The Hobbit dispute

Sir Peter Jackson on the set of the Lord of the Rings

There’s a lot we don’t know about the nature of the dispute between the actors, the movie studio and the Hobbit’s Director. We can however look at the logic of some of the statements made to help us determine the veracity of their claims.

The problems first seemed to surface as an attempt to negotiate a collective agreement covering actors for this film. Notable was the claim that New Zealand actors are independent contractors not employees and therefore were covered by the Commerce Act, not the Employment Relations Act, making a collective negotiation “illegal”.

Not discussed is what makes them independent contractors instead of employees. This is an area that has regularly been before the courts, who have developed a number of tests to help determine the difference – which ask questions such as “who has control of how, where and when the work is done”, “are they required to do the work themselves or can they hire other people to do the work for them” and “who supplies the tools and equipment”. Some jobs have aspects which are consistent with employment for some tests and being a contractor for others. The Appeals Court in the case of Cunningham v TNT Express Worldwide (New Zealand) Ltd, operating under the previous Employment Contracts Act, looked at the “real nature of the relationship” primarily through looking at the intention of the parties as indicated by the nature of the contract they agreed to. Since the Employment Relations Act has come into force, the courts now consider the real nature of the relationship in wider terms with the intention only being one factor, and may decide against the agreement that was signed.

This happened in the Supreme Court decision on Three Foot Six Ltd v Bryson, where the court decided despite the contract and some aspects of the job being like a contractor, Bryson was an employee, although the court noted that the decision was “not to be regarded as affecting the as yet untested status of any other employee in the film industry”. Being stung once, it perhaps isn’t surprising that Sir Peter is keen to establish that actors are independent contractors from the outset. Particularly misleading was the statement that a collective employment agreement couldn’t be negotiated because the work was temporary. The Union, however, appear to have conceded on this point and now have concentrated talking about improving conditions in the “pink book”.

Withdrawal of labour is a well established tactic when negotiating, enshrined (at least for employees) in law – it could be considered one of our “rights”. The main argument against the Union proceeding with this path is the damage it does to the film industry as a whole, loosing future income that benefits other parts of the economy i.e. other people. This was a surprisingly collectivist argument from a right of centre government. Lets look at an analogous situation of rights v economic benefit – could I operate a clothing factory “sweat shop” paying a lower than minimum wage to people in exchange for the economic benefit they bring to me, clothing retailers, and ultimately consumers through lower prices? Surely the concept of a fair day's pay for a fair day's work shouldn’t be negotiable?

Photo: Reuters

So what's a fair day's pay?  We can do a comparison with minimum wages, but in this case we have a better point of comparison.  If you are doing the same job, to the same level of skill as the person next to you, then you shouldn’t be discriminated against because of your race, gender, nationality etc.  Yet that’s exactly what is happening here, between New Zealand and actors of other nationalities.  Unless you want to argue that our actors aren't as good, or as productive, or something  ....

There has been a further development. The suggestion is now that the work will go to England, not Eastern Europe. Since the conditions for actors work in England are greater than were being asked for here, and I can’t imagine other costs are any less, the economic argument against negotiating appear weak.

It has also been argued by the film studio that the action by the Union has cost them economically due to the time delay. This is a movie that has been on hold for some years (mostly due to financing issues with the studio), but it is possible that conditions have changed and this is now true. However, the action has only been for a few days. To organise another location, when work has already begun in this country, could take at least as long as the delay so far. It would appear then, that where the delay is due to the actors the cost is unacceptable, but when the studio makes an equally costly decision that’s OK. The argument, once again, isn’t about economics but seems to be about a principle.

The whole concept of workers accepting less than minimum conditions than they would have as employees; the tax breaks; and the other incentives to bring film work here - in exchange for less well defined economic benefits, looks a lot like the theory of trickle down economics, or as it was called in the US in the 1900’s “horse and sparrow economics”, based on the idea that if you feed a horse enough oats, some will pass through to the road for the sparrows.