HC Deb 31 January 1966 vol 723 cc682-3
50. Mr. Heffer

asked the Minister of Labour what action he has taken in regard to those building trades employers who have forced building operators to become self-employed, thereby circumventing the Redundancy Payments Act.

Mr. Thornton

I would draw the hon. Member's attention to a statement my right hon. Friend issued on 3rd January in the case of a Bournemouth firm. With permission, I will circulate this statement in the OFFICIAL REPORT.

Mr. Heffer

I thank my hon. Friend for that statement. Would he not agree that the attitude of the employers concerned was utterly disgraceful and that the sort of attitude they adopted does not help better relations in the building industry? Will he give an assurance that the strongest possible measures will be taken against any other building employers who take, or try to take, similar steps to avoid redundancy payments?

Mr. Thornton

I deplore the action taken by the building firms in question, although it is only fair to say that overwhelmingly the employers have observed their legal obligations under the Act. I hope that my hon. Friend will closely examine my right hon. Friend's statement. Then he will see that the opposite effect from that expected by the building contractors concerned might take place.

The statement is as follows:— My attention has been drawn to Press reports of a Bournemouth building firm which is said to have made all its workers self-employed in order to avoid possible liability for payments under the Redundancy Payments Act. I have previously stated, in connection with another recent case in the construction industry in the Midlands, how much I deplore attempts to defeat the purpose of legislation which is supported by both sides of industry. I should like to make it clear that it would be quite wrong to assume that the manoeuvre which is alleged to have taken place in the present case will in fact achieve the purpose the employer is said to intend. I am advised that it cannot be assumed that action of the kind reported will have the effect of making the workers self-employed in law. This would be a question for determination by the tribunals dealing with disputes under the Act, or on appeal from them by the Courts, if a claim for a redundancy payment were made at some time in the future by one of the workers concerned. It is possible on the other hand that the employer could become liable for a redundancy payment immediately if it were held that his action in making a worker self-employed had effectively terminated the worker's contract of employment. I trust the employer in this case and any others who may be contemplating similar action will take note of the position and will fulfil their proper obligations under the Act, as employers generally are doing.