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Changing the rules: the devil in the detail

19 Jul 2019 10:46 AM | Amber Wakefield (Administrator)

Peter Parnham examines the issues around Film Industry Working Group’s recommendations. 

As a freelancer in the screen industry, you probably yawn when you see media stories about the expanding gig economy. But like it or not, the screen industry is caught up in attempts to make this type of work fairer. On the horizon is a quite different basis for engaging crew and it may not be entirely what we expect, want, or need.

The gig economy has long been a way of life in the screen industry where almost everyone is an independent contractor – a freelancer – who enjoys the independence and freedom of operating as a small business and being able to make tax deductions for a home office no ordinary waged employee can make.  

For others the label ‘contractor’ can easily become an excuse to avoid employer obligations like the minimum wage, as many cleaners, courier drivers, telecom technicians, and plenty of others can attest. 

Eroding rights

It might sound somewhat old fashioned to talk about erosion of workers’ rights, but in jobs traditionally done by employees and now done by individual contractors what else is the loss of annual leave, sick leave, public holidays, employer contributions to KiwiSaver, ACC payments, protection from unjustifiable dismissal, pay equality and the rest? Many contractors in other industries can only eye enviously the options for flexible work, short term and projected-orientated employment agreements offered by the Employment Relations Act that seem so similar to contracts they work under except for the missing entitlements and protections.

They are not trivial amounts. For example, $37,981 is the median screen industry annual income and an employee doing the same work would cost at least $7,300 more. This might be a moot point in the screen industry where all the crew are happy enough as all contractors. Still, it does give a clue as to why this issue might be important enough for the Labour Party to make promises in their election manifesto to make it fairer for the casualised workforce. 

Backstory

This is not a new issue. Occasionally the Employment Relations Authority or the courts step in and tell the employer to cough up the extra dosh to cover entitlements, because the independent contract was a sham and the person was really an employee. A film industry case like this in 2010 led to the so-called Hobbit law.  

Old hands will remember the pressure and the panic that saw the government ignore normal parliamentary processes and ram through an amendment to the Employment Relations Act. This law made sure film production workers are contractors, unless the parties agree otherwise beforehand – an occurrence that must be rarer than a roll of film.     

Actors Equity, the actor’s union (now Equity New Zealand), saw the upcoming Hobbit shoot as a chance to bargain on behalf of members, while most film industry freelancers, used to being on contracts, were happy enough that the law confirmed usual practice if it helped bring in shows like The Hobbit. 

The reason was simple: all the entitlements and rights mean nothing when you’ve priced yourself out of a job like those unionised film workers in North America that are touted as one of the main reasons productions run away to New Zealand in the first place.

The producers additional concern about uncertainty for incoming productions was that accepted practice was to engage freelance contractors, but if the courts subsequently reclassified a pissed off contractor as an employee, this would result in significant surprise costs long after the shoot had finished.       

As they sailed into the storm, Actors Equity had to be careful, they are a union and that gives them rights to negotiate a binding collective agreement only between employers and employees. Bargaining collectively on behalf of contractors is generally not allowed. Independent contractors are businesses, and have to comply with the Commerce Act, which offers protection against uncompetitive business practices or cartel-like behaviour. 

A guild not a union

This is why we are the Screen Industry Guild and not the Screen Industry Union. Unions are for employees, and collectively bargain under the umbrella of the Employment Relations Act. There is little point in being a union if your members are contractors. Consequently, our guild is an incorporated society that does pretty much everything a union does, except negotiate collective employment agreements.  

Having said that, the Blue Book is the result of negotiation between the guild and the producers. A huge amount of work has gone into it from both sides, it is widely accepted, and it would be chaos without it. The guild can do this because, unlike an employee-based collective agreement, the Blue Book is not binding and does not set any minimum pay. Nor can you pressure the production by agreeing with your mates not to sign on unless they use the Blue Book. Agreeing a daily rate among yourselves is also anti-competitive behaviour. 

In this light, you can see why big employers might want to put courier drivers, cleaners and the rest on contracts. Firing a contractor is easier too; there is no need to go through the careful process or pay out entitlements required under employment law.  

New broom

The story would end there had we not elected the Labour-led government who saw the wider gig economy eroding worker’s rights and driving down incomes. They perhaps imagined the first step would be obvious and easy.

At the time, Workplace Relations Minister, Iain Lees-Galloway promised to get on to repealing the controversial Hobbit law within new government’s first 100 days in office. 

Yikes! They might force us to be employees when we don’t want to be. Screen industry leaders flew to Wellington and had urgent meetings with the Minister, urgent letters were exchanged, cabinet papers were urgently written. Finally, to calm the storm the government agreed to hold off and instead form a working group. 

On the Film Industry Working Group was the Screen Industry Guild, along with other industry guilds, producers, actors, Council of Trade Unions, regional film offices, WETA Digital, and BusinessNZ. 

The objective, set by the government, was to recommend a legal framework to enable workers in the screen industry to collectively bargain while still being contractors, without scaring off productions, or setting up cartels or anti-competitive behaviour by crew or supplier companies. 

It is obvious that if this group could work out what to do in the screen industry, it could set a handy template for gig economy workers in other industries. 

However, when the working group’s recommendations were published last October, they squashed that idea immediately, insisting that the screen industry is unique, so much so, it needs its own distinct labour laws. 

One risk with this approach is that the government puts the whole pot on the back burner simply because there are so many other competing priorities before the next election. 

The second, bigger risk, is that for all the emphasis on providing certainty for overseas investors and producers, New Zealand legislation normally takes years to work through the parliamentary processes with various opportunities for submissions and amendments, and debates in parliament, with a hungry opposition looking for sensationalist sound bites. All this could create the very uncertainty which, as an industry, we were keen to avoid. Unless that is, the government chooses to flirt with controversy by rushing legislation through anyway – hopefully, an unlikely prospect.

Meanwhile as the Film Industry Working Group was working away, in June 2018 the government set up the heavyweight Fair Pay Agreements Working Group, chaired by former Prime Minister Jim Bolger. Their brief was to look at the wider issues of how to set up binding fair pay agreements to cover workers who were on the raw end of the new economy. 

Their detailed solution includes a system of negotiating binding fair pay agreements that would be triggered by factors like jobs with a high level of fragmentation and contracting. An independent body would be set up to oversee the whole process. 

Unanimous

Back in the screen industry, and in contrast to the Hobbit Law crisis in 2010, the Film Working Group unanimously recommend that sector-by-sector collective bargaining be allowed for contract workers in the screen industry. The resulting agreement would be a mandatory minimum for everybody in that sector. 

The difficult bit has always been trying to define the difference between an independent contractor person, and an actual business. Nobody wants to provide an accidental legal loophole for anti-competitive behaviour by big companies. On the other hand, you don’t want to find that the plumber unblocking the drain in the production kitchen is somehow caught up in screen industry collective agreements.

The film working group have handed the government’s law drafters a good starting point if and when they look at the screen industry, or for that matter, when they look at who exactly would be covered by a Fair Pay Agreement.  

Registration

The film working group recommends guilds and producers would have to prove they are the most representative group for that section of the industry. They would then be registered. We can only hope that this would not lead to unseemly territory disputes. Once a collective contract was negotiated, the ratification process would allow the workers it covers – including non-guild members – to have input and they would all be eligible to vote on it. 

The report glosses over how this would happen. To vote democratically and include non-guild members, you would need to register all legitimate workers in that industry sector on some sort of roll. You too could become a card-carrying member of the screen industry. 

On the other hand, the Fair Pay Agreement Working Group report devotes pages to this very issue, and suggests a much simpler solution of setting up an independent body as a referee. 

Oh, and the Film Industry Working Group had one other very important recommendation. Theirs would be quite a system and solely for the screen industry so the government should hand out the money to pay for it. 

What next?

There is a lot of good stuff in the film working party’s recommendations, and it is now deep in the machinery of government who are probably wondering how something simple as repealing one law clause turned into something so complicated.    

If they accept the film working party’s request that we need our own unique legislation and systems, it could take years to see it make it to parliament. Meanwhile, if they go with the Fair Pay Agreement Working Group’s recommendations they could slide the screen industry in there somewhere, without too much drama, special legislation, wild sound bites, and uncertainty.   

But the film working group unanimously says we should go it alone with our own carved-out pieces of legislation. Or is it time to reconsider? It would not be a back down by the screen industry; after all, the Fair Pay Agreement Working Group published their recommendations some three months after the Film Industry Working Group published theirs, so they were probably in the dark.

Another meeting or two of our working group to take a closer look at the comprehensive Fair Pay Agreement proposals could pay big dividends. 

After all, fair’s fair, whether you are a courier driver, a props buyer, a taxi driver, a cleaner, an assistant director, or for that matter a producer.

Peter Parnham is an independent commentator and this story does not represent the New Zealand Cinematographers position. The working parties reports can be found at www.MBIE.govt.nz.


 

 

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