There's something about this Hobbit business that doesn't sit quite right with me. I need help to understand it.

The Hobbit saga (at least, the contemporary version) began with the actors union - backed up by overseas acting guilds - threatening not to work on it unless some vaguely specified terms and conditions got agreed to ... or, at least, talked about with them. It was, near as dammit, a strike.

Peter Jackson then got very upset, saying that Warner Brothers would pull out of filming in New Zealand as a result of this action. So the actors quickly backed down.

Warner Brothers then flew into New Zealand, purportedly seeking reassurances that its project wouldn't get hit with another strike mid-way through production. Oh - and some extra money would be nice, too.

Now we have a deal giving them a bit more money, and a law change saying that if a contract says someone is an independent contractor in the film industry, then they are "independent contractors" irrespective of the actual, real world nature of their work and relationship with the production company.

So here's what I don't get. How does that law change, purportedly meant to put Warner Brothers minds at ease about our industrial relations landscape, have anything at all to do with the actor's actions that allegedly kicked all of this off? Because I can't for the life of me see any linkage whatsoever.

In which case, what just happened here?

Comments (27)

by BeShakey on October 28, 2010

Hopefully, someone will give you a definitive answer, but in the meantime, heres my understanding.

The actors were asking to effectively negotiate a collective agreement.  However, the current law says that independent contractors can't band together to do that (as it would be anticompetitive).  Having backed down on this, the film company was worred that the actors would then claim that, despite being employed as contractors, the actual nature of their work made them employees.  Not only is there precedent for such a claim, the precedent setting case was of an employee on LOTR.

Therefore, by changing the law to make it clear there can't be a transition from a contractor to an employee (in the film industry), there isn't a risk that the actors will try this move again in an attempt to force collective agreements.

Thats my version anyway.  Hopefully someone with an employment law/Hobbit knowledge can confirm or deny.

by Lyndon on October 28, 2010

You question about the lack of connection may be resolved by the way the Govt is now claiming Warners never demanded the law change. If you believe them.

I'm not saying this will allay you more general concerns, but you can't have everything.

by mike potton on October 28, 2010
mike potton

I believe the law was changed to ensure that this

Could not happen again.

But I agree the link between the law change and the actors action's seems arbitrary.

by Andrew Geddis on October 28, 2010
Andrew Geddis

Having asked my question, I see Steven Price has asked a whole bunch more (in a related vein) here.

I get that Mr Bryson's case creates some uncertainty around the employment status of some workers in the film industry ... but I just don't buy that this uncertainty stretched to actors, or even that the "fix" for that uncertainty could do anything to resolve the initial dispute (which was over wages and conditions, not employment status). So I'm still confused.

by Kyle Matthews on October 28, 2010
Kyle Matthews

There's clearly no relation between the additional money and/or the law change, and the actors dispute at all. The supreme court case I understand set some clear limits when defining the guy as an employee not a contractor, including the fact that he required training to do the job and he had none of the features of being a contractor - he was paid a wage, worked 9 - 5, could not subcontract etc etc.

None of that applies to actors, who will continue to be actual contractors. I think the two things that the govt has caved in on to Warners are payback on the country for the Union action and Warners having lost a bunch of money both during and before the industrial action.

by IrishBill on October 28, 2010

If it wasn't so far-fetched I'd say they made a meaningless change to employment law as a PR excercise intended to cover for the fact the problem was tax breaks and not industrial action all the time.

by peasantpete on October 28, 2010

You are right Andrew, the whole thing is very murky.

The Actors shot themselves in the foot. Negotiating while limping backwards is not a good look.

Holding a gun to someone's head, before entering discussions is not smart strategy. It is effectively what they tried. (Trouble was bullet went through own foot).

Jackson's response, rightly or wrongly is understanderable.


Given the publicity (largely media crapola, and exchanged threats and insultsand, certainly damn all cool analysis) it is no wonder that politicians began circling.

The National Party are hardly union friendly and when a pond full of sitting ducks appears, the sound of firearms being loaded becomes deafening.

The demonstrations by people with too much time on their hands and tiresomely insecure personalities were bruited by what passes for main stream media as if it mattered.

I doubt that many of the demonstrators understood, or cared, about the underlying employment and or economic arguments, let alone the legal ones.

All that matterd to them was that if this hollywood production was not shot in NZ there would be no "reflected glory" on them.

"Like you know I come from New Zealand.  It is an important place 'cos Hollywood companies make films in NZ.  It makes me important."


Politically this matters and the National Party played it very well.

John Key and Crosby Textor have worked this one very well.

The murkiness comes about through union ineptitude and machiavellian politicians.

Oh I forgot, a completly stupid "media" also increases the murkiness.  If they did not increase the murkiness they might have to be intelligent, rational, analytical and do some actual research.  Fat chance.

by Tim Watkin on October 28, 2010
Tim Watkin

I think BeShakey is on the right track. My problem is that amidst the statements and interviews and claims and counter-claims, there's been very little fact established.

For example, you start the story with actors threatening not to work. Some start the story with Jackson refusing to talk to the actors before they opted to strike (although Jackson said he couldn't talk to them and reckons he re-directed them to SPADA). Some start it with the unions refusing to talk to SPADA before The Hobbit became the focal point. Some start even earlier when actors were raising the same issues on Outrageous Fortune, The Cult and This Is Not My Life.

Take your pick...

by Tim Watkin on October 28, 2010
Tim Watkin

Let me try this... One of the actors' claims was that they wanted to bargain collectively. "Clarifying" that they are independent contractors will mean that under NZ law they can't bragain collectively, thereby taking away any chance of strike action.

Am I getting close?

by william blake on October 28, 2010
william blake

I think bagging the CTU was just a bonus for Warner Bros and the Tories, the real negotiations were always going to be the tax concessions.

That said New Zealand has the talent, top to bottom, from the director to the caterers, to produce these films and we are told that Americans associate Tolkein with New Zealand they see us as middle earth. So did W Bros ever really intend to walk away?

Also I hope the next blockbuster made in New Zealand under this new legislation is an adaptation of a piece of adult fiction and not another kids film.

by peasantpete on October 28, 2010

Let us not forget that, among other things, that National promised not to do anything too upsetting in its first term.

Given the polls (whatever they are worth) it looks like National will be leading the next government.

The "free market" mantra will be increasingly heard, especially in the industrial relations area.

National will be revelling in this film industry fiasco.

It gives them a free hit at unions, again and again.


It is a distant echo of "dancing cossacks".


I think Key has already mentione Stalin in reference to something else.


I feel an election coming on.

by Simon on October 29, 2010

Have a listen to Key (via The NZ Herald)

He is asked the obvious question, "isn't this about taking away ACC, sick leave, Kiwisaver?" and he replies (at 21 seconds) "I wouldn't jump tp conclusions".

Then at 34 seconds, he says "there are a lot of people who want to work for Three Point Seven the production company".

He appears to neither understand the Bryson issues, nor can he even correctly name Jackson's company Three Foot Six Ltd.

Its just embarassing.


by IrishBill on October 29, 2010

One of the actors' claims was that they wanted to bargain collectively. "Clarifying" that they are independent contractors will mean that under NZ law they can't bragain collectively, thereby taking away any chance of strike action.

They were trying to cllectivly bargain as a union representing contractors. Whether they could do so or not depends on where you get your legal opinon from. I think they could have but in a round about way. Either way this law change has no effect on that situation.

by Andrew Geddis on October 29, 2010
Andrew Geddis

What IrishBill said ...there simply was no suggestion that the actors could be considered "employees" under present law, so this "clarification" does nothing about the original dispute (howsoever it began).

by Tabitha on October 29, 2010

Simon, it really is 3 Foot 7 Ltd. You're woefully out of date.

by BillyJean on October 29, 2010

"New Zealand govt sells its soul to Warner Bros."

Well, that's assuming it has a soul. Next it will the British Anglo-Royal Fruit Cake Association (BARFCA)who wants to film their tea party series on the public lawn at Amberley. Slippery slope, anyone?

This isn't about money, it's about popularity....The government is giving knee jerk reactions because it lacks the self esteem of Ringwraith.

by Steve F on October 29, 2010
Steve F

@ Tabitha......the company is hobbit respondent in the Bryson case they were Three Foot Six Ltd but time has marched on and perhaps they have grown an inch.....on another note after looking through the Bryson decision he (Bryson) probably was justified in taking his grievance the whole way to the SC as it is clear (to me at least) he was hard done by......he was always an employee having been seconded across from Weta workshops....I'm not sure how any massaging of the law is going to change the outcome from a similar fact scenario in the future....


by Tabitha on October 29, 2010

"as respondent in the Bryson case they were Three Foot Six Ltd but time has marched on and perhaps they have grown an inch..."

Yes that's correct Steve, they have, and I have updated Simon (!).

by Tabitha on October 30, 2010

Today's NZ Herald has a plausible answer:

"If workers on The Hobbit wanted to argue that they were employees, they could seek that status through the courts. If they won, they could then strike, claim personal grievance cases, or even demand collective bargaining, and Warner Bros could not hide behind the claim that it was illegal. If this happened - or even an initial court case - in the middle of production, it could cost Warner Bros millions. However, if all the workers were independent contractors, Warner Bros could replace anyone who wasn't working out without having to worry about personal grievance cases."


by Simon on October 30, 2010


For several reasons, I struggle to see the Herald explanation as anything but highly implausible.

So you believe the "risk" to Warner Bros is allegedly that the Hobbit workers will strike once they have obtained employee status from the employment courts. That really is just a hypothetical case. Did you note that the paragraph you highlight is qualified four times with the use of the word 'could'. And all 4 'coulds' have to fall one way for it to happen.

A reading of the Bryson vs Three Foot Six decision ( makes it obvious that this will be impossible because of the slow timeframes getting into employment courts. Bryson was "let go"/terminated on 28 September 2001. He did not get a hearing at the Employment Tribunal until 7 January 2003, 15 months later. The Supreme Court decision in his favour was not until almost 4 years later, on 16 June 2005. So, he could not have gone 'on strike' until almost 4 years after the LOTR trilogy had wrapped. In any case, his greivance was not about conditions, it was about dismissal.

Also, Warner Bros are not the potential employer. It is Jackson's company Three Foot Seven Ltd, that will have to enforce contracts. Any costs incurred would sit with Three Foot Seven Ltd and have no affect on Warners Bros' profit.

This argument that "the risk of union action required a law change" is just part of the narrative justifying Key's actions and Jackson's actions. It is sad but not surprising that most media seem to be uncritically repeating it. Is it too much to ask that people google the Bryson case read it and form their own opinions?

by Andrew Geddis on October 30, 2010
Andrew Geddis


I did see that. Like Simon, I think it's a bit fishy as an explanation. Also, I'm suspicious of the reliability of the narrative account ... reads to me like the journalist transcribed an account given to him by National's comms folk. For example, "scene Three" includes the information "[Key] is friendly, but firm. He puts an offer on the table, as far as he'll budge." How exactly does Mr Cheng know that this is what happened, given that there were no press inside the meeting?

That said, I guess it is possible that a foreign studio really doesn't understand how NZ employment law works (even though it is basically the same law that exists in the UK ... where Warners was threatening to move the film to) and rather than explain this to them, the Government just decided to "clarify" matters - albeit in a way that really doesn't seem to have changed anything at all.

by Tabitha on November 01, 2010


Under what grounds could the MEAA have been demanding a collective bargaining agreement with 3 Foot 7 in the first place then? Riddle me that.

by Tabitha on November 01, 2010

Oh *ahem*

Please replace "could... have" in my comment above with "DID".

by Andrew Geddis on November 01, 2010
Andrew Geddis


Again, that question doesn't have anything to do with the law change. If the MEAA could demand in law a "collective agreement" of some sort between 3-foot-7 and the actors as independent contractors (which was somewhat debated from a legal perspective), then saying "independent contractors are independent contractors" doesn't change anything. They can still make the same demand now. Alternatively, if the actors can't make such a demand of 3-foot-7, then again the law change doesn't change anything. They still can't do so without becoming "employees" - which is not something they want to do.

So, again ... while you have asked a genuine riddle, the answer has nothing to do with the legislation rushed through the House.

by Simon on November 01, 2010

I think the law change happened because Peter Jackson was still sore about losing Bryson vs Three Foot Six Ltd in 2005. I would say he very strongly wanted to be able to just 'declare' Bryson and other 'workers' to be independent contractors by issuing them payslips headed with 'invoice'. He wanted this enough to go to the Court of the Appeal and the Supreme Court. So, given that the Warner Bros executives are meeting to negotiate with Key about tax rebates, why not ask for a law change too?

by Tabitha on November 02, 2010

Andrew: then on what grounds did the MEAA make the demand for a collective agreement? Because it was illegal then, and as you point out with the law alteration, that has not changed...

So this drama started with a hollow threat, and ended with a pointless law tweak. I suggested that the law change is really to remind workers on the films that they really are contractors, which a tiny minority appears to have forgotten about or overlooked when they made their demand.

by Andrew Geddis on November 02, 2010
Andrew Geddis


If that is all that happened, then it is one of the more stupid and pointless laws that Parliament has ever enacted. And that is saying something, given some of the stuff that institution has churned out over the years. Note also that Gerry Brownlee twice stated in the House that this wasn't a change demanded by Warners - so either he's lying to us, or the Government decided off its own bat that this would somehow fix the problem.

As for whether independent contractors can seek a form of standard contract across an industry - that gets into Commerce Act questions I just don't know enough about.

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