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Concerning Hobbits

The Welcome to Hobbiton sign was placed in Matamata, NZ after the filming of The Lord of the Rings Trilogy as Peter Jackson chose this site for the Shire. Photographer: Michael Goetter
Steve Hart looks at how The Hobbit drama played out and resulted in the government pushing throug


Last week there appeared to be genuine fears that NZ's movie industry would collapse unless a film about little people with hairy feet fighting a dragon was made on our shores.

Steve Hart looks at how The Hobbit drama played out and resulted in the government pushing through a change to employment laws.

* * *

Like any good blockbuster the industrial action surrounding The Hobbit films had more than its share of twists and turns.

At the heart of the dispute is a letter to Robert Fisher and David Sagal, directors of film production company 3 Foot 7, from the International Federation of Actors (FIA). The letter raised concerns that the Hobbit films were non-union productions and asked the company to call Simon Whipp of Australia’s Media, Entertainment & Artists' Alliance (MEAA) for talks.

The letter said that the International Federation of Actors had urged all its affiliates to tell their members not to work on the Hobbit movies “until such time as the producer has entered into a collective bargaining agreement with the Media Entertainment & Arts Alliance for production…”.

It is strange that the letter asked Fisher and Sagal to contact the MEAA when on the doorstep is the Auckland-based union Actors’ Equity. Nevertheless, the demand quickly turned into a three-ringed circus with unions, government and a powerful movie company trying to find common ground amid an international boycott of the film by actors.

Under pressure from non-union actors, film industry technicians and public opinion, Actors’ Equity called off the boycott. But it was too late, the damage was done. Those who didn’t see eye to eye with the industrial action said New Zealand now looked like a risky place to make films. The fact that the MEAA, instead of Auckland’s Actors’ Equity, was calling the shots also raised an eyebrow.

The saga got increasingly messy with claim and counter claim that set actor against actor, cast against crew and a tit-for-tat spat broke out between Actors’ Equity, industry lobby group the Screen Production and Development Association (Spada), Weta Workshop and Warner Bros’ film production company 3 Foot 7 Ltd.

There were marches, protests, meetings, and speeches in favour of, and against Actors’ Equity. Then came the death threats against Equity’s organiser Frances Walsh and MEAA’s Simon Whipp. Kiwi actors Jennifer Ward-Lealand and Robyn Malcolm were verbally abused.

Warner Bros* put its best poker face on and threatened to take the movie elsewhere. Life got really interesting when Weta Workshop’s co-founder Sir Richard Taylor claimed that unless the movie was made here, the New Zealand film industry would be in “peril”.

There appeared to be genuine fears that the country’s entire movie industry would collapse unless a film about little people with hairy feet fighting a dragon was made on our shores.

Trim away all the rhetoric and what do we find – what was at the bottom of this mess? Leaving aside theories that the higher exchange rate between the US and Kiwi dollar was making the movie more expensive to produce here than first planned (i.e Warner Bros needed to rebalance the books and so created a mountain out of a mole hill). It seems a group of actors wanted guaranteed minimum terms and conditions covering hours, breaks and overtime payments. A collective employment agreement.

On one hand, Warner Bros said it would be against the law to negotiate a collective agreement. On the other, Actors’ Equity said it wouldn’t be against the law and said it had a legal opinion to prove it. It was an impasse Gandalf would have handled quickly.

Leaving aside the fact that most freelance contractors operate under a limited liability business – thus price fixing laws could come into play – who is correct?

Helen Kelly, president of the New Zealand Council of Trade Unions, got involved in the dispute nine days before it was resolved. She says that most taxi drivers in New Zealand are independent contractors, yet they are all given the same terms and conditions (contract) by their employer.

However, the difference between the taxi driver example and Equity members, says Bell Gully employment lawyer Tim Clarke, is that when it comes to independent contractors, employers don’t recognise their union.

It appears then that when it comes to contractors, any industry union is little more than a club when it comes to employment law (which is probably why Spada, an organisation representing New Zealand producers and production companies, describes itself as a lobby group).

“If an employee wants to be a member of a union then an employer has to recognise the union and negotiate with them,” says Tim. “But what New Line and Warner Brothers were saying is that if these actors are contractors – and not employees – then the union has no standing.

“By being a contractor, they are not employees and so can’t be part of a union, therefore the union has got no relevance. There has been a lot of confused debate about it.

“If you band together you have much more leverage to exact more favourable terms – which is the whole point of a union – to protect employees’ rights. But if you choose to be a contractor then you just don’t have that same level of protection.”

With fears that the $670 million movies may be made off-shore, prime minister John Key went on a charm offensive and offered sweetener tax breaks to Warner Bros totalling $34 million. As an added bonus, the government will also contribute $10 million to the movies’ marketing budget.

In return, he gets the movies made here, a bit of cash flow and a tourism film promoting New Zealand on Warner Bros’ Hobbit DVDs.

The government also used The Hobbit debacle to push through a change to employment laws - something that apparently had nothing to do with any part of the dispute. Helen Kelly calls it an “opportunistic move”.

The change was made because of a 2005 employment dispute widely known as Bryson v Three Foot Six Ltd [PDF]. In this case James Bryson, a contractor who made models for The Lord of the Rings movies, sued for wrongful dismissal – despite the fact he was an independent contractor. He won his case on a technical point that last week’s Employment Relations (Film Production Work) Amendment Bill should fix.

The amendment was rushed through Parliament under urgency on 28-29 October 2010 and is designed to stop contractors getting employee status in the eyes of the employment courts. Employees get statutory holiday pay, sick pay and other benefits while contractors are generally entitled to no more than they are contracted to receive.

National’s minister of labour, Kate Wilkinson says: “The government gave serious thought to how it would respond to the threat posed to the entire New Zealand film industry.

“While this is a direct response to ensure The Hobbit is filmed here, it is also in response to the fact that had we lost The Hobbit our reputation as a filming location would have suffered hugely.”

National, ACT, the Maori Party and UnitedFuture supported what’s now known as 'the Hobbit Bill'. Opposing it were Labour and the Green Party.

Labour MP Charles Chauvel says the amended law is “simply a recipe for further uncertainty and more litigation – the exact opposite of what John Key appears to have promised Warner Bros, Peter Jackson and everybody else”.

However, Bell Gully’s Tim Clarke says what the law change has done is remove “a level of uncertainty faced by business owners”.

“What has happened with the amended legislation – which is targeted at the film production industry – is that party A and party B can get together and agree that one of them is a contractor.

“There is a lot of nonsense in the press about eroding employees’ rights. All that’s happening is that the government is changing the focus so that a contract means what it says. I think this protects everyone’s position.”

Just because unions that represent freelance contractors can’t currently strike a collective deal with employers for its members it doesn’t mean actors are on their own. In New Zealand, film production contractors are expected to offer work based on the terms and conditions in the Pink Book (it isn’t actually pink).

It’s not so much a book of employment laws for actors, more like guidelines and best practice. Something production companies can choose to adopt – or not. And this, says Helen Kelly, is the issue. There is nothing mandatory about the Pink Book.

However, Sandy Gildea of Spada, says while it recommends the guidelines in the Pink Book she doesn’t know of any production company that has broken them.

“It is a small industry and word gets around,” she says. “As far as we are aware it is abided by – by the majority. There will always be instances I’m sure where a company might not do certain things, but it has been in use for 15 years and so it is quite solidly embedded in the production industry.

“Word would get around if people didn’t follow it, you self regulate. I don’t know of a company that has broken the guidelines.”

One Hollywood insider, who asked not to be named, says Actors’ Equity and the MEAA made two mistakes.

“In the States, actors would have turned up on day one of the shoot, had their first meal on set and then gone on strike – holding the production to ransom,” he says. “They play hardball over there.

“The second mistake was the union saying it ‘just wanted to talk’. You can’t play nice with people like Warner Bros – they’ve seen it all before in the States. They would have returned home laughing their arses off at the way everyone rolled over in New Zealand. There is no way they could have moved that production off at this short notice.

“I don’t think actors here realise that making movies is a business. And the big decision makers are not interested in art or feelings. It is purely a money-making exercise for them. Visit any Hollywood studio and you’ll find nine suits for every one creative.

“The actors’ unions have set themselves back 10 years with their attempt to raise conditions for its members.”

Looking forward, Helen Kelly says the Pink Book will be revised and negotiations on updating it will start with Spada “soon”.

“We want an industry standard and the agreement the CTU has reached with Spada will allow that to happen,” says Helen. “We will go into those negotiations, look at all the issues around the current Pink Book, and establish how it will be honoured

“It is okay having guidelines as long as they are honoured, that could stretch from a real commitment from the producers to make sure it is honoured to something more solid at the other end – but I don’t want to close off what that could be.

“The really important thing is that we get something that people use.”

* New Line and Warner Bros

New Line Cinema, often simply known as New Line is an American film studio. It was founded in 1967 by Robert Shaye and Michael Lynne as a film distributor, later becoming an independent film studio. It became a subsidiary of Time Warner in 1996 and was merged with larger sister studio Warner Bros. in 2008. Source /

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4 Nov 2010

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