Employment Relations (Film Production Work) Amendment Bill

I move, That the Employment Relations (Film Production Work) Amendment Bill be now read a first time. Over the past weeks industrial issues have highlighted a significant concern about the way that the international film industry operates. The Government is moving to ensure that New Zealand’s law is clear on the distinction between independent contractors and employees in the film production industry. This legislation will provide film producers with the confidence they need to make movies in New Zealand. The film industry is worth $2.8 billion to the New Zealand economy, and the two Hobbit films alone will bring in $670 million. It is essential that we protect this industry and the livelihoods of the thousands of hard-working Kiwis who depend on it.

The Government is introducing this bill to provide certainty and clarity at the outset about the status of workers such as actors, crew members, and other production personnel involved in film-related work. The bill makes it clear that the status of these workers as contractors or employees is based on the decision they make at the beginning of the employment relationship. If they sign on as independent contractors, they are independent contractors. If they sign on as employees, they are employees. This change reflects common industry practice. Actors, crew members, and production staff are commonly hired as independent contractors.

This bill amends the Employment Relations Act 2000 to provide clarity and certainty about the status of workers involved in film production work, including production work for video games. It does not cover production work on programmes initially intended for television. It will address the uncertainty that can arise about the employment status of these workers, and prevent unnecessary delays and litigation. Most people have agreed that these workers are independent contractors. However, the potential for disputes about employment status creates uncertainty for film producers, particularly if a dispute arises after production has commenced. This uncertainty can increase the cost involved in producing a film if it delays filming. The uncertainty has also been added to by the international boycott supported by local unions.

Under the current law, a previous agreement in relation to a person’s employment status can be challenged and overturned by the courts. Despite what the contract or agreement states, the courts can look through it and decide whether the relationship is a contract for service, or a contract of service. These legal challenges can create uncertainty for all the parties involved, and can create high legal and compliance costs to reach a resolution. We need to provide this clarification so that the film industry will continue to make a significant investment in our economy and will film the Hobbit movies in New Zealand. Therefore, it is appropriate that this bill be considered under urgency and through all stages. The Hobbit was the catalyst for this amendment, without a doubt, but with or without The Hobbit, the uncertainty still remained.

Film workers are intelligent, and they understand perfectly the difference between being a contractor and being an employee. This law does not alter how they will approach their employment arrangements. It is business as usual. This law does not remove rights from anyone. It is not retrospective, and it does not affect any existing employment agreements. Neither is it a new concept; sharemilkers and real estate agents already have industry-specific exceptions.

This dispute began because a union without a mandate issued an international boycott against The Hobbit as its first action in an effort to negotiate a collective agreement, which is illegal under New Zealand law. For the unions, this issue was never about workers’ rights; it was about power. This bill responds to the needs of the film industry by providing the certainty needed to continue making films in New Zealand—not just the two Hobbit films but major films to come. The Government believes that this bill is in step with industry practice, and is a simple and common-sense response. I commend this bill to the House.

I move, That the motion be amended by omitting “now” and adding “this day 3 months”. I want to make it very clear that Labour supports the Hobbit films being made in New Zealand. The decision to film them in New Zealand is fantastic news for our film industry and our tourism industry, and it is very important for the economy.

However, this matter has been totally mismanaged by the Government, by John Key, and especially by the Hon Gerry Brownlee. It is yet another example of how our relaxed Prime Minister has ignored what has been going on for nearly 2 years, then has let it boil over into controversy, and has had to come in with a patch-up job—and a very, very expensive patch-up job at that. If the Minister in charge of this area, the Minister for Economic Development, was on top of the issues, he would have seen what was coming down the track. If he had had regular meetings with Warner Bros, as Ministers before him did—and I say that they were mostly convivial meetings, but every now and again there was some tension as the issues were worked through—if the Minister had done that, then we would have had a sort of arrangement whereby people picked up the phone, and whereby Gerry Brownlee and John Key stood beside Helen Kelly when the issue was sorted.

When the issue was sorted, it included an email from Warner Bros on 18 October. That is when the industrial relations issues were sorted. I have heard Gerry Brownlee describe the $140,000 exercises on an annual basis as “hāngi and hui”, but those were the meetings that helped with the continuing investment of movies in New Zealand. I think that that is something that has been particularly useful to New Zealand. I might say that my only regret about being part of that is that I never actually got to go to the Oscars. I do not want to criticise Helen Clark, but she was not always very generous to me as far as travel was concerned; at the point that the Oscars started I got on the plane to come home. There are one or two stories that are particularly interesting from that time, which some members have heard and which I might tell in the Committee stage.

I also want to ask Gerry Brownlee about Sir Peter Jackson and his review of the New Zealand Film Commission. Peter Jackson made some very good suggestions in that, and what has Gerry Brownlee done with them? Can he remember receiving the report? If he had focused on his job—I raise a point of order, Mr Speaker. I know that I speak relatively loudly, and sometimes I interject a reasonable amount myself, but there appears to be someone who has shifted his seat and is continually interjecting. I wonder whether I might have some protection from the Chair.

The ASSISTANT SPEAKER (Hon Rick Barker): I say to members that there was some interjecting when the Hon Kate Wilkinson was speaking. I thought that was reasonable, but I have to make the observation that the tenor and the tone have gone up subsequent to that. This will be a robust debate. There will be interjections. I say to members that we should be reasonable about it; we want to have a free flow of debate. Mindless shouting will be out.

I refer members opposite in particular to the recommendations from Peter Jackson in his review about the importance of film incentives and of getting them right. He is absolutely right in that because every time we had a discussion in Hollywood with one of three or four studios, on each occasion we discussed the incentives. They were adjusted and they were tweaked—sometimes it cost us money and sometimes it did not—on things like the timing and the avoidance of foreign exchange risk. There were a lot of changes that occurred but we knew that if there was an issue, both sides could pick up the phone. We talked regularly because we had a good relationship, although I say that once or twice it was not quite as good.

I want to talk about process, as well. Labour received a copy of the Employment Relations (Film Production Work) Amendment Bill at 12.40 p.m. today, despite promises from the Leader of the House that we would have it at 9.30 this morning. I want to say that in our time, an undertaking made by a Minister was kept. If we undertook to supply a bill at a particular time, we did. Maybe we were not as free with our undertakings, but when we were seeking support, as the Prime Minister did, we kept our word because that was important.

This bill changes employment law in a way that is not necessary. It is absolutely unnecessary. If this was a critical area, as the Government claimed, why was Kate Wilkinson not at the negotiating table with Warner Bros? Why was Kate Wilkinson not the lead negotiator when in fact Gerry Brownlee and Steven Joyce were doing the work? I must say that I think it is a little bit sad for that pair that the person who ended up actually doing the work was Steven Joyce. I also say that it is really interesting that Bill English promised there would be no change in the law and no more money. Where was he today to answer the question on behalf of the Prime Minister? Bill English said there would be no more money and no change in the law. I want to say that I am not at the point, because we do not know all the details yet about the money, where I am criticising all of it, because I think some of it was necessary. I will be very critical about a direct advertising subsidy for a US company; that is absolutely wrong because it is not available to New Zealand companies. It is a very uneven playing field. I am prepared to look—

💬 Hon Gerry Brownlee: How long a list do you want of companies that the Labour Government preferred during its time in office?

I think it was never a US company over a New Zealand company in those circumstances. It was never a US company with a specific arrangement like that over a New Zealand company.

Members opposite have been trying to say that this does not weaken the law, so why are they doing it? Who gains and who loses?

💬 Hon Gerry Brownlee: We’re strengthening the law.

It strengthens the law on the part of employers; I agree with Gerry Brownlee. This strengthens the law on the part of employers and reduces the protections that are available to people within New Zealand. There are very basic protections in New Zealand labour law, and one of the things that Warner Bros told me when I worked with the company was that it actually liked New Zealand labour law. I will tell members why. It is because we do not have the rigid occupational classifications that most Western countries have. Warner Bros often used to refer to set construction. In the United States, the United Kingdom, and most parts of Australia when constructing a set, someone who uses a hammer is not allowed to use a paintbrush. One is the job of a painter and the other is the job of a carpenter. Although Mr Assistant Speaker Barker might approve of that sort of arrangement, it is not one that we have had in New Zealand for a number of years, and Warner Bros told us that the arrangement here meant it was able to pay more reasonable wages but ended up with more productivity as a result. So our labour law arrangement was something that attracted Warner Bros and other companies to New Zealand, rather than being something negative, as has been indicated by members opposite.

I finish with one point: what does it look like for New Zealand as a democracy, as a country with integrity, and as a country with sovereignty when a group of people come from offshore, and shake us down for $33 million and for a change in our law that undermines the rights of New Zealand workers? That is the approach the Government has taken. It opens up New Zealand for anyone who wants to try to shake us down and I think it is a real pity. It is a backward step for democracy. John Key’s leadership has taken us backwards.

National will most certainly not be agreeing to the amendment in the name of Trevor Mallard. We will be supporting the motion moved by the Hon Kate Wilkinson. With regard to the last speaker, Trevor Mallard, let me say that the only foreigners who came to this country and shook us down were the Australian unionists who came in here and destroyed exactly the sort of settled industrial relations arrangements that Trevor Mallard spoke of. That is absolute fact.

Eight weeks ago this film was going to be made in New Zealand, and then Mr Simon Whipp, the Australian unionist, got the International Federation of Actors to put a black ban on the film, telling all actors not to sign on unless it was with a contract negotiated by the Australian union—and every member on that side of the House knows that; they have seen that resolution. I ask them what on earth the Council of Trade Unions has abandoned workers in this country for. Why was it not the New Zealand unions that stepped up and worked for actors and others in this country? The unions did not do it; they simply abandoned actors to the Australian union. I say to Mr Mallard that he should make no mistake: the only foreigners who have come into this country to shake us down have been the Australian unions, led by Mr Simon Whipp.

Mr Mallard’s speech was a very sad rewrite of, or attempt to rewrite, history. There is no way in which the relationship between the New Zealand Government and Warner Bros is any worse as a result of this—far from it. Fortunately, we have been able to pull out of the fire a dreadful situation, and turn it into something that will be particularly good for the New Zealand film industry in the long run. Mr Mallard has asked who wins, who gains, and who loses. I can tell members that it is the workers in that industry who have won out of this—it is the workers in the industry. I am wearing my red tie today, which is something I usually never do in this House, in solidarity with the workers who marched on Labour Day in support of the Government’s actions in this case.

We have a dynamic film industry in this country. It has been built up by very creative people, and built up by the expertise of the technical crews who have worked behind the films. But all that has been put at risk in the last 7 or 8 weeks by the Australian union, so let us clarify how that has worked. Firstly, a film was made here earlier this year by Warner Bros called Yogi Bear, and that film had no problem, whatsoever; there was not a squeak or a skerrick of a murmur from the union. It let that film slide through. But as soon as the big numbers came on the table, and as soon as the big opportunities for New Zealanders came on the table, without any reference to Warner Bros and without any discussion with Peter Jackson, the Australian union set out to put a black ban on that picture. That is absolute fact.

Then we had the sorry spectacle of the Council of Trade Unions being put in a position of having to support that position. I feel sorry for Helen Kelly. I think she has done the union movement in this country irreparable damage, at least for a long number of years, because it has been put on the back foot in having to defend the indefensible position taken by that Australian union. But I have seen in the street some of the actors who want to work on this production, and they were protesting against the union’s activity. Anyone on that side of the House who wants to say that people somehow are being misled, or otherwise, assumes that those actors are not intelligent enough to work out that without these films being made here, this industry will not grow.

The Government has moved to try to get things back on the right track. I want to make it very clear that Warner Bros did not tell us what to do. The executives laid out in front of us their deep concerns about the security they would have for making a film in New Zealand—in this case, two films in New Zealand—when at any time a union in Australia could call for industrial action that would slow them up. I want an explanation from the great party of the workers, the Labour Party, as to why it supports Australian unionist activities in New Zealand. It is a pretty simple question. Are New Zealander leaders in that movement not capable of representing those issues?

Further, it is well known that most people engaged for their skills, for their trade, and for their creativity in the film industry are engaged on the basis of being a contractor to that event-based employment opportunity. They get a number of opportunities that arise from that, in relation to taxation, etc., and they have the freedom to run their own lives. I ask what is so wrong with that. This industry pays at the higher levels; Mr Mallard made that clear in his speech. So why is there so much animosity towards this industry?

I can say that a collective contract for something like this simply will not work. I do not believe for one minute that Sir Ian McKellen, or any of the other international stars who might end up in this production, were running around saying that they could not wait for Mr Whipp and his Australian union to sort out a collective contract for them to sign up to. But I will say that if every worker or every person engaged in producing that film were paid the same as Sir Ian, then the rest of them might well want to have a collective contract. So a whole lot of mismatches in there are problematic.

Further, a wee time ago there was a case called the Bryson case. What came out of that was that if the inland revenue tests were applied in Bryson’s case, it was deemed that he might not have been a contractor and that the relationship was more in the nature of employer-employee. That proved to be very, very expensive for the production company, so the Employment Relations (Film Production) Amendment Bill sets out to make it abundantly clear that if someone is employed—or, should I say, contracted—for services on these films, and others, then that person will be treated as a contractor with no right to go and have that status questioned. People will say that that is a removal of rights, but if someone sign up and says that he or she wants to be a contractor, then where is the right for the person who is on the other side of that—the contractee—to expect that that is what the person is. I think it is utterly ridiculous to have a provision that says that people may run off at any time to the Employment Court and ask for help to change their status. Steve Chadwick over there is shaking her head and saying that that is ridiculous. She is right; it is utterly ridiculous. But that is what happened in the Bryson case.

I will finish my speech by saying that if Simon Whipp the Australian unionist had not put the black ban on this bill, we would not be in this situation. We would not have had to go through the exercise we have gone through over the last couple of days. I want to make it abundantly clear, again, that there has been no request or—the Opposition would say—pressure from Warner Bros to change our law. There has been agreement between the two that this is an issue, and that this needs to be sorted out. That is what this bill sets out to do.

Finally, I have some simple questions for the speakers to come: why do New Zealand workers need an Australian union representing them in this industry, and what has that Australian union achieved for them? I say that it has achieved nothing but grief.

Debate interrupted.