Icon Accounting represented the PSCO at the European Forum of Independent Professionals (EFIP), Munich, Germany

Gerard Kiernan, Managing Director of Icon Accounting and founding member of the PCSO (Professional Contractor Services Organisation) represented PCSO and Ireland at the European Forum of Independent Professionals (EFIP). Gerard was invited to give a presentation on the current situation for Professional Contractors in Ireland and the issues that we are facing.  This took place in Munich, Germany on Tuesday 5^th of November

Gerard was also asked to present to the Public discussion of False Self-Employment and on the PCSO’s proactive proposals, along with other EU member states on ways to tackle this issue. This was held by our German associate VGSD in Presse Club Munich on same date.

Measures against False Self-Employment Often do More Harm than Good

Independent professionals from nine EU-states discussed better solutions to stop false employment in Munich

On Tuesday the European Forum of Independent professionals (EFIP) together with its German member association VGSD has staged a public discussion in Munich on the topic of false self-employment. Speakers from nine countries explained the criteria for false self-employment in their countries, the consequences and top issues. Munich was chosen, because the German minister for employment is about to publish a draft law with much stricter rules against false self-employment. Professor Patricia Leighton, author of “The Rise of Europe’s Independent Professionals” moderated the event.

The discussion showed that in almost all EU states (as well as in Brussels on EU-level), unions demand stricter legislation against a presumably growing number of involuntary self-employed.

Existing criteria against false self-employment are often so vague, that neither the self-employed nor their clients can be sure, that contracts will not be questioned subsequently.  Insecurity is further increased by extremely high penalties - often threatening the existence of the self-employed or their client.

Instead of achieving a better social protection for the self-employed, the laws makers it more difficult and risky to give contracts to the self-employed which can threaten their business.

Solutions developed in Netherlands, Ireland, Italy, France and Sweden

A pragmatic solution was developed by the Dutch government. Five percent of freelancers in the Netherlands are supposed to be false self-employed. If political decisions are on schedule, as of April 1st, 2016 a new law will bring clarity between the ordering party and contractor. No unexpected payroll taxes will have to be paid. Real self employed can avoid false self employment, if they use certain model contracts cleared by the financial authorities.

Denis Maesen from the PZO-ZZP association about his talks with the Dutch government: “A breakthrough was reached, once we started to talk about the 95 percent of real self-employed and how to give legal certainty to them and not only about the five percent false self-employed.”

In Ireland another pragmatic solution has been proposed by the PCSO. We propose that Self-Employed Independent Professionals (IPRO’s)  can declare their status in a document, that they compile with the help of their tax consultant. They state in it, that certain verifiable conditions are fulfilled, that they know all consequences of their self-employment and that they take responsibility for paying tax and social security. This document is recognized and registered by public authorities and simplifies the acquisition of contracts from larger clients considerably.

Substantial changes are planned in Italy as part of far reaching reforms in the country. Self-employed with yearly incomes above living wages or with certain higher qualifications (e.g. certain liberal professions) are exempt from being chased as false self-employed – again simplifying their acquisition efforts considerably.

In France and Sweden lawmakers offer a choice of legal frameworks to the iPros, within which they are safe from prosecution and fear of high retrospective payments.

The UK Association for Independent Professionals and the Self-Employed – IPSE – has put forward a proposal to create a new company structure that would clarify the tax and employment status of iPros.

The international comparison shows, that there are pragmatic solutions that succeed in giving legal security to the real self-employed while preventing false employment at the same time.

The key to such creative solutions is, as became clear in the discussion, that the political dialogue is not only held with labour unions, that represent the interests of involuntary self-employed, but also with speakers of the real self-employed. Both groups have legitimate interests. Only if they are given equal consideration, a permanently feasible solution can be developed.

More information on EFIP and Freelancers in Europe can be found on these websites - http://freelancers-europe.org/  &  http://www.efip.org/