Jobs switch "spells chaos"

Moves by the Inland Revenue and the Benefits Agency to reclassify most self-employed operatives as direct employees are causing "chaos and confusion" in the industry, it was claimed this week.

Brian Mudie, of the Southampton-based civil engineering firm Oliver and Mudie, told CJ: "We are getting conflicting advice about this. Hardly anyone seems to know what is going on. It's totally confusing."

Mudie supported claims that the industry has not been given sufficient time to get to grips with the labour cost implications of a massive switch back to direct employment.

"We employ around 100 subcontractors and many have been with us for seven-eight years," he said. "Their mortgages and family budgets are based on their income with self-employed status.

"I estimate the extra cost of putting them back on the books as directly employed would be 10-20%. They have told me that if I take the extra cost out of their wages they will no longer work for me.

"But I cannot afford to subsidise their wages. We are talking of at least an extra œ25,000 a month on the wages bill. That's suicidal."

As reported last week, former union boss John Flavin is asking trade contractors to put œ500 apiece towards a national campaign aimed at giving firms more time to adjust to a reclassification of their labour force.

But TGWU official Paul Chamberlain said: "People have already been getting away with this phoney self-employment for far too long. Flavin is allying himself with the worst of bad practice.

"We think the whole reclassification process should be accelerated. Any delay only means the cowboys can take advantage and profit at the expense of those firms who play by the rules."