TED2435

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00026936 (CA-00033685-003)

BACKGROUND:

Metropolitan Films International Limited appealed the Decision of the Adjudication Officer to the Labour Court on the 24 January 2024 in accordance with Section 8 (1) of the Terms of Employment (Information) Acts, 1994 to 2014.

A Labour Court hearing took place on the 5 November 2024.

The following is the Decision of the Court.

DECISION:

Metropolitan Films International Limitedappealed a decision of an Adjudication Officer (ADJ-00026936 CA-00033685-003, dated 15 December 2023) in relation to a complaint by Jason Arkins taken under the Terms of Employment (Information) Act 1994 (“the Act”). The Adjudication Officer found that Jason Arkin’s complaint under the Act was well founded.

Metropolitan Films International Limited lodged an appeal of that decision to the Labour Court on 24 January 2024. A hearing of the Court was held on 5 November 2024. This case is linked to Decision No. FTD248.

For ease, the parties are referred to in this rest of this determination as they were at first instance. Hence, Mr. Jason Arkins is referred to as “the Complainant” andMetropolitan Films International Limited as “the Respondent”.

Preliminary Matters

The Respondent submits that the Labour Court has no jurisdiction to hear the complaint and raised several preliminary matters addressing its jurisdiction to hear the appeal.

Respondent’s Position

 (i) The Respondent was incorrectly identified by the Adjudication Officer as the employer

The Respondent was not the Complainant’s employer and is not an appropriate party to be named to the complaint. There is no evidence whatsoever of any employment relationship between the Complainant and the Respondent.

During the period 18 September 2017 to 11 May 2018, the Complainant was employed as a PAYE employee as a crew member by a separate entity, Badlands Three TV Productions DAC.

The Complainant’s employment with that entity arose within the specific context of Section 481 of the Taxes Consolidation Act 1997, as amended, which makes tax relief available for investment in film and television productions made in Ireland. Section 481 was an investor-led tax incentive scheme, and each production was required to be a standalone limited company. 

Since 2015 the legislation requires the establishment of a ‘Producer Company’ which must establish and 100% own a ‘Qualifying Company’ (e.g. a ‘DAC’). The legislation requires that a ‘Qualifying Company’ must exist solely for the purposes of producing one film or television programme.

The Respondent is a ‘producer company’ that identifies material for film/tv projects and sources funding to develop projects with writers and directors. Once a project is financed and gearing up to enter production, a Special Purpose Vehicle (‘SPV’) or DAC is established to produce that project. All employees and contractors are engaged and paid by the SPV; the entire production is run through that SPV. Typically, the credits on a film/tv series mention the name of the originating production company, not the SPV.

The Respondent submits that the international standard practice in the industry is that funding from financiers is paid directly to a SPV or DAC. Most financiers do not wish to take any insolvency risk on a producer company, and so will only contract with a newly incorporated company that is not affected by other businesses in the producer group or have pre-existing security registered over it. 

The Respondent referred to a list of companies 100% owned by the Respondent pursuant to the 2015 change in S481 legislation, which includes the entity employed by the Complainant, Badlands Three TV Productions DAC.

The Respondent submits that Section 481 of the Taxes Consolidation Act 1997 does not compromise, or oust the employment rights of workers, which remain intact against the ‘Qualifying Company’. In this case, the Complainant’s statutory employment rights always remained fully intact against Badlands Three TV Productions DAC, and it was open to him to raise any issues in relation to his employment with that entity, which is still in existence and whose company status is “normal”.

The Respondent was at no time the Complainant’s employer within the meaning of that Act. The contractual documentation makes clear that the Complainant was employed by a different entity. He was never employed by the Respondent. There is no documentation to link the complainant to the respondent. There are no pay slips, P-45 or contract of employment with the Respondent, as he was employed by a different entity.

(ii) Associated Employer

The Respondent submits that the Adjudication Officer erred in her application of the concept of “associated employer” – a concept which is specifically provided for in the Protection of Employees (Fixed-Term Work) Act 2003. The term “associated employer” is simply not contained in the Terms of Employment (Information) Act and there is no legal basis for its use in this case.

In referring to Badlands Three TV Productions DAC as an “associated company” of the Respondent, the Adjudication Officer incorrectly conflated the concepts of companies which may be associated corporate structures with separate legal personality, on the one hand, and the “associated employer” requirement of multiple employers who are themselves associated.

Furthermore, the interpretation by the Adjudication Officer of the term “associated employer” is entirely at odds with the express mandate and intention of the Oireachtas in enacting Section 481 of the Taxes Consolidation Act 1997. The Adjudication Officer erred in making a mistaken value judgment as to what constitutes “quality employment”, and having made that error wrongly allowed it to influence her conclusion as to who the Complainant’s employers properly were.

(iii) The Name of the Respondent on the Complaint Form 

In the alternative and without prejudice to the foregoing, the Complainant did not file a valid complaint against the Respondent. The Complainant submitted his complaint under the Act against another entity and the Adjudication Officer exceeded her jurisdiction in amending the name of the party against whom the complaint was brought.

The Adjudication Officer concluded that the Complainant was an employee of Metropolitan Films International Limited, that he had made an error in the naming of the Respondent, and that she had jurisdiction to correct this error under s. 41(16) of the Workplace Relations Act 2015.  

The Respondent submits that in so doing the Adjudication Officer erred in law. 

(iv) The Relevant Limitation Period 

In the alternative and without prejudice to the foregoing, the complaint was lodged to the WRC on 10 January 2020, outside the prescribed statutory limitation period. 

The Complainant’s contract of employment came to an end on 11 May 2018. The complaint is statute barred and the Adjudication Officer’s conclusion that the Complainant was on lay-off was factually and legally incorrect.

Evidence of Mr. David McLoughlin

Mr McLaughlin is a Director of Metropolitan Films International Limited since March 2024. He is a Director of Badlands Three TV Productions DAC since February 2022.

Mr McLaughlin told the Court that, in his role as Director, he is familiar with the books and records of Metropolitan Films International Limited. Those records contain no reference to any contractual relationship with the Complainant, as he was never employed by Metropolitan Films International Limited. Mr McLaughlin said that he was also familiar with the books and records of Badlands Three TV Productions DAC. He confirmed that the Complainant was employed by that entity.

Mr McLaughlin said that employees are not employed before a qualifying company is established. The employment relationships come to an end once a production is over. The producer company does not pay the wages of workers in between productions. Workers can seek employment elsewhere on another production or with another producer company. Such practice is normal in the industry and workers have freedom to move to other productions or to work abroad.

Under cross examination, Mr McLaughlin said that the Complainant did not transfer employment from one DAC to another within the Metropolitan Films Group, as the Complainant was employed by the DAC and had no employment relationship with the producer company. He did not have any paperwork in relation to previous qualifying companies, as these were dissolved.

Mr McLaughlin accepted that Badlands Three TV Productions DAC is an accounting tool and that funding for the qualifying company came from the producer company. The funding is transferred to the qualifying company for the purposes of expenditure The producer company secures funding, and the qualifying company is responsible for the expenditure which provides transparency for revenue purposes. The producer company does not pay the wages of any employees of the qualifying company. The qualifying company complies with all employment legislation and is wound up only when employment relationships have ceased. Productions do not last for more than two years. Where a second season is commissioned, a separate DAC is established. In his view, there were approximately 20 active producer companies in Ireland, with between fifteen and twenty DACs in operation at any given time.

Summary of the Complainant’s Submission

The correctly named Respondent was enjoined on the appeal form. The Respondent’s claim that it is not the employer of the Complainant is vexatious, frivolous and lacks foundation.

The film production sector is both State and EU regulated. State regulations are set out in Film Regulations SI 119/2019. The Regulations place the primary responsibility for the employment relationship on the producer company. A qualifying company is set up for the expressed purpose of making the qualifying film for which certification is issued to the producer company. This is a Revenue requirement to ensure that public money is ring fenced.

The Film Regulations determine the employer as follows: “film group” means the producer company, the qualifying company and all businesses that are regarded as partner or linked businesses of either company. For the purposes of the Regulations, the qualifying company must be a 100% wholly owned subsidiary of the producer company.

The Complainant was employed on continuous and successive fixed-term contracts issued in the names of various qualifying companies incorporated by the same producer company Metropolitan Films International Limited since 2009. He moved seamlessly from one film production company to another for nine years. His terms and conditions of employment were set out in a Collective Agreement for those 9 years signed by a director of the Respondent Producer Company.

The qualifying company in this case, Badlands Three TV DAC, is a 100% wholly owned subsidiary of Metropolitan Films International Limited. The Annual Accounts of each confirm this position. The employer in this case is one and the same. All other qualifying companies save for Badlands TV Three DAC have been dissolved in line with the requirements of the Film Regulations.

In 2018 all Crew including the Complainant were laid off on the basis of LIFO. The employment records in respect of the Complainant were held by the Respondent. When the Complainant sought copies of his data from the Respondent, he was informed that there were no records held in relation to him, even though the name of the qualifying company is listed in the “film group”.

The Complainant is entitled to the statutory protections of employment legislation. Obligations set out in both the Film Regulations and the EU Communication must be met by a producer company as the qualifying company does not survive delivery of final accounts to the Revenue Commissioners. When the producer company submit a successful application and the qualifying film has been certified the relief is paid, by the Revenue Commissioners, to the producer company. Only the producer company can meet the objectives of the legislation and Regulations. The Revenue requirement to set up a qualifying company does not absolve the producer company from its legal obligations.

The Relevant Law

The 1994 Act defines ‘employee’ as follows in section 1:

“employee” means a person who has entered into or works under (or, where the employment has ceased, entered into or worked under) a contract of employment and references, in relation to an employer, to an employee shall be construed as references to an employee employed by that employer; and for the purposes of this Act, a person holding office under, or in the service of, the State (including a member of the Garda Síochána or the Defence Forces) or otherwise as a civil servant, within the meaning of the Civil Service Regulation Act, 1956, shall be deemed to be an employee employed by the State or Government, as the case may be, and an officer or servant of a local authority for the purposes of the (as amended by the Local Government Reform Act 2014), a harbour authority, a health board or an education and training board shall be deemed to be an employee employed by the authority or board, as the case may be;

The 1994 Act defines ‘employer’ as follows in section 1: 

“employer”, in relation to an employee, means the person with whom the employee has entered into or for whom the employee works under (or, where the employment has ceased, entered into or worked under) a contract of employment subject to the qualification that the person who under a contract of employment referred to in paragraph (b) of the definition of “contract of employment” is liable to pay the wages of the individual concerned in respect of the work or service concerned shall be deemed to be the individual’s employer; 

Deliberations and Findings

Both parties confirmed to the Court that they were satisfied that they had an opportunity to present all relevant submissions and witness testimony at the hearing.

The parties made comprehensive submissions about the nature of the industry within which they operate and the relevance of Section 481 of the Taxes Consolidation Act 1997, as amended in terms of securing funding. The Court is a creature of statute, and its jurisdiction is confined to the application of the Act to facts that are established in each case. It is not the function of the Court when considering a complaint about a contravention of the Act to express general views on the nature of employment in an industry or the operation of company or revenue law.

The Respondent raises several preliminary matters relating to the Court’s jurisdiction to hear the within appeal.

The burden of proof rests with the Complainant to establish in the first instance that he was an employee of Metropolitan Film Productions Ltd for the purposes of the Act.

It is accepted that the Complainant was employed by Badlands Three TV Productions DAC, which is an entity that is 100% owned by Metropolitan Films InternationalLimited.

The Respondent’s position is that Complainant was never employed by Metropolitan Films InternationalLimited. It contends that Badlands Three TV Productions DAC is an entirely separate entity to Metropolitan Film Production Ltd. At no time was the Complainant ever engaged or employed by Metropolitan Film Production Ltd and no record of an employment relationship exists between the parties.

The Complainant’s representative confirmed to the Court that no documentation existed to support the assertion that the Complainant had ever had any contractual relationship with Metropolitan Film Production Ltd. The documentary evidence before the Court, corroborated by Mr McLoughlin’s sworn oral evidence, confirms that the Complainant was employed by Badlands Three TV Productions DAC as a PAYE worker.

There is no evidence before the Court, documentary or otherwise, that supports the Complainant’s assertion that he was employed at any time by the Respondent. There is no evidence of the existence of any contract of employment between the Complainant and the Respondent having come into being at any point in time.

Rule 52 of the Labour Court Rules 2022 provides that the Court may, at its discretion, give a preliminary ruling on any aspect of a case where it is satisfied that it has the potential to be determinative of the case.

Having regard to the above, in circumstances where the Court has found no evidence that Metropolitan Films International Limited was the employer of the Complainant, the Court determines that it has no jurisdiction to hear the substantive matter. As a result, it is not necessary for the Court to determine the other preliminary matters in relation to the Court’s jurisdiction to hear the appeal.

Decision

The Court finds that the Complaint under the Act is not well founded. The Decision of the Adjudication Officer is set aside. The Court so decides.

	Signed on behalf of the Labour Court
	Katie Connolly
AR	______________________
11th December 2024	Deputy Chairman

NOTE

Enquiries concerning this Decision should be addressed to Aidan Ralph, Court Secretary.