Dáil Éireann Debate, Thursday - 28 April 2022
15. Deputy Richard Boyd Barrett asked the Minister for Finance if he is proposing any further reforms to section 481 film and tax relief to protect the employment status and rights of workers in the film industry, particularly given that production companies in receipt of this relief are abdicating their responsibility in this regard; and if he will make a statement on the matter. [21448/22]
Amharc ar fhreagraI do not know what the latest figure is but in some years we give out between €80 million and €100 million in section 481 film tax relief. It is supposed to be about developing an industry and industry capacity but, time and again, when workers on film productions take cases to the Workplace Relations Commission, WRC, or try to assert their rights under the Protection of Employees (Fixed-Term Work) Act 2003, the film producers who get the section 481 relief go into court and say they could have no possible employment relationship with those workers. This is not acceptable.
I thank the Deputy for raising this issue. The section 481 tax relief provides a 32% payable credit for eligible expenditure on film production in Ireland. The expenditure has to be incurred in Ireland, meaning the benefit of the jobs and employment is here in Ireland. Historically, there was a situation where some of the expenditure did not have to be incurred in the State so the benefit was not accruing to people in employment in the State but that is no longer the case. The scheme is intended to act as a stimulus to the creation of an indigenous film industry in the State, creating quality employment opportunities and supporting the expression of the Irish culture. It is the expectation that the provision of such opportunities will be compliant with all applicable employment obligations, including legislative obligations and policies and procedures to ensure dignity at work.
To grow the industry in Ireland, we want quality and sustained employment and training opportunities in the sector. This is reflected in the undertaking of quality employment, which is required to be signed as part of the application process for section 481. I stress that the quality of employment undertaking must be given. There has been good progress over the last two years in negotiations between employer and worker representatives in the sector. For example, from January 2021 a modernised crew agreement was introduced which promotes good practice, regularises evolving work practices and provides for an industry pension scheme operating under the construction workers pension scheme. That is a very important development because many people may not be employed on a full-time basis and may be moving from employer to employer. It is very important that that is now there but it has only been in place since the beginning of last year. A monitoring structure to oversee the operation of the scheme is included, as is a commitment to developing the first work-life balance policy for the film and television industry. The agreement acts as a framework for the industry, covering all grades except film construction. I understand discussions are ongoing with a view to reaching an agreement covering film construction workers. Department officials will continue to monitor progress in this regard.
On account of the campaigning of film workers, and issues I raised with the Minister, an undertaking was brought in that requires compliance with the relevant employment legislation. Specifically, and probably most important, it requires compliance with the Protection of Employees (Fixed-Term Work) Act, which means the people employed gain recognition of service. Under the operation of the law, they can gain contracts of indefinite duration even though the work is episodic. However, the employers are signing the Government's declaration and then completely refusing to acknowledge those rights for workers. They are making fools of the Government. The head of Screen Producers Ireland, SPI, who the Minister of State says is negotiating an agreement, gave evidence to the court stating there was no possible basis, having due regard to the realities of the sector, on which a relationship of employment could be said to have existed between the parties. That was on the basis of the clearly established industry norms of practices governing working arrangements in the sector, including section 481. The employers who sign that undertaking and get the film tax relief are saying they cannot have employees. How can there be quality employment and training when they are saying they have no employees?
With regard to any specific workplace disputes, including the accusation of the abdication of any duty that befalls the company by law, the Workplace Relations Commission and the Labour Court are the organs of the State tasked to deal with the resolution of such matters. It is appropriate that any relevant claims be referred to those bodies for adjudication. There are no immediate plans in place to amend the section 481 legislation at this time. The film regulations provide that the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media can set conditions relating to the employment when issuing a certificate for a qualifying film. The regulations stipulate that these conditions are to be met not just by the producer company but also by the qualifying company, a designated activity company, DAC, wholly owned by the producer company solely for the purpose of making one qualifying film. This is done on a film-by-film basis.
Obviously, the Minister, Deputy Donohoe, is more familiar with this matter. These companies are flouting the regulations. They are flouting them openly. They are signing the undertaking and then doing the exact opposite. Not only are they doing the exact opposite, they are saying there is no basis on which they can have employees. How can the Government give people tens of millions of euro, purely on the basis of creating quality employment and training, when those same people say publicly they cannot have employees? Does the Minister of State get the point? There are no employees. There are no rights. These companies can hire and fire people at will and nobody acquires any rights, even though the money the Government gives them is conditional on giving those rights and signing an undertaking. The companies can blacklist, victimise or penalise people. Anybody they do not like does not get on the next film production and has no recourse because the companies hide behind this DAC, even though the money is not given to the DAC. The money - public money - is given by the Government to the film producer, which then says it has no employees.
Should a producer company or qualifying company fail to adhere to a condition or obligation specified, the certificate granted by the Department may be rendered invalid and any credit claim may be subject to recoupment by Revenue under section 481. The companies must comply with that.
They are not complying with it. Nobody is enforcing it.
There can be a serious financial penalty. Maybe that has not happened because some of these regulations or new rules only came in last year. Ultimately, Revenue makes the final call on this and it has to be satisfied that all these conditions are met before it, on behalf of the taxpayer, hands out the money. The DAC is required to remain in legal existence for at least 12 months post the completion of the production. A number of cases have recently been taken to the WRC against production companies but they have failed due to the claims being undertaken outside the period allowable for such cases. It is important that the cases move quickly. There is only a legal obligation for the company to remain in existence for 12 months.
Some of the companies do not make a film for another year-----
Yes, but-----
-----and then they are statute-barred.
The company is in existence for 12 months after the completion of the production. That is the period of time in which the case must be taken.
It is a joke.
Deputy Boyd Barrett will be on his feet again for this next question but we are running out of time.
