Film Industry Working Group: Unique employment laws required

In January 2018, the Government convened the Film Industry Working Group.  The Working Group was tasked with putting together recommendations on how to enable film industry workers to bargain collectively, while allowing them to continue working as independent contractors and without discouraging continued overseas investment in the industry.

The Working Group has now reported back.  While it has been recommended that the ‘Hobbit Law’ carve-out (introduced by the National-led government) be retained, overall the Working Group’s recommendations would see a significant departure from the status quo, if implemented.

Why collective bargaining?

Currently, the default position is that film industry workers are deemed to be independent contractors pursuant to the ‘Hobbit Law’ carve-out in the Employment Relations Act 2000 (ERA) (unless they enter into an agreement which states otherwise).  While this model has enabled some certainty and flexibility in the industry, it has been criticised for preventing those workers who are contractors, from engaging in collective bargaining.  Given the prevalence of contractors in the screen industry, this has been seen as creating an unfair power imbalance.

The Working Group’s recommendations

The Working Group has recommended the following legislative changes:

Retaining the carve-out from the ERA, that promotes the engagement of film industry workers as contractors, but amending it to:

  • Expand coverage beyond film to other screen industry workers.

The existing carve-out only applies to people engaged in ‘film production work’ as defined by the ERA, with television production specifically excluded.  In the view of the Working Group, the distinction between ‘film’, ‘television’ and other forms of screen production are increasingly blurred.  In addition, many workers flick between the different forms of screen production work because the production models and required skills overlap.  Accordingly, the Working Group recommends expanding coverage of the carve-out to all screen production work (i.e. TV, web-based production and gaming).

  • Limit its application to workers engaged by an entity that primarily engages in screen production work.

To mitigate any unintended effects of the proposed expansion in coverage, the Working Group recommends an additional restriction on the carve-out’s application.  This enables workers, who are only tangentially associated with screen production work and/or who might not have chosen to work in the screen industry, to retain the protections of the ERA, in the event their employer decides to take on a contract supplying a screen production.

Introducing new standalone legislation to deal with the rights of contractors working in the industry. The proposed legislation would:

  • Recognise the unique nature of the screen industry, particularly the need for flexibility and certainty of cost.

The members of the Working Group unanimously accepted that the need for flexibility in screen industry contracts is different from other industries and workers.  Further, screen production is a global market, and as such, New Zealand’s regulatory framework needs to ensure our industry remains competitive.

  • Require all screen production workers to be engaged in accordance with four basic principles – good faith, protection from bullying, discrimination and harassment, fair and reasonable termination and fair rate of pay.

These principles are intended to ERA as minimum contractual entitlements, which cannot be contracted out of.  The Working Group intends for the principles to be interpreted with reference to the unique nature of the screen industry.  For example, the principle that termination of contracts must be fair and reasonable is not intended to import the same onerous standards expected in the employer-employee context.  Rather, it is intended to continue to allow for current industry practices with respect to early termination of a screen production worker’s contract.

  • Enable ‘sub-industry level’ collective bargaining in relation to remuneration and conditions of work.

The Working Group anticipates that bargaining at the sub-industry level will be the most likely result of removing barriers on collective bargaining by contractors doing screen production work.  In practice, this could mean that each major occupational group in the industry will have a different ‘collective contract’ setting out the minimum terms of engagement.  The intention is for these collective contracts to bind all contractors in that sub-industry, regardless of membership (except those operating through a company structure).

While these collective contracts would incorporate some of the requirements that apply to collective agreements under the ERA, parties bargaining for collective contracts would not be permitted to take part in any industrial action (i.e. strikes and lock-outs).

  • Enable enterprise or project level collective contracts and individual contracts on top of sub-industry collective contracts.

This would allow for further collective bargaining to take place at the enterprise or project level.  However, any contracts of engagement with screen workers (including individual contracts) would not be able to contain less favourable terms than those in the applicable sub-industry collective contract.

  • Establish a framework for resolving disputes in the screen industry (outside collective bargaining).

As the majority of the screen production workers are contractors, they do not have access to New Zealand’s employment dispute resolution framework.  The Working Group’s recommendation is to establish a unique three-tier process for resolving screen industry contract disputes; the first step would be mandatory government-provided mediation, then arbitration and finally, litigation if required to enforce any agreements reached through mediation or arbitration.

What now?

The Working Group acknowledged that these recommendations alone will not be enough to create an environment in which the proposed model will thrive.  In the view of the Working Group, a significant reason for this is the screen industry’s current lack of capacity and resource to support such major changes.  The Working Group also acknowledged the time and administrative commitment required by collective bargaining.  As a result, it recommends that the Government meet the need for additional resourcing in a transitional period.

If the Government takes these recommendations on board, we expect to see legislation being developed in 2019.  However, given the nature of the industry, we expect a long lead-in time to be built into the enactment before any changes are introduced.  This will be necessary to maintain certainty for projects that are already in the works, and to ensure New Zealand continues to attract investment from offshore production companies.

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