Oireachtas Joint and Select Committees

Wednesday, 14 December 2022

Committee on Budgetary Oversight

SBO Tax Expenditures: Film Relief Section 481 Tax Credit (resumed)

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I thank the witnesses for coming in. Sorry for the delays caused by the voting in the House.

I will start with the final point that Mr. Lowe made, namely, that he would like us to consider increasing the cap relating to the level of investment that the State is willing to put into films. I would be happy to agitate for increased investment. In general, I am in favour of us spending more on arts, cultural endeavours and film. I do not think we spend enough. I am sure Mr. Lowe is aware that my enthusiasm for arguing for those things would be considerably blunted by my concerns about the extent to which the film producer companies, such as Element Pictures, which are in receipt of section 481 tax credits are complying with the requirement for quality employment and training as set out in the legislation and required under EU state aid rules. Those rules are clear that there is a requirement to meet an industry development test and a cultural test. Part of that industry development test is having quality employment and training. The EU directive is even more specific. I will paraphrase it. It is about creating a permanent pool of skills and uses that type of phrasing.

My concern is that the section 481 tax credit is not doing this at all. Instead, as Mr. Lowe stated, the people in the industry work freelance as opposed to having permanent jobs. The industry operates project to project. Very few, if any, people have any kind of security regarding their place in it. For some reason that I do not understand, the producer companies insist that they do not want to give any rights to employees to have a legitimate expectation from one production to another that they will be employed in the future. I do not see why the producer companies want to insist on that position. I do not see how it is beneficial to the creation and growth of an industry.

Surely developing and nurturing a crew and giving them security would be good for the industry? It would be good for attracting more investment and would be better at every level for the cohesion, skill and expertise of the industry if people were given security from production to production. Instead, it seems that producer companies, including the witnesses' company, insist trenchantly that they do not even have an employment relationship with the people who work with them again and again. The witnesses can tell me if I am wrong, but my understanding is that this is precisely what is going on. Some crew members would have worked on multiple productions that Mr. Lowe named, one after the other, going back to when Element Pictures was set up in 2001. Those people would argue, and I would agree with them, that they have those rights under the legislation for fixed-term workers, which Mr. Lowe referred to, and under the European Union directive.

However, the producer companies want to insist that they do not have any employees who are entitled to such contracts of indefinite duration. I stress that nobody is suggesting that that means companies would employ people permanently, full-time, for 365 days. Nobody is arguing that, but they would have a legitimate expectation and right, having worked on "Ripper Street" seasons 1 to 4, to be re-employed and notified that the company is making a film when Element Pictures next makes a film. The company would tell them that they have worked on its last few films and it is now letting them know that a job is available for them on the next film. Instead, Element Pictures insists it has no obligation to them. I will not go into individual cases but, in general, when employees take cases to the Labour Court or WRC, the response of the film producer companies is to deny any employment relationship whatsoever with these people, even though they know them. The companies know that people worked on the films or television series, but they say they do not have an employment relationship with those people, just that those people have an employment relationship with a DAC that no longer exists. I want to understand why companies want to do that.

I put it to Mr. Lowe that this is in breach of the Protection of Employees (Fixed-Term Work) Act 2003, the purpose of which is to prevent the abuse of successive fixed-term contracts. The point of the legislation is that one cannot keep employing the same people repeatedly on fixed-term contracts but if one keeps employing them repeatedly, one starts to have an obligation to them as an employer. Why would Mr. Lowe not want to do that?

I was not aware that the section 481 guidelines state that the producer company, not the DAC, is allowed charge the cost of full-time employees to the DAC. They are allowed do it, and it specifically uses the phrase "film crew". I presume Element Pictures charges for some of its administrative employees to the DAC and section 481 pays for that, yet Element Pictures does not want to do it for film crew even though they are explicitly mentioned in the section 481 guidelines as persons whom it could charge to section 481 under the DAC. Element Pictures could charge and have them as employees. That is quite a long question but Mr. Lowe will get the point. I would appreciate an answer.

I want to ask about the intellectual property end of it. Maybe I should do this separately or do them altogether.