Selfemployment and bogus selfemployment in the construction industry

1
Self-employment and bogus self-employment in the
construction industry

• Presentation EFBWW ETUI-REHS seminar Vilnius 8
  June 2007
• Sven Ljung
• Byggnads Swedish Building Workers Union

2
How is self-employment defined in Sweden?

• The Swedish National Tax Board has 3 requirements
  for approval of a tax certificate for the
  self-employed
• Independent (should work for several clients
  not just one client)
• For profit
• Durable
• National Tax Board is generous in approving
  applications.
• Applications are denied to people with a poor tax
  track record

3
Statistics and facts - self-employment in the
construction industry

• 203,700 employed in the construction industry
• 39,200 companies with 0 employees
• 20 market share
• Stable level no significant increase in
  self-employment
• Life expectancy for self-employed businesses is
  short. More challenging to be self-employed than
  most assume

4
Self-employment and collective agreements in the
construction industry?

• Byggnads only organises employed construction
  workers
• Collective agreements do not apply to the
  self-employed
• Minimum wages only in collective agreements
• No minimum wages by law
• No generally binding collective agreements
• Health safety and working hours by law

5
Bogus self-employment

• Not high on the political agenda
• Regarded perhaps incorrectly? as a fairly
  limited problem
• Boom in the construction industry may support
  direct employment
• Strong trade unions right to negotiate over the
  choice of sub-contractors
• Clear framework for tax certificate provided by
  the National Tax Office
• New legislation could disturb the picture
• What happens in the next recession?

6
Trade Union position on self-employment

• We prefer direct employment of construction
  workers
• Trade union density is 80 in the construction
  industry
• Coverage of collective agreements 95
• Currently no plans to organise self-employed

7
How do trade unions deal with self-employment?

• If a self-employed person is considered to be a
  bogus self-employed person, the trade union can
  negotiate with the employer to change the
  persons employment status
• The main contractor has an obligation to inform
  the trade union about sub-contractors
• Currently just a few disputes, mainly involving
  self-employed persons from New Member States

8
Employer position

• The Swedish Construction Federation want it to be
  easier to become self-employed
• Do not see any problems

9
Government position

• The new liberal/conservative government have
  stated that it should be easier to become
  self-employed
• Independence no obstacle just to work for one
  contractor
• New policy could be a potential threat. New
  legislation could lead to substantial increase of
  self-employed.
• New legislation could lead to difficulties making
  borderline between legitimate self-employed and
  bogus self-employed

10
Challenges ahead

• We are vulnerable to changes in legislation
• Legitimate self-employment and bogus
  self-employment as a way of avoiding collective
  agreements
• Higher degree of workers from New Member States
  may increase the problem if they are
  predominantly self-employed
• Overall, trade unions may face tougher challenges
  ahead
• The end