Chatham and Aylsford MP Jonathan Shaw claimed Amec, Alfred McAlpine, Hochtief and Norwest Holst had turned a blind eye to breaches of employment regulations by subcontractors.
Shaw, speaking during a parliamentary debate on construction workers' rights, claimed that the practice was industry-wide.
He said: "Bogus self-employment is used by contractors and subcontractors to fiddle tax. It prevents workers from obtaining their basic rights and is costing the exchequer billions in unpaid national insurance."
Shaw alleged that bad practices such as bogus self-employment and refusal of holiday pay and other benefits was rife. Shaw said CTRL subcontractors employed workers on short contracts that left them ineligible for benefits.
He also claimed that firms forced workers to register as self-employed, so avoiding tax and national insurance obligations, when they should have been taken on the payroll as ordinary workers.
Shaw claime d that the Inland Revenue had failed to police its tax scheme. He said: "Up to now 800 000 CIS forms have been handed out. They are given out like confetti. There is little checking by the revenue."
Construction minister Beverley Hughes rejected the allegation that self-employment was rife.
She said that since 1996 the number of employed staff had risen and was now twice that of self-employed workers.
Brian Rye, regional organiser for construction union UCATT, who wrote to local MPs about the issue in July, backed Shaw's claims. He said: "We have been talking to Rail Link Engineering, the consortium behind the scheme, its parent Union Railways, and the contractors for 18 months and we are still no further on."
Contractors responded to the claim by referring all queries to the client, CTRL. A CTRL spokesperson said employment rights were the responsibility of contractors. He said: "The principal contractors and their subcontractors on CTRL have total responsibility to ensure that they comply with all relevant employment legislation."
Shaw also alleged that a subcontractor, Buildstone, on Taylor Woodrow's PFI hospital in Bromley, was abusing employment rights. Rye said Buildstone were being taken to an industrial tribunal over holiday pay in the New Year.
Taylor Woodrow was unavailable for comment.
