Thursday, 14 February 2019
Ceisteanna Eile - Other Questions
Film Industry Tax Reliefs
10. To ask the Minister for Finance if a progress report will be provided on his plans to ensure the requirement to provide quality employment and training as a condition for receiving section 481 tax relief will be met by the film producers receiving the relief and, in particular, his acknowledgement that compliance with this condition should require, as a minimum, compliance with the legal protections for workers; the sanctions or penalties which will be imposed on recipients of or applicants for the tax credits that breach the rights of workers or that fail to provide the required quality employment or training; if the penalties will include immediate disqualification from entitlement to the section 481 relief; and if he will make a statement on the matter. [7278/19]
As the Minister knows, I have raised the issue of the connection between section 481 tax relief and rights for workers and trainees, and the condition attached to this relief to the effect that the film production companies to which it is given should provide quality employment and training. The Minister has stated, rightly in my opinion, in reply to previous questions that it should be defined, as a minimum, as compliance with the law on workers' rights and employment legislation. Will the Minister give us an update on how we will ensure this is happening and ensure compliance with the rights of employees is actually being applied the film industry?
Revenue is bringing forward the regulations necessary to support the amendments to which the Deputy refers. The Deputy met officials to discuss these matters and I can confirm that relevant Labour Court interventions raised have been considered as part of these preparations. Officials from Revenue have also been working with the Department of Business, Enterprise and Innovation on the employment obligations of the producer company and qualifying company for section 481 claims. The regulations must be made with my consent and that of my colleague, the Minister for Culture, Heritage and the Gaeltacht. Officials from both Departments are reviewing the drafts of these regulations.
I genuinely welcome the progress and the engagement but I am keen that we make this watertight. One question I want to ask is whether sanctions will be applied. I have the details of one of the cases to which the Minister's attention has been drawn. It involves a ruling on four or five items of legislation. A complaint was made by a trainee assistant film director to the Workplace Relations Commission against Christchurch Productions. In all cases, the production company was found to be in breach and a fine was imposed. I have been informed that fine has never been paid. As I understand, the producer behind the company is still getting section 481 tax relief. If this is the case, what is the point of having these rules and regulations? What is the point of having conditions attached to film relief if we continue to give it out? I know the Minister is examining this but we need to move to a situation where it is made absolutely clear to these producers that they will not get a cent more of public money unless they comply with the law. There should be a serious question over whether they get any money if they have been shown to be in breach. I do not understand why this would not happen.
Something that needs to be clarified is the relationship between the producer company that gets the money and the special purpose vehicle, SPV, because often the producers will state the SPVs have nothing to do with them and they are not the employer and have no obligations. When they try this line of argument, the Minister needs to state that if they are in receipt of money from the Government, they are responsible for the employees.
I have already acknowledged to the Deputy, when debating the Finance Bill, my belief that there should be a link between the State making resources available to a particular company through tax expenditure for the provision of employment and being confident that such employment is provided and that there are no repeated issues regarding the nature of the employment and its compatibility with our laws. Where I differ with the Deputy - and he and I have debated this previously - is that I believe the sector, by its very nature, has different employment practices. My sense is we should have different expectations regarding what people's careers can look like and the nature of the employment because, by its definition, it is project to project. Broadly speaking, I want to ensure section 481 is in operation and that I can be confident it is not being used in such a way that is incompatible with the laws of our country. This is why I have taken an interest in this, which the Deputy has acknowledged. I have touched on the work under way by officials in the Department of Finance and Culture, Heritage and the Gaeltacht to see whether we can find a way of getting a balance on these issues. I hope we can make progress on it.
Construction is project to project but the law applies. The legislation relating to fixed-term work applies. Developers cannot dodge their obligations to employees on the basis that it is project to project. Animation is project to project but there is some security in it. It is also an audiovisual industry and companies are in receipt of section 481 but these problems do not arise. In the context of live action film, a plea is being made by the recipients of large amounts of public money that the industry is exceptional and that these laws cannot apply to them. They need to be told that they do apply, that the law is the law and that there is no derogation. Perhaps the Minister will confirm there is no derogation for film, as I understand it, regarding the fixed-term work legislation. It needs to be made absolutely clear to the people who receive public money this is the case, that other employment legislation applies and that the definitions of who is an employee and employer must apply to them also. They cannot state the law does not apply to them.
The issue of how employment law is applied in various sectors is, as the Deputy might appreciate, a matter for the Minister for Business, Enterprise and Innovation and, therefore, I am not in position to answer the Deputy's question. As already stated, where we differ is that I do not believe the availability of tax relief for projects is likely to address all of the issues he has raised. It appears that there are issues regarding the nature of the industry and the application of employment law that need to be dealt with elsewhere. What I am trying to do is ensure the availability of this relief is tied to ensuring that it achieves the objectives it is designed to achieve. The officials have not yet come back to me with the draft regulations but they will do so soon. I hope to be in a position then to sign the regulations into law and see how they are implemented.