Media

RTÉ faces rising tax bill to settle status of hundreds of workers

Broadcaster set aside €21.7m to meet PRSI liabilities from bogus self-employment in the organisation, records show

RTÉ declined to say whether it has calculated any pension liabilities due to workers now deemed by the State to be employees despite being designated self-employed in the past with no pension rights. Photograph: Cyril Byrne
RTÉ declined to say whether it has calculated any pension liabilities due to workers now deemed by the State to be employees despite being designated self-employed in the past with no pension rights. Photograph: Cyril Byrne
Arthur Beesley
Wed Aug 28 2024 - 06:00

RTÉ is facing a rising tax bill to settle the status of hundreds of workers after setting aside €21.7 million to meet PRSI liabilities from bogus self-employment in the organisation.

Despite a succession of huge public bailouts for the national broadcaster, the question of whether RTÉ is making separate provisions for new pension costs arising from the affair remains unanswered. Equally unclear is the question of liability for any restitution payments for workers it misclassified for years, who had fewer rights than permanent employees.

RTÉ declined to say whether it has calculated any pension liabilities due to workers now deemed by the State to be employees despite being designated self-employed in the past with no pension rights. Similarly, RTÉ declined to say whether it has set aside money to finance any restitution payments.

Internal files from two Government departments and RTÉ show a long investigation into the status of almost 700 current and former workers remains far from resolution, with less than a quarter of cases decided.

READ MORE

After prolonged turmoil prompted by the disclosure of secret Ryan Tubridy payments, the legacy of bogus self-employment in the station is one of the biggest uncertainties looming over the future of RTÉ's finances.

Department of Media records released under the Freedom of Information Act include an email in May from Eimear Cusack, RTÉ's director of human resources. She told officials RTÉ's end-2023 accounts “have a balance of €21.7 million set aside” for the Department of Social Protection investigation into contract workers.

[ Media employers urged to review workers’ status amid new Revenue guidance ]

Referring to pay-related social insurance (PRSI), Ms Cusack said: “This balance is made up of employer and employee PRSI, interest and penalties, discounted to the present value of future cashflows.”

Although RTÉ's 2023 annual report remains unpublished, Ms Cusack’s email reflects a €6.5 million increase in 12 months in tax liabilities from the bogus self-employment investigation. The provision at end-2022 was €15.2 million.

Asked whether RTÉ had updated such liabilities since the start of 2024, a spokesman said the provision “remains the figure referred to of €21.7 million”.

The social protection inquiry – known as the scope process – was set up to settle the status of some 695 workers.

But RTÉ data suggests only 175 investigations have been carried out to date, with decisions delivered in 148 cases.

RTÉ said 101 of the decisions found the worker should have been classed as an employee, while 47 were deemed self-employed. RTÉ lodged appeals against 52 of the decisions but withdrew 18 before the appeals could be heard.

“So, 34 appeals have been lodged by RTÉ, 29 of which are currently active, as five are closed,” it said.

“There are three cases being further appealed to the chief appeals officer, and two of these are also being appealed to the High Court.”

Appeals were based on legal advice on grounds of a potential “mistake made in law or in fact”, RTÉ said.

Asked whether it had calculated potential pension costs as a result of formerly self-employed contractors being deemed to be employees, RTÉ said the scope process covered only PRSI. “As such, RTÉ's provision relates to outstanding PRSI payments.”

The same response followed the questions of whether potential costs for any restitution payments had been calculated.

Ms Cusack’s email cited a “proactive process” with the Department of Social Protection to identify remaining “core issues”. That process was to be completed “in the next six weeks – mid-July”.

But there is no clarity on the outcome. RTÉ said it could not comment further while the scope process was ongoing.

Phone calls to the spokesman for Minister for Social Protection Heather Humphreys were not answered in time for publication.

Arthur Beesley

Arthur Beesley

Arthur Beesley is Current Affairs Editor of The Irish Times