Labour switch "chaos" warning

Joint action by the Inland Revenue and the Benefits Agency to reclassify most self-employed operatives as directly employed is likely to push up labour costs by some 20%, according to former union boss John Flavin.

"The recategorisation of 500-600,000 operatives is the big issue in the industry at the moment and it is set to cause chaos," Flavin commented this week. "The industry needs more time to adjust to the new regime."

Flavin, who was sacked by Ucatt last year when the union scrapped its full-time executive council and now runs a training consultancy, has just launched a national campaign for the changes in employment practice to be introduced in a more orderly fashion. He is asking trade contractors to pay œ500 each to finance the campaign.

Main aims of the lobby are:

l reclassification of workers to be deferred for two years;

l reclassification to be mandatory for all firms;

l no retrospective charges regarding tax or National Insurance contributions.

"The response so far has been very good," said Flavin. "I have held three meetings with trade contractors. More than 60 attended the last meeting. "With the disintegration of the employer organisations and the unions, there seems to be no focus and no voice for the industry on this issue.

"What we are saying is that firms need more time to adjust to this major change. There is still time for reclassification to be deferred. It would make more sense for it to coincide with the introduction of the turnover tests for 714 certificates in 1998.

The ex-union leader is being aided in the campaign by Joe O'Sullivan, of solicitors Riordan O'Sullivan and Co. A letter asking for support from contractors concludes: "If there are not a sufficient number of participants to the campaign it will be aborted and your money returned."

As reported in CJ last week, John Laing has just announced that its whole workforce on the Millenium Stadium at Cardiff Arms Park will be directly employed. And all construction firms are currently reviewing their employment policies in the light of the action by the Inland Revenue and the Contributions Agency in checking the status of site operatives.

David Chapman, industrial relations director at the Federation of Civil Engineering Contractors, commented: "Some of our members would have liked a little more leeway on this. But I can't see it being deferred."