11/10/18 How freelance construction effects the industry

By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

A Freedom of Information request recently revealed that 1.12 million construction workers were paid via the Construction Industry Scheme (CIS) in 2017/18. A 4% increase on the figures for 2016/17, indicating self-employment is on the rise.

The subject of self-employment has been the cause of many industry discussions over the past few years, with several debates over whether freelancers are helping or hindering the industry. I think self-employed workers can help the industry by relieving companies of the pressures of meeting deadlines and recruiting new workers, however, as an industry we must ensure our whole workforce is treated fairly and with respect.

A flexible workforce is a great way for companies to meet project demands. With government targets approaching, companies need to be able to hire the right number of people, with the right skills, at the right stage of the project and using freelancers can help them to do this. Using self employed workers can also help boost productivity. With full-time employees, specialist work can be slow and expensive, whilst taking on freelancers means companies can use people with highly-specialised skills and also avoid unused downtime, which can result in huge savings on labour costs.

Sadly, false self-employment is always going to be an issue which adversely impacts individuals and, importantly, the reputation of our industry. There are a number of reasons some companies claim people are falsely self-employed; National Insurance Contributions (NICs) can be avoided and individuals can also make tax savings. However, self-employed people lose their right to sick pay, holiday pay and pension contributions which can create inequalities in the way people working alongside each other are treated.

Ask anybody from the industry and most will be able to give you an example of a contractor who has been hauled to an employment tribunal facing a claim for employment rights from a supposedly self-employed contractor. There have also been concerns about companies using the uncertainties around the rules to exploit workers, disguising the true nature of a contract and unfairly leaving the worker without proper benefits or payment. It has rightly been labelled a ‘con’ by some people, with the union Unite declaring that the government has failed to reduce such bogus self-employment which is very worrying. The rules surrounding self-employment need to be made clear and although there are a few who exploit the uncertainty, there are many who simply don’t know where they stand.

Freelance construction workers seem to be increasingly in demand, due to a ‘pay per project or task’ model now being used by many employers. Offering the chance for more flexibility and increased productivity, freelancers look set to play a vital role in the industry in the future. With nearly half of workers already being classified as self-employed, self-employment is going to have an effect on the future of the industry, therefore we must ensure the regulations around self-employment are made clear to everyone.

For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191 500 7880 or email catriona@cene.org.uk.