Is this legal?

I have a client who is a subbie in the construction industry but has recently been taken on the books by a UK registered Ltd company. His wages less PAYE are being supplemented by a dividend paid from an Irish registered company with no tax deducted. The dividend is higher than his gross wage.

I cannot see how this can be legal from a tax point of view. 

Any thoughts and what would you do next? Report the company to the IR? Tell the client to find a new job of which there aren't many. Could he be liable for more tax?