Willie Penrose (Westmeath, Labour)
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Question 52: To ask the Minister for Social and Family Affairs the reason the Turkish construction firm Gama received a Government exemption from paying millions of euro in PRSI contributions here over recent years; the number of PRSI exemptions that were granted to Gama; the value of these exemptions; and if he will make a statement on the matter. [17241/05]

Séamus Brennan (Dublin South, Fianna Fail)
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A total of 1,416 PRSI exemption certificates have been issued to Gama since 2002. The certificates were granted under regulations which provide for exemptions from PRSI contributions for up to 52 weeks per year to be granted to employees not ordinarily resident in the State but who are temporarily employed here. The purpose of the legislation is to enable workers sent by their employers to work for temporary periods in another country to remain subject to social insurance in their own country. Similar arrangements apply under EU legislation to workers moving within the EU and to workers covered by bilateral social security agreements with Ireland.

When a request for an exemption certificate is processed, a signed declaration is obtained from an employer to confirm that the person for whom the certificate is being sought has been retained in the social insurance regime of his or her home country while working in Ireland. The procedure is intended to confirm that an employee has been posted and is covered for social insurance in his or her home country while covered by an exemption certificate in Ireland. In randomly selected cases, independent confirmation is sought from the authorities in an employee's home country that social insurance payments have been made during the period covered by an exemption certificate. This control complements an employer's declaration that an employee has been retained in insurance cover in his or her own country.

In the case of Gama, a random sample of exempted cases has been referred to the relevant overseas authorities via the Department of Foreign Affairs to confirm that the employees involved have been retained in their home country's social security regime during the period of the exemption. Efforts continue to confirm the status of the workers in question. Granting of an exemption certificate is linked to the existence of a valid work permit which confirms that the employee is not ordinarily resident in the State and is entitled to work here.

The value of exemptions to Gama cannot be quantified by my Department. Information on the wages of workers for whom exemption certificates are sought is not a requirement of the application process. It is, therefore, not possible to calculate the amount of PRSI which would arise if the exemptions had not been applicable. The workers in question remain subject to social insurance in their home countries during the period covered by the exemption certificates.

The needs of the Irish economy have changed significantly since exemption legislation was originally enacted. There have been significant changes in working patterns and skill levels while the enlargement of the European Union has also affected the labour market. Against this background and having regard to the circumstances of the matter in question, I have commissioned a review of the policy and legislative provisions on exemption certificates of my Department. I will bring forward any necessary measures to change the current arrangements in light of the review.

Willie Penrose (Westmeath, Labour)
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The treatment of Gama workers represented one of the most shameful episodes of the systematic exploitation of workers in the history of the State. The failure to put in place measures to enforce our labour laws to prevent such outrageous exploitation represents a shocking failure of the Minister and former Minister for Enterprise, Trade and Employment, Deputies Harney and Martin. The treatment by Gama of its workers was, simply, shameful. That Gama has been allowed to run rings around the institutions of the State has exacerbated the entire matter.

A company at the centre of an alleged worker exploitation scandal has been granted an exemption from paying social insurance for more than 1,400 employees for three years. Gama received three quarters of all PRSI exemptions granted over the past three years. Of approximately 1,900 exemptions granted, Gama received more than 1,400. The Minister said a random selection process applied to checks of the exemptions. Irish employers must look askance at such provisions as they are subject, rightly, to detailed examination. What efforts has the Department of Social and Family Affairs made to confirm that social insurance payments were being made in Turkey? Will we ever know the value of these important exemptions? Do we know what PRSI would have been payable had exemption certificates not been granted?

It appears the Exchequer may have lost many tens of millions of euro in PAYE and PRSI deductions in respect of Gama's employees. Many Irish firms which must take on direct employees on a sub-contracting basis are at a severe competitive disadvantage to an employer which, like Gama, can, in effect, opt out of the Irish PAYE and PRSI systems. Is the Minister concerned? When can the House expect the legislation framework which underpins the exemptions to be updated to ensure that a scandal like the one which has been brought to the fore by my colleague, Deputy Joe Higgins, for which he is to be complimented, and pursued by my party leader, Deputy Rabbitte, will not happen in the State in future? It is an indictment of us all that these events took place.

Séamus Brennan (Dublin South, Fianna Fail)
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The total number of exemptions issued since 1998 is 2,449. Of these, Gama received 1,416. The reference to a random sample was made in respect of the Department's approach in contacting authorities overseas. The Department decided to take a random sample of 40 of Gama's 1,416 employees but, disappointingly, has yet to hear from the social security ministry in the country concerned. We will follow up the matter to ensure we receive a response.

It is important not to leave the impression that exemption from PRSI represents a loss to the Exchequer. The system also works in reverse. Where an Irish company is working abroad, it does not pay PRSI in respect of its Irish employees if it is confirmed that it is being paid here. The principle is that a company pays PRSI in one country or another, but not in both. This system has been in place for decades — it is not a recent measure — to avoid double taxation.

I have a copy of the inspector's report commissioned by the Minister for Enterprise, Trade and Employment. My Department is examining it very carefully to determine whether breaches of social welfare legislation have taken place. It should be noted that the purpose of the exemptions system is to ensure that people do not get caught for PRSI in more than one country. We seek to ensure that no one slips through the net.

Séamus Pattison (Carlow-Kilkenny, Labour)
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That concludes Priority Questions. We now come to Other Questions.