Oireachtas Joint and Select Committees

Wednesday, 14 December 2022

Committee on Budgetary Oversight

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

Mr. Andrew Lowe:

No doubt the Deputy will remind me if I miss anything that he needs me to elaborate on. I am sure Mr. Byrne and Ms O'Shea will want to feed in too.

There is a couple of aspects. I might start with the recruitment process, the employee relationship and the right to be re-employed to which the Deputy referred. The reality is on each and every project we recruit on the basis of the skills required for the job. That is the primary consideration. That goes right up and down the chain. We will start, as I described earlier, by developing the project with a writer and then we attach a director. With that director, we will identify the key creative heads of department that this director wants to work with. Typically, a director will choose a production designer, who, in turn, will have a particular construction manager he or she feels is appropriate for the job depending on the nature of the job, whether it is contemporary, a big period piece, etc. The costume designer will do the same. They will built their teams and those teams are chosen on the basis of the skills required for that particular job.

The situation the Deputy described where he asked why would one not just use the same people on every film is impractical, even if it were desirable, on the basis that crew chop and change, and go. They follow the work they are most interested in. They do not decide they are Element Pictures persons or A. N. Other company persons, and that they only work on that company's projects. They want to work with the most interesting directors who attract the most interesting casts and those are the projects they are most drawn to. That is primarily the consideration from a crew point of view.

I am aware the committee has had testimony from other organisations representing crew. Indeed, the WRC conducted an audit of work practices in the sector and talked at length about the point that the crew themselves were telling the WRC that they want to remain freelance. Freelance suits them because that allows them maximum flexibility to choose who they work for.

It is as I described earlier. The industry is organised globally on that level. Every country in the world operates in the way that I have described. There is not a single country in the world that operates in the way that the Deputy is suggesting. That is not because there is some global scheme to disadvantage workers. It is only the way the industry has evolved and the nature of the industry. It is project-specific work. People commit to doing it. It is very intense, hard work. People tend to come onto a film or a television series and see it through and then they may take time out, or they will switch and they will do something completely different. Not everyone works full time in the industry all year round anyway. They have other things going on. There is a multitude of factors at play.

The Deputy talked about the EU directive and the obligation to create a permanent pool. That is not contradicted by the freelance nature of our industry. Freelance and permanent are not mutually exclusive. We have a permanent pool of freelance crew who work in the industry. For me, the best evidence of that is people I started out with 25 or 30 years ago working in the industry when I used to work in crew are still there and they are all senior heads of department at this stage. They are the permanent pool of crew who have been created in an industry that did not exist 30 years ago. Before we had section 481 and section 35, we had no industry in this country. Section 481 and its predecessor, section 35, have helped create an industry here with a permanent pool of freelance crew who are working happily on different productions for different companies at different times.

I suggest the development test requires us to provide quality employment, not full-time jobs or Civil Service-type jobs for life.

It is fixed-term project-based work and the important thing is that, for the period that people are employed by us, they experience quality employment and career progression. They get training, where required. They are well-paid for the work they do and have satisfying work. At the end of the employment, they have a credit that helps build their careers and their CVs, opening doors for future employment. All of those things are in place. That has been a collective and collaborative effort from production companies and agencies working in the sector as a result of amendments to section 481 made in this House by the Deputy, his colleagues and Government over the years.

DACs are a commercial necessity. They predate sections 481 and 35. It is a standard business practice where multiple parties are involved in financing and completing a project, whether it is making a film or building a bridge. DACs are a vehicle through which all of the resources of the project can be funnelled and all the people working on it engaged. It is not correct to say that, as a director in a DAC, we would ever tell someone that their employment rights do not matter because the DAC is gone. As the production company, we sometimes get queries from people who worked with us six, seven, eight or ten years ago asking us to dig out a copy of their P45 or so on. We do not say that the DAC is gone. We go out to the warehouse, pull the files, find a copy of the document and send it on. During the period people are employed by the DAC, they have all their rights. In the event that they have an issue, they have recourse to industrial relations mechanisms in the same way as any other employee in the State. We have been involved in hearings at the WRC and Labour Court from time to time on behalf of companies that are no longer active. We go along anyway to provide information, to share and to respond on that DAC's behalf. I do not believe there is any evidence of any systematic problem at the WRC or Labour Court with respect to DACs that are dormant or that have been struck off. I am happy to be corrected on that but that is my experience. I have never noticed that.