Following the news that Warner Bros. Studios were considering pulling the Hobbit movie from production in New Zealand over fears about industrial action, the Government announced a new Amendment to the Employment Relations Act 2000.

Alongside granting the filmmakers a $13 million marketing subsidy and $20 million dollar tax break, the government has amended laws around the distinction between Independent Contractors and employees.

This law change has resulted in the studio’s decision to keep the Hobbit films in New Zealand.

What Does the Law Amendment Mean?

Under the previous law, Independent contractors (such as film workers) could be legally considered employees. Despite a contact defining a Worker as an
“independent contractor”, the courts have the right to define that worker as an “employee” with all the rights thereof.

If the courts felt the nature of a contractor’s relationship was more akin to that of an employee, that contractor could claim employee rights and conditions.

The new amendment – called the Employment Relations (Film Production) Amendment Bill – classifies all film production workers as independent contractors by default. The new law only affects contractors working in the Film Industry.

This law does not prevent film workers from entering into employment agreements, but may make it more difficult for them to find an employer willing to sign an employment agreement.

The new law change has been met with both support and criticism.

Prime Minister John Key said, “We’re not talking rights away from workers. This is commercial reality. Without it these movies wouldn’t be made in New Zealand.”

Minister of Labour Kate Wilkinson added. “The law provides certainty to the film Industry in New Zealand, an industry that is worth $2.8 billion to our economy … it clarifies what is already widespread industry practise – that actors, crew members and other production personnel in the film industry who sign on as independent contractors are just that, independent contractors.”

But some, such as Council of Trade Unions President Helen Kelly, worry the move could set a precedent. “If this is their response to this corporation- what about the next corporation and the next corporation?”

Most, however, seem happy with the bill, which has secured the Hobbit movie for New Zealand and ensured many more years of work for our film industry.