.5 Freedom to send substitutes
- It is asserted that at no stage or juncture could substitutes be sent to undertake this work and put simply approval would not have been given by JJ Rhatigan & Co. During the period concerned none of the workers had employment elsewhere and were as far as they were concerned they were exclusively employed at the Kishoge site.
5.6 Provision of Equipment
- The only tools which these workers provided were hand tools. All other tools, machinery, plant and other facilities were exclusively provided by JJ Rhatigan. There was no significant investment by any of these workers in the provision of any equipment other than the customary hand tools associated with block laying having regard to the duties they undertook whilst employed on site. No materials were supplied by any of the workers concerned.
- As highlighted there are two distinct periods, the first period that from 26th May to 11th July 2014 where a total of 5,292 euro was paid for seven workers for this five week period. The level of remuneration for the period is prima facie not representative of the work undertaken. In the period 12th July to 1st September 2014 JJ Rhatigan paid the entity Gleeson & Molloy.
5.8 Level of Risk
- In terms of risk the workers for whom the decision is sought were not responsible for any investment, assets or exposed generally to any element of financial risk associated with this particular construction project. In their view their function was straightforwardly the supply of labour.
6. FURTHER ACTION REQUIRED
In order to further determine the insurability question it is necessary to comprehensively obtain JJ Rhatigan's & Co. version of events. In this regard, please could the following action and enquires be undertaken:
- Please could comprehensive enquiries be made with JJ Rhatigan & Co with regard to the nature and status of the employment of 14 individuals employed at Kishoge Community School Project site (Forms INS 1 appended)
- Please could INS 1 be completed for each of the 14 individuals by JJ Rhatigan and the relevant company representatives.
- In particular, could Noel Cummins contracts manager be interviewed for his comments and observations and his responses collated.
- Similarly could Sarah O'Donoghue HR department JJ Rhatigan & Co be interviewed for her comments and observations and her responses collated.
- Could all payments made by JJ Rhatigan & co to Nicky Ryan and to Patrick Ryan be inspected and recorded.
- Could details of Nick Ryan's employment and employment status be established with JJ Rhatigan & Co as to when employment/sub contraction commenced and ceased and for what periods.
- Could all payments made by JJ Rhatigan & Co to Stephen Gleeson be inspected and recorded.
- Could all payments made by JJ Rhatigan & Co to Patrick Molloy be inspected and recorded.
- Could all payments made by JJ Rhatigan & Co to Gleeson/Molloy & Co be inspected and recorded.
- Can evidence of any written contracts with Stephen Gleeson/Patrick Molloy or Gleeson/Molloy & Co be obtained.
On completion of these enquiries the position will be reviewed and further action taken as required.
In Part 2 (coming shortly), the evidence submitted in reply to these SCOPE requests which led to the SCOPE Decision that all 14 workers were employees.
(Attachments referred to above to follow)
Previous blogs on Bogus Self-employment