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Helen Kelly: The Hobbit Dispute

The Hobbit Dispute

Helen Kelly, President of the New Zealand Council of Trade Unions provides a comprehensive account of one of last year’s most contentious industrial disputes.

April 2011

Say then but this of me
Preferring not to crawl on his knees
In freedom to a bowl of buttered slops
Set out for him by some contemptuous clown,
He walked to jail on his feet

- Dalton Trumbo – one of the ‘Hollywood Ten’, sent to prison for claiming 5th amendment protection to not name names in the investigations of the House of Un-American Committee

The founder of the performers union the Screen Actors Guild (SAG), John Howard Lawson, was also one of the ten jailed for contempt. Jack Warner – founder of Warner’s Bros was a “friendly witness” at the hearings and cooperated with the Committee’s work including enforcing the blacklist of those performers, writers and others named in the testimonies. Many believed he did so in retaliation for the month long strike by SAG during a dispute with Warners over pay.

Hostility to unions in the film industry is not new and although SAG have made major strides with Warner Bros since that time, the same hostility has been evident many years later and closer to home. We say this occurred last year when Peter Jackson would refer, contemptuously, to the members of Actors Equity seeking to negotiate terms and conditions for performers working on the making of the film The Hobbit as the “Equity 200”. [i]

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Much has been written and said about the 2010 dispute between Warners and Actors Equity NZ. The CTU also has its story and this article is intended to tell the story from that point of view. It includes reference to a series of emails that were exchanged during the dispute. It refers to other documents that have been independently sighted by the media (links provided) but, to protect people involved, need to remain unpublished.

Fundamentally this was simply a situation where a group of workers sought to have a say on the setting of their terms and conditions. This was not just in relation to the Hobbit – but to all screen productions made in New Zealand. This desire is independent of all the legal questions about employment status, status of the union and all other considerations – that is simply what was it was, regardless of all the barriers that were subsequently put in their way.

Actors Equity (Equity), the union to which over 600 NZ performers belong, had tried on a number of occasions prior to the Hobbit dispute to get a binding form of agreement for its members in the NZ screen industry. It had also co-operated with the Screen Production and Development Association (SPADA) most recently in 2005, to revise guidelines for conditions for performers in the industry (in a document called The Pink Book).

SPADA is a network of New Zealand based independent screen industry practitioners. Its membership includes producers, directors, production companies, and allied craft professionals working in film and TV and includes lawyers, accountants and suppliers in the industry. To gain membership of SPADA, you need to have at least two full time employees. Retention of membership of SPADA requires a member to comply with a Code of Practice but not the employment guidelines.

The ‘Pink Book’ [ii]is a set of guidelines for the engagement of cast in the New Zealand screen production industry that has been “negotiated’ between SPADA and Equity. The Pink Book notes that it is a guideline for best practice and not a rigid code. It states that production companies and cast are able to negotiate different arrangements if some provisions do not meet the needs of either party.

There are many issues with the Pink Book. Apart from the content being weak, it does not contain for example, any provision for fees or any share in residuals.

One of the main concerns is that its provisions are not complied with and performers, as well as their agents, are in a weak position to insist on them as the basis for any contract. Take, for example, John Barnett of South Pacific Pictures (SPP) who had vigorous involvement in this dispute, and who heads up the largest independent production house in the country. Despite his reference to the benefits of the Pink Book [iii], contracts offered performers by SPP often do not comply with the Pink Book. Equity recently carried out an audit of one such contract against the Pink Book and found it did not meet the guidelines in over 15 areas, including such basics as Right of Entry, postponement due to weather, cancellation, overtime, time off etc.

In 2009 the CTU met with a group of technicians and others engaged in the film industry. These workers made their own approach to the CTU seeking union coverage. The concerns they had included that the terms and conditions of work in their agreements were deteriorating and that “with each new job, some term or condition was missing from the agreement”. This is despite there being an equivalent book (the Blue Book) that provides guidelines for the engagement of technicians. Performers report the same concerns – both non compliance with the agreed guidelines including by SPADA members and reducing conditions.

Since 2009 Equity has been campaigning for a standard contract for the engagement of performers in the screen industry. Initially Equity approached individual production companies.

The first major push on the campaign was on the SPP production of the television series Outrageous Fortune. During the penultimate season performers asked Equity to negotiate a standard contract for the production. SPP told the cast involved in the dispute that they would cancel the final season if the cast did not agree to work on an SPP contract. At the same time SPP refused to negotiate with Equity – saying that any negotiation for a standard agreement in the screen industry must be negotiated with SPADA. The performers ended their campaign. [iv] Equity approached SPADA for a negotiation – the association’s response was to offer to renegotiate The Pink Book – and to maintain that document’s status as a guideline only. This was unacceptable to Equity and its members.

The next effort was around two locally-made and funded television series. The Cult (produced by Great Southern Film & Television) and This Is Not My Life (produced by GRST). Casts asked producers to negotiate a standard contract with Equity. Producers on both productions said they would re-cast the show in response to the action. The action was stopped. The tactics used by employers in both these disputes have strong parallels with those used in the Hobbit.

The length production companies would go to in order to avoid bargaining was clear and the response to those three efforts had been very scary for the performers involved. The producers were clearly prepared to engage some of the harshest tactics seen in NZ in order to deny these basic international rights.

From these experiences, Equity realised that if it were to make progress on its goals, it would need the support of international performers, who are in a stronger bargaining position than NZ performers find themselves and who already enjoy collective conditions of work. The Equity board agreed that it would wait for an international production with unionised workers from abroad to re-launch its campaign.

This is where the Hobbit story starts. Of course, it didn’t need to start at all – but the actions of producers had raised the bar for normal industrial relations interactions and left workers with no effective alternative. Besides, Warners bargain with performers around the world and it was expected that they would respect the responsibility to do so with New Zealand performers.

In May 2010 a contract for the engagement of performers on The Hobbit was sent to Equity and to agents. The contract was silent on a number of conditions in the Pink Book, and no residual payments were included for performers. In June 2010 the Federation of International Actors (FIA) discussed the NZ situation including the efforts of Equity to negotiate collectively. The FIA agreed [v] that unless Equity could make progress on bargaining with the production company making the Hobbit (Warners), then it would call on performers to show international solidarity and advise members to hold off signing on to the film until a negotiation was agreed upon. No performer had made any commitment at this stage to work on this film and it was a generous offer from international performers to not enter into those commitments until fundamental international right for NZ workers to bargain (a right many of the international performers that will work on the film already enjoy) was recognised.

The decision of the FIA was not announced at that stage. Contracts to engage performers on the Hobbit continued to be sent to agents representing performers around the world. One agent in the United Kingdom contacted Equity – he had been told by producers that the contract his client would be engaged on was a “NZ Equity contract”. Equity informed the agent that there was in fact no union contract in existence in New Zealand and that performers had been campaigning in earnest for such a thing for the past 18 months. On 17 August FIA contacted Warners to say it wanted to negotiate terms and conditions collectively. In its letter, the FIA notified Warners that it had passed the remit [vi] .
Warners were unwilling to negotiate and, on 13 September, sent the performers union, the Trans Tasman union Media Entertainment and Arts Alliance (MEAA), a letter refusing to bargain [vii]. On this basis, on or around 25 September, the various affiliates of FIA announced the remit and asked performers to hold off signing up [viii]. There was much criticism from the Warners’ camp that Equity had put the “boycott” on without attempting to talk to the studio first. The facts show otherwise. Warners had sent a legal letter refusing to bargain before the actors unions advised members not to sign.

Peter Jackson received the letter of 17 August [ix]from FIA as a courtesy - he was not the producer. But only after the remit had been advised to members of FIA following Warners refusal to bargain, did he respond and construe the events as a boycott of the film and as some sort of last minute blackmail of his film. He said that the demand to bargain “would never be agreed to.”

The statement Peter Jackson released on 27 September [x]included an attack on MEEA. His primary objection was that this was an “Australian union” and he put forward a number of theories about the union’s motives, including that the move was “an attempt to widen its [sic] membership, and power within the New Zealand film industry.”

NZ Equity had joined MEAA after an overwhelmingly positive ballot of its membership in 2006. Being such a small organisation in an industry with ever changing producers, a huge turnover of workers, relatively small membership potential and real hostility to union involvement, Equity members gained substantial benefit from being part of a bigger performers’ organisation. Many Equity members work on both sides of the Tasman and could now be a union member without joining two organisations. MEAA was also able to participate at the international level, something Equity could not do.

Equity however still controls its own affairs in New Zealand. Its members meet regularly in branches. They run workshops, make submissions on NZ law, and on cultural and screen matters, organise new membership in new productions etc, have their own newsletters and website and comment on applications for immigration permits for foreign performers applying to work here. They have their own office and staff. Clearly they are also very much part of the MEAA infrastructure as well, but they get the benefits of both worlds.

Peter Jackson’s criticism of the union speaks for itself – a union seeking to widen membership and influence in the industry in which it operates – exactly! Incidentally, these days we have hundreds of Australian companies operating in New Zealand. Employers don’t criticise that, but apparently, don’t see the hypocrisy in opposing any Trans-Tasman union connection.

Jackson’s second point was to take offence that he had become involved in this dispute. He stated “As a New Zealand filmmaker, who has nothing to hide or be ashamed about, I'm not going to see this threatening behaviour continue without some form of sensible discussion about the "facts" and "truth" behind their various allegations.” [xi] However, Jackson was not the employer/producer in this dispute and did not need to become involved in the way he chose.

There had been no allegations or threats. The reality is that unions bargain with many employers - and in the case of overseas countries, film producers - who have reasonable terms and conditions and, that many international performers on the film will have terms and conditions negotiated by a union. As Jackson stated in the same release, he honours the agreements of SAG and other international unions and, presumably, does so without offence being taken. There were elements of the Hobbit contracts, however, that performers were concerned about, including arrangements for delays and cancellations and residuals (despite there having been some improvement in these for the Hobbit film). Other workers on the Lord of the Rings films had also raised concerns with the CTU about conditions regarding travel home, accommodation, unpaid delay periods, health and safety and hours of work.

Peter Jackson made a number of other emotional claims in this first attack, including that there were accusations of exploitation on the Hobbit and that the agenda of the union was about money and power.

Peter Jackson’s interventions in this dispute were few and well targeted. They appeared to occur when public opinion was changing or the dispute appeared to be more than one sided. He played the “Australian” card and made uninformed claims about Equity membership numbers (He claimed Equity had between 100 and 200 members –it has over 600). He trumpeted his own union membership of foreign unions (it is a requirement to work for example in the USA). He praised SPADA and the Pink Book (even though, as noted above, early contracts sighted for the Hobbit did not comply with the Pink Book).

Jackson’s release of 27 September was the first signalling of the threat to close down the Hobbit or take it offshore and included a message of sympathy to those that would be denied work on the film. The term “nuclear” was also first used in this release and subsequently repeated by Philippa Boyens (Hobbit screen-writer) in numerous interviews. [It was then appropriated by the media to describe the “do not sign” order].

Most importantly, this release also challenged the legality of the union’s claims stating rather emotionally.

“ ...Why is this endangered? Because the "demands" of MEAA cannot be agreed to, or even considered - by law - and therefore the only options that remain involve closing the Hobbit down, or more likely shifting the production to Europe. It could so easily happen. I've been told that Disney are no longer bring movies to Australia because of their frustration with the MEAA.” (a claim denied by Disney [xii])

“...I personally have a problem with any organisation who represent a small minority, but attempt to take control of everyone - but that's not the real issue. The complex web of NZ labour laws are the reason why this demand will never be agreed to... NZ law prohibits engaging in collective bargaining with any labour organisation representing performers who are independent contractors, as film actors clearly are. The NZ Commerce Act claims it would be unlawful to engage with an Australian Union on these matters.”

But what were the “demands” of MEAA? And what is the law? What was the problem?

The “demands” were to enter into a collective bargaining agreement with MEEA for satisfactory terms and conditions for performers engaged on the production.
This request was made in general terms deliberately by the union. The union made it clear it wanted to have an agreement on the minimum terms for the production as did other international performers in the film. [xiii]

Whatever form that agreement took would need clearly to be in line with NZ law. If performers were to be employed as employees, this could take the form of a collective employment agreement and if they were to be employed as independent contractors then the agreement could be on a minimum standard contract which would be offered to performers for negotiation.

The dispute raised the wider issue of the lack of protection for workers employed as contractors. Much criticism was directed at those performers for seeking to bargain collectively on the grounds that the form of contracting they were commonly employed under suited them because they could write off work related expenses against income tax. Performers were accused of “wanting to have it both ways”.

The reality is that many performers do spend a reasonable amount of their own income as employment expenses. The cost of travelling to auditions, makeup, clothing, props, training, promotion and agent’s fees are all real expenses. In order to gain the same benefits businesses get in terms of these expenses, performers are forced to work as contractors and forgo all the protections of employees. Contract labour is also used by many employers to avoid obligations they would otherwise have to employees such as sick leave, paid holidays and employment security. Many workers in NZ are employed in this way for no personal benefit but with little choice. These include, for example, courier drivers, telecom technicians and taxi drivers, all of whom work under close supervision for single companies at fixed rates but who bear the risk of contracting. These workers are often offered standard contracts unilaterally determined by the employer. According to business, this, apparently, is not illegal, but workers seeking to have a collective say in what these standard contracts contain, would be.

It is not necessary in other countries (e.g. Australia) to be a contractor to get the tax benefits described, as genuine work related expense can be claimed against income tax. Many professions spend parts of their income on expenses (e.g. teachers, tradesmen) and unless they are contractors they miss this real tax benefit. They are effectively paying tax on income that is not really income. This tax law could be changed, but because of how it is currently, many performers feel constrained to work as contractors.

This does not mean that the nature of their work is not essentially that of an employee – or that they should not have employment protection. It is the view of the CTU that, regardless of this, the current law does not prohibit collective negotiations of common terms and conditions for such performers and claims that this would be illegal are illogical and wrong.

Legal opinions had started to be exchanged as early as the first refusal by Warners to negotiate. At this stage the CTU was still not actively involved, although we had seen the exchange of opinions. The refusal to bargain letter sent on 13 September on behalf of Warners was from lawyer Deborah Fox [xiv] . No reference is made in this letter to a “boycott” even though it was in response to the 17 August FIA letter. Her letter is, in our view, wrong in law and relied wrongly on the Commerce Act.

Following this, Equity got legal advice [set out in a letter of 17 September from Simpson Grierson]. [xv] This advice pointed out a number of elements of the Commerce Act that would allow collective bargaining of standard contracts to be offered to performers.

Within a couple of days of Jacksons “nuclear attack” (29 September) the Government had waded in with its legal opinion - not to try to facilitate a settlement of the dispute, it would seem, but to support Warners in their refusal to meet and negotiate.

Without talking to the union about what the union was seeking to achieve, the Attorney General, MP Chris Finlayson, instructed Crown Law to prepare a legal opinion. One can only presume it was on the basis of facts supplied by Peter Jackson; no approach was made to any one the unions for the facts. This advice has never been made public (and is subject to an OIA request and a subsequent refusal by the Minister to release it, despite placing such public reliance on it). In his letter to the studio [xvi] (copied to the union and Peter Jackson), the Minister assured Warners that the unions claims were unlawful. This legal opinion was used by those opposed to meeting with the union to solidify their opinion in the public eye. In the press [xvii] it was reported that Finlayson had told the studios that legal advice from the Crown Law Office confirmed the Commerce Act prevented The Hobbit's producers "from entering into a union-negotiated agreement with performers who are independent contractors". The press reported that “Sir Peter - who this year prepared a report on the New Zealand Film Commission for Mr Finlayson - had not asked the Attorney-General for his help.”

Most interesting was that the story said that Mr Finlayson acted on his concerns because he wanted to reassure investors that what was being touted as a reason not to invest in New Zealand did not have a firm legal foundation. That is – if a reason for the studio not investing was that workers would have bargaining rights – they need not worry! The subsequent law change agreed to by Government (see below) was intended to give Warners the absolute assurance that work rights would not be afforded to those they might employ.

All of these opinions considered what performers could do in relation to the Commerce Act; none considered what Unions can do under the Trade Union Act 1908 [xviii]. It is the CTU view that the Trade Unions Act allows workers (broader than just employees) to negotiate terms and conditions collectively without being found in restraint of trade or criminally liable (i.e. an exception to the Commerce Act).

Regardless, none of these legal issues was ever an impediment to the parties meeting and discussing this point. For example, a “Pink Book” for Hobbit performers could have been one of the outcomes – presumably a form that is safe under the Commerce Act.

Any simple meeting of the parties would have clarified the potential for agreement but this was denied from the outset. This was a point I emphasised when I met with Peter Jackson and others shortly after his press release (see later). The use of the law to reject legitimate requests to meet allowed the fears and splits of the workforce to be further exploited leading to the ultimate conclusion to this dispute which both changed the law against the interest of the workers in the industry, and enriched Warners at the expense of the NZ tax payer.

On 28 September the CTU got involved in the dispute. The release by Peter Jackson clearly made the issue a major one for the union movement. We realised that all the powers of this huge US company, Peter Jackson’s star quality and the Government’s anti union programme could be used to damage both Equity and the union movement generally. Some have questioned why the CTU got involved. Equity is a CTU affiliated union. But in any case, it is our fundamental belief in the rights of workers to bargain that meant we had an absolute obligation to provide any support we could against this unfair attack. When we stop believing in that, for our own reputation and relief, we will fail in our function as the summit and leader of the union movement in New Zealand. When workers are under this sort of attack, the union movement will take on anyone and we will not bow to the deference with which some parties think employers should be held in this country if that means workers will be denied their rights. More on this later.

With the agreement of Equity we made contact with Wingnut films and proposed a meeting with the CTU. We also talked to SPADA. That day we met with the union officials (Frances Walsh and Simon Whipp) in Auckland and discussed a range of issues. Equity was meeting its members that night in Auckland and the following day in Wellington. There has been some criticism of the union for holding these meetings post the story breaking. This was unfair.

The strategy to seek standard agreements had been approved by union members and the union did not want the story to break in the way that Peter Jackson broke it. Its hope was to have a negotiation under the radar and resolve this issue. It knew the strategy had the support of members and its senior officials were consulted as the matter developed. There was a risk that meetings with members specifically about the Hobbit before the dispute was made public and before Warners had the chance to do the right thing, would, in itself, have escalated the dispute without giving Warners a chance to respond.

Subsequently Equity members overwhelmingly endorsed the union action – as expected. Criticism has also been levelled at the union for the lack of clear messages and communication during this period – perhaps an accusation that could be levelled at both sides. Unions don’t have huge PR resources at their disposal and did not want to run this dispute in the media. Maybe they were wrong on this, but a PR capacity should not be a reason for unions - always lacking resources - to be denied the legitimate right to bargain.

The CTU cleared all communications it made with the union, and filled a communication gap to some extent. The union was then criticised for “hiding behind the CTU”. Sometimes it is hard to please! Peter Jackson was frequently unavailable and regularly personal in his attacks but was not subject to the same criticism as those representing the union.

On that Tuesday I spoke to Matt Dravitzki, an assistant to Peter Jackson. I explained that the way through this dispute was to meet with the union and that the CTU was willing to meet and hear from Peter Jackson and try to facilitate a way through. This was followed up that day with an email from me. This email set out clearly facts including:

That any legal issues concerning reaching an agreement can be overcome and take into account the preferred employment/contracting status of the company and the performers. Neither party can or would want to enter into illegal arrangements. Concepts like "responsible contracting" might help us...”

It also made it clear that the union wanted to discuss terms and conditions in the NZ context. It was not seeking international parity as was also claimed, and that

“the parties would be able to reach agreement on these details for this movie and then should evaluate how the process can be used to build the relationship in the future.”

This email was passed on to Peter Jackson. The next day Matt Dravitzki called me back to set up a meeting with Peter Jackson, Fran Walsh (Wingnut Films) and Philippa Boyens (producer) for the following day. A meeting took place on 1 October.

The meeting lasted for over 2 hours and covered extensively the position of both sides. Following the meeting it was agreed I would put out a brief media advisory with the language agreed with Wingnut and following its consultation with Warners. I do not want to release all the details of these emails, as it is unnecessary and unfair given the spirit in which they were sent, but an email from Matt regarding the proposed release confirms Warners were in the loop including:

“Fran and Peter have said we can't formulate any kind of press release until Warners give it their blessing, but we have had a go at a preliminary draft and if they approve, we are happy to work on it further with you.”

And after a couple more exchanges

“...Meanwhile we would appreciate it if you could communicate to interested parties that "you and the producers have met and we are hopeful that a meaningful dialogue between Equity, SPADA and Three Foot Seven can be established. It is imperative that SPADA be included.”

After minor agreed changes this statement was released. [xix]

So at this stage a meeting was possible, legal and the parties were hopeful it could be established. Warners were also in the loop! This may all seem a bit pedantic, but anyone that has been involved in an industrial dispute will appreciate that the parties have to be able to have fair dealings with each other or they would never reach a settlement. Both parties have to trust that the views being expressed are genuine, are seen by the parties as useful to finding a settlement and that they can continue to act on that basis.

The information was released to the media as agreed and the parties also agreed at the meeting to not go into detail of their discussions. This effectively meant that the CTU could no longer comment safely. The media were aware we had met and any comments could be taken as informed by that meeting.

I was surprised then to hear the extensive interview with Philippa Boyens that next Monday morning on RNZ. The nature of her comments were provocative given we were trying to get the parties together. I raised my concerns with Peter Jackson who responded that day that

“...I've listened to it now, and I actually thought Phil handled it quite well. She was fair, and very respectful towards you, and she says she attempted to stick to the facts that had come out in your statement - giving as little detail as possible. I think if you are put in the same position, you should feel that you can do the same thing. I'm going to contact SPADA and encourage them to be very open minded, and take a meeting listening to all the actors concerns. Such an open discussion is long overdue, and I'm sure progress can be made to addressing many of their concerns.”

It seemed the absence of any reference to Three Foot Seven may possibly have represented a change of position by Warners. I therefore wrote back pointing out the slippage and asking if there was anything I could do to get the discussion referenced in our press release off the ground. The response from Matt Dravitzki was that the matter was out of their hands and was being handled by Warners. In this email Matt again changed the nature of our understanding suggesting that

“It was always our understanding that any meeting to be held in New Zealand was to be between SPADA and NZ Equity, and that Three Foot Seven's involvement would have been simply in an observational capacity. It is also our understanding that SPADA and Equity are to meet together soon regarding The Pink Book, and we sincerely hope those discussions go well.”

I wrote back again, but it was my view at that stage, they could not get Warners to the table as Warners had bigger fish to fry (more later). Instead of simply explaining this and acknowledging the position had changed, the nature of the discussion was being rewritten and now Jackson clearly wanted any resolution to sit with SPADA.

However there still appeared to be some goodwill in these emails and the indication that they would support and promote this form of settlement was a possible path the union could then follow - a situation which was to change again after the CTU followed this advice and the matter was resolved with SPADA and the Government.

During the dispute the CTU had kept Minister Gerry Brownlee’s office informed of developments from the union perspective. He had also had a number of conversations with the senior officials from Equity. On the evening of 13 October he called a meeting involving SPADA, Equity, CTU and his staff to discuss a possible solution. By the time he got to the meeting the next day he was saying that the meeting was unable to discuss the Hobbit on Warners and Jacksons instruction - a position that I thought absurd given it was the elephant in the room and that Peter Jackson was encouraging such a meeting as a solution to the Hobbit dispute.

Equity and the CTU made it clear at the meeting that we had a solution that we believed would not only resolve the Hobbit situation but would enable an enduring resolution to the ongoing issues. On that basis the meeting continued. By its conclusion the parties had agreed to meet to discuss updating the conditions of engagement for performers in the New Zealand screen production industry. There was agreement that the parties both accepted that these discussions would not only involve negotiations on terms but also the options for new mechanisms that meant the agreement reached was honoured.

A mechanism to ensure the agreement is honoured in the future (and please – a new name for the agreement!) could take a range of forms e.g. from a binding agreement between SPADA members and the union to an agreed bipartite process for promoting the honouring of the book with mechanisms within SPADA for raising and dealing with concerns. Nothing had been ruled on or off the table and the parties then needed to explore this. It was also acknowledged that any production that, in the interim, honoured the current Pink Book would be acting in the spirit of the agreement and would not be subject to Equity campaigns for specific terms and conditions. On that basis Equity agreed to recommend to its board that it recommend to the FIA unions that the “do not work” order be rescinded.

Many underlying issues were explored at this meeting and the feeling at the end was that the solution would provide a sustainable way forward for the industry and the Hobbit. A positive press release was issued by agreement from the Ministers office. [xx]

On this basis Equity phoned its committee and it was agreed to advise the FIA unions that a path way through the dispute had been found and recommending to them that the “do not sign” order be rescinded.

The Equity board agreed that MEAA’s senior official Simon Whipp should inform the US Screen Actors Guild (SAG) and others of the decision and SAG then inform Warners. All this happened on the evening of 17 October. A series of emails were exchanged between SAG, MEAA, Peter Jackson’s “camp” (it is unclear who exactly) and Warners on various practical matters. The CTU rang Minister Brownlee’s office and told them the orders were lifted.

There are a series of confidential emails confirming this timetable of events between SAG and Warners. While they are confidential, they were shown to various media outlets by the CTU after the studio and Government tried to assert that the dispute was still unsettled on 20 October. The media have confirmed their contents. [xxi]

The first of the series of emails was sent on Sunday 18 October from MEAA to SAG with a draft of how the settlement might be announced publicly. The Screen Actors Guild respond on the Monday morning saying that what was proposed looked fine and included an email to Warners with the proposed MEAA statement assuring Warners that MEAA would not announce the end of the “don’t sign” decision until Warners were ready.

The next email is Warners to SAG with its proposal of what the studio might say regarding the settlement, but saying they first want to check the wording with the “Jackson Camp”. Once it had this feedback from Jackson it said it was “good to go”.

The proposed draft acknowledged that Warners was “pleased that the Screen Actors Guild, the Federation of International Actors, and New Zealand Actors Equity have retracted their various Do Not Work Orders for The Hobbit”.

The final email is from Tuesday 19 October and includes a request from Warners that the MEAA release be amended at the request of Peter Jackson and that the “Jackson camp” has also requested minor changes to the studio release which was agreed to.

Despite this agreement, Warners held up making the release. MEAA did not feel able to release the information to the media until Warners did (because MEAA had agreed not to), and on the evening of 20 October (at least 3 days after Warners had been notified of the settlement), WETA studios called the Wellington film community to its studios and the now infamous march against the union was organised.

When these emails were shown to media after things died down a bit, Jackson denied having seen them. [xxii] It is clear however that regardless of whether he had actually sighted the emails, he had been consulted about the release and was aware that the dispute was settled and that what he called a “boycott” had been lifted.

The Government was also aware of this and the only group left in the dark was the public! Contact was made with the Minister’s office to seek his advice on whether or not we should simply put out the news and it was the advice of his office that we should not.

It is also clear from information released late last year under the OIA that, following the settlement in Auckland involving Minister Brownlee, he had contacted Peter Jackson to advise him that the dispute was settled and the “don’t sign” orders would be lifted. Jackson then advised the Minister by email on 18 October (before the rally), [xxiii] that it was not the “boycott” that was influencing Warners to consider moving the film.

The CTU could not understand why the information regarding the settlement was not being released by Warners, leaving the public unease about the dispute to continue. MEAA was getting meetings planned with Equity members in New Zealand to discuss the upcoming negotiations with SPADA and, as far as it was concerned, the delay in the media release was essential, given the undertaking it had given to the studio that it would not announce anything until Warners was ready. However MEAA was getting more and more anxious about it and questioning why the information was being held. No one would know the actual reason until the 20 October.

On Wednesday 20 October, 22,000 workers nationwide protested in New Zealand about the Government’s changes to work rights going through the Parliament. These changes include the removal of protection from unfair dismissal for the first 90 days of employment, draconian measures around the use of sick leave, restricted access of workers to their unions and a number of other unsavoury and unfair changes. Those demonstrations took place at noon.

At 3pm film agents in Wellington were contacted and asked to contact film workers in Wellington to attend a meeting at the Stone Street studios (WETA studios) at 5pm to hear some important news. It is a little unclear what happened at the meeting but it appears that Richard Taylor from Weta Workshops was there, as was Philippa Boyens.

Despite Peter Jackson knowing otherwise, workers at the meeting were told that the dispute was not settled, the ”boycott” was still in place, and that the Hobbit was moving off shore. An inflammatory handout was distributed repeating much of the previous misinformation about the dispute and reiterating that it was ongoing. [xxiv] Attendees were also told that Equity was meeting that evening in town (ironically to discuss progressing negotiations with SPADA) and they might think about protesting at the meeting.

The “impromptu” rally was supported by pre-prepared signs including “lift the boycott’ which were available at the studio. About 1000 workers who had not been told the truth, descended on the Equity meeting which had received a tip off and had been cancelled to avoid an angry confrontation. The CTU then leaked to the media that the dispute had been settled and that Warners were refusing to release this information.

Following the rallies, that night, a statement was released by Peter Jackson and Fran Walsh saying amongst other things that: [xxv]

"Next week Warners are coming down to New Zealand to make arrangements to move the production offshore. It appears we cannot make films in our own country even when substantial financing is available...".

This captured all the headlines and was consistent with what the film community had been told at the meeting the night before. Yet it was clearly untrue. The next day Philippa Boyens and Fran Walsh were interviewed by Kathryn Ryan, who questioned them relentlessly on this point. It was clear from the interview that this was not the reason for Warners visit. [xxvi]

Because of the importance of this interview, I have copied some of the transcript here. I think it illustrates how important it was to the studio to keep up the illusion that the film would move and the “boycott” was still on until the visit by the executives from Warners was complete. So over night, according to Jackson and Walsh, the film was unequivocally moving, but the next day:

Kathryn Ryan:
Right. So yesterday’s developments we saw Sir Richard Taylor and others involved with the movie go out and march. We know that an Actors Equity Meeting was cancelled last night, and now it’s emerging that the Actors are saying that on Sunday they agreed to lift the boycott. Is all this part of what caused you to issue that statement last night?

Fran Walsh:
Let’s be clear. The boycott has not been lifted and this is one of the reasons why we wrote that statement, because that has not been lifted. And Helen Kelly, no matter how much she said it, it’s not true. If anybody goes to the Screen Actors Guild website, if they look up under hot news they will see that we are blacklisted. So that’s just frankly again, more misinformation.

[Transcript Note: At the time of the interview the SAG website blacklist was still in place – at 4:26pm the NZAE website had posted a lifting of the boycott)
My note: of course it said this – SAG was holding the message at this stage until Warners released it. ]

Continue interview:

Fran Walsh:
I don’t want to get upset but this is part of the problem. We have been told every day for a month that the Blacklist is coming off. Every day, we have waited for news of it to be lifted. It has not been lifted. They’re toying with us, and now we are beyond caring whether they do this because the damage is done and the Studio is making their own moves with the film now and it’s rapidly out of our hands.

Kathryn Ryan:
Tell us what the studios are telling you. Tell us what Warners are saying to you about where this film is now to be made?

Philippa Boyens:
The situation that we’re facing over this whole issue is that – they’re very respectful and understand that we want to make the movies here – but it is a process and at some stage during that process you literally feel the thing slipping away because you begin to understand that this is falling into the ‘too hard basket’ and the ‘too dangerous basket’ for the Studio, because despite what Helen Kelly and the NZ Equity and Simon Whipp behind the scenes are saying, they haven’t shown any good faith. They haven’t made any sort of move to show that this is not a country where if they come down and invest $500million US of their money that they’re not going to be facing continual ongoing industrial action from New Zealand actors and international actors, because that’s what happened here.
I heard Robyn speaking on the radio – (KR: Robyn Malcolm of Actors Equity) – yeah, and see, they don’t understand, they’re saying ‘how can it be a small group of New Zealand actors that caused this?’ – well I’m sorry Robyn that’s not what you did. You invoked SAG -The Screen Actors Guild of America, you invoked British Equity, you invoked not just the New Zealand Actors but you invoked all the actors around the world. This film, this films reputation, was (dismerged?) and I’m afraid there’s no other way to say it. We were getting calls from people saying; ‘what are you doing to actors’; you know ‘you’re mistreating them’. We’re not mistreating actors. They know that.

Kathryn Ryan:
Philippa, what are Warners saying because you told us last time we talked, it was about 2 weeks ago, that it was getting towards crunch conversations between Sir Peter in particular, and Warners. What are they saying to you? You’ve said in this statement that ‘they’re now coming down to New Zealand to move the film offshore’. Is that what that said – Its now going?

Fran Walsh:
They’re saying they need stability and certainty – neither of which are here… neither…

Kathryn Ryan:
…So Fran, are they coming down here to check us out?

Fran Walsh:
… Our film Industry used to have that. It used to be a place if where people would look to New Zealand and think ‘I can set a film up there – we can make a film there’ now they do not think that. That’s how much we’ve fallen in the eyes of the rest of the world in terms of studio and overseas investment. And it’s an absolute tragedy – an absolute tragedy – and that’s why Warners are saying we can protect our investment better in another country where we know this isn’t going to happen. Because New Zealand has been embranded now as an unsafe place to shoot.

Kathryn Ryan:
Fran, tell me exactly what is the status of where they’re at? If they’re sending a Representative down here next week its to do what?

Fran Walsh:
They have people in the UK taking photos, taking the location photos, they’ve got a huge studio there that Harry Potter have vacated that they own, their ex Rolls Royce factory that they say would be perfect for us. Obviously, there are tax breaks over there that has nothing to do with, in spite of again what Helen Kelly says, it has nothing to do with where the film will end up. It is not a tax break related situation at all. And even though New Zealand can’t offer anything like the more attractive ones overseas, that is not the deciding factor in this. What it is, is uncertainty and stability in the workforce.

Philippa Boyens:
Here’s what I find interesting about that whole situation is Helen coming out and being incredibly vocal over this whole situation is that she appears to come out and accuse people like Peter Jackson and Richard Taylor who have only ever worked in the best interests of their crew and the New Zealand film industry, now she feels it’s ok for her to come out in defence of an Australian Union that brought this on the New Zealand industry, and not in defence of New Zealand workers, and I find that bizarre.

Kathryn Ryan:
Help me clarify exactly where things are at with Warners. I think everyone’s got a sense of the boundaries being pushed here and where things are at. I’m trying to work out where they’re at. If they’re sending a rep down next week to New Zealand (PB: Yep) it is to do what? To assure themselves, or to make a final call on whether or not they can trust our industrial situation? Is that’s what’s happening next week?

Philippa Boyens:
Well unfortunately it feels awfully like to us, because we’re sitting here facing this situation, that this conversation is almost already done. I mean we don’t know far we need to go to try and retrieve this situation, but that’s the situation we’re in now, that we need to fight to get this film back. That’s basically where we’re at.

Kathryn Ryan:
So they haven’t said…

Fran Walsh:
… When you think about it Kathryn, why would you bring a $500million investment to a place where – I mean, this has happened now. We’re not even in production, this actually happened before we were even Green-lit , so why on earth would a studio who’s responsible to a board and has to account for the decisions they make; why would they bring it into a place where it’s almost guaranteed industrial action will happen during the shoot. I mean, that’s the last thing they can afford to happen, and yet there’s no protection for the film that it won’t happen. So how can they possibly bring the films here to make them?

Philippa Boyens:
And they keep demanding good faith negotiations and good faith discussions, and yet they show absolutely no good faith towards the studio. The studio who were actually offering actors incredibly good terms and conditions. And again, why would you wonder at Warners not wanting to come down here. Why is that a mystery?

Kathryn Ryan:
So when the statement says Warners are coming down here to make arrangements to move the production offshore, it’s not quite at that point I suspect, reading between the lines, I can hear what you’re saying; you’re trying to convince them ‘no, it’s going to be alright, are they coming down…

Fran Walsh:
You’re asking us to speak for Warners which I think is a bit unfair, I mean I think you should talk to them yourself.

As the transcript shows, at this point both the Jackson camp and Government were continuing to insist publicly that the dispute was still live, the “boycott” was still on, I was not telling the truth, and that the film was moving – the message given to the marchers the night before. This interview with the producers received very little coverage and the media continued to leave the issue unchallenged. That evening, in an interview with Mark Sainsbury, Minister Brownlee called me a liar when I put these facts forward, even though he knew them to be true and was at the table when they were agreed. [xxvii]

What happened next is history really. Unnamed Warners executives did come to New Zealand the following week and were picked up by Government limousine and driven to the Prime Minister’s residence. Despite all the denials that Warners were using the union dispute to its financial gain, it was quickly clear that money was the issue and that the high value of the NZ dollar and competitive tax subsides being offered by other countries were underlying the decision of where to make the film. [xxix]

But another issue, which had never been raised by anyone during the dispute, was suddenly on the table.

In 2005 a contractor working as a technician for Three Foot Six (production company for Lord of the Rings) challenged his employment status in a case that went all the way to the Supreme Court. The worker (Bryson) was employed as a contractor, but when the court looked at the true nature of the employment arrangement, it found the contracting arrangement was a ruse to avoid employment obligations that are accorded to employees under NZ law (e.g. sick leave, holidays etc). It was very clear that each case would revolve on its specific facts. In the Bryson case, he had an agreement that looked like an employment agreement and his work was closely controlled by the company (including regular hours of work, close instruction etc). The case was insignificant in many respects. Many films have been made here since that decision without any concern that it had wider implications for all agreements in the film or entertainment industry. Yet this case was used that week (see below) by Warners, and the Government, as part of the negotiations with Warners, to support a law change removing rights from workers in the film industry.

Within a day or two of the Warners visit, the Government had reached an agreement with the company to increase the subsidy from the $65 million already available in subsidies by a further $30 million. It also agreed to change employment law to remove the right of any worker in the film industry to challenge his or her employment status. This law change was rushed through Parliament within 24 hours, under urgency without public submissions. It was welcomed by Jackson and Walsh, who wrote to the Minister that they were “thrilled” and “relieved” that the law had passed. [xxx]

It was outrageous that the Government removed worker rights as it did. It suited the Governments anti worker rhetoric, but it and Warners knew that the dispute had been settled. None of the agreement between the Government and Warners actually settled the industrial dispute, as the union was not involved at any level. It is remarkable that, on the basis of the settlement, Warners seemed able to agree the film would be made in NZ when, according to its position, the dispute was still unresolved. It is clear that had it been known to the public that Warners and the Government already knew the industrial dispute had been settled and “boycott” lifted, Warners’ trip to NZ would have been hard to justify and the subsequent promise of additional tax payer money and urgent law change would have been untenable. All players opposed to the union had a strong interest in maintaining the fiction! They needed to keep the dispute live to protect themselves and the Government from looking conspiratorial – it seemed like a collusion against the New Zealand tax payer and New Zealand workers.

In December, after much delay, the Government released a series of documents relating to the dispute. It also held back a large number which are now subject to a complaint to the Ombudsmen. Amongst these papers are the already mentioned email and letter from Peter Jackson. This release sparked another round of media interest where some slightly harder questions were being asked, particularly of the Minister in relation to his role. [xxxi]Government coalition member, United Future Leader Peter Dunne, questioned whether or not he had been misled by the Government into supporting the law change. [xxxii] Peter Jackson chose not to comment on these emails for several days until releasing an unusual media statement which was more revealing than perhaps he intended. [xxxiii]

The purpose of this account is, in part, to put the CTU perspective on the record. The CTU represented its affiliate Equity. We were also as keen as any other organisation or person to see the Hobbit filmed here. We worked hard to get a settlement as did Equity, SPADA and at one stage, Gerry Brownlee. A settlement was achieved. Action was lifted. The boycott was over. All the parties knew that and Warners said they were ‘good to go’ on a statement to that effect.

Why was that not the end of the matter? None of the other parties involved has ever given any plausible explanation. In the absence of that, it is difficult to escape the conclusion that each had an interest to serve. For Warners it would seem to have been a financial opportunity, for Peter Jackson, perhaps to avoid working with a union on his films and the chance to overturn a Court decision it appears he didn’t like and for the Government an opportunity to hit back at unions protesting at the attacks on workers rights.

The Government emerges from this whole episode with little credit. Even when the CTU said the dispute was settled and there would be no more action, the Government said we could not be trusted. What does that say about the Government’s respect for good faith bargaining? This flies in the face not only of industrial relations practice in New Zealand but of the law itself. Our culture is no matter how bitter a dispute, you honour the settlement and it is rare for that ever to be breached.


I have written this detailed (and rather long) record of events first because it is important to have a union record on this dispute but also because this dispute has become the subject of a number of academic publications. Having a clear set of facts on which these can be based is rather important.

But the response to the Hobbit dispute underlies a fundamental problem with the “jobs” narrative that is being driven up by the right wing in this country and used to hammer any worker who might want to have a voice in the economy or world of work. The narrative is largely unchallenged and is holding us back in many areas and is part of the growing corporate dominance over of our society and community.

Basically the story runs like this – and I am simplifying it. Work is a benefit, business is the benefactor and workers are merely the beneficiaries. Workers should be grateful for a job; a job is a privilege; employers should be lauded for the contribution they make to growing economic wealth. This narrative not only devalues the contribution of labour and fails to recognise the exchange of labour for wages that is taking place, but it also provides the justification for the removal of work rights, insufficient pay rates, government subsidies to business and the like. It paints anyone who joins or seeks to organise a union as disloyal, a wrecker or an ingrate, throwing charity back in the face of the giver.

It paints the union as an outsider, an interferer in a relationship based on charity. The employer is to be revered – deference is the name of the game. Employers have bought into this narrative and you hear it regularly in the commentary of their advocacy groups. It is also used here and internationally to justify unsatisfactory and unfair trade arrangement, environmental degradation etc. It is being resisted but is overpowering in many situations. It is similar to the so-called ‘trickle down’ approach – where, if everything is done to make business profitable, the benefits will flow down to the deserving poor. We saw that in the 1990s – but the benefits only trickled up.

The Hobbit dispute is simply an example Actors were portrayed as ungrateful, biting the hand that feeds them, contributing nothing compared to the great Warners that were donating 2000 jobs to the economy. The beneficiaries were ungrateful. No discussion on rights was possible. Absolute deference was to be shown to business and this employer regardless of any other possible approach (e.g. that they should be expected to negotiate with performers here, as they do all over the world). The union was demonised and a change to employment law, at the request of Warners, was New Zealand’s way of apologising for some of our citizens’ bad behaviour.

A second example is Pike River ¬ a mine that, after only 1 year in operation, exploded late last year killing 29 miners. Immediately the narrative began to protect the company. The company CEO was grief stricken – as you would be. The media wanted grief not accountability. The families were not going to share their grief with the nation in those immediate days after the blast. Shocked and desperate for a rescue that was never going to happen, they mainly stayed out of the limelight. So the media focussed on the CEO. Pike River was painted as the company that saved the Coast (the West Coast of NZ where it operated is a mining area and the mine, being new, had provided new employment). It had gone in there and provided jobs and the biggest hope was that it would reopen. NZ media asked nothing of the company in those first few weeks. Some cheeky Aussie journalists flew here and asked some hard questions of the company – and were demonised for being insensitive intruders. The mine owners were given prime place in a state run memorial service without family representation. Miners were depicted as war heroes that went to work every day facing danger but prepared to accept it as part of the necessity of mining. It was bizarre. The site was unionised, the delegate was killed. Unions were anxious, as were many others, about speaking out, expressing anger or asking questions in this climate. They were concerned about being painted as ungrateful for the benefits bestowed by this company on the economy

Early this year the minimum wage was increased by a measly 25 cents per hour at a time when inflation is running much higher than that. On TV, some brave McDonalds workers criticised the rise as insufficient “biting the hand that feeds them” as TV 1 said.

The Hobbit dispute was a just and simple claim, underpinned by internationally recognised human rights enjoyed by many performers around the world. Despite Peter Jackson’s union membership, he co-operated with Warners and the Government to defeat this claim and thereby damaged worker rights and the unions he claimed to support. Much more will be written about this dispute, but the work of the union movement goes on. Unemployment continues to grow in this country, wages are devaluing against the cost of living, workers are being dismissed without cause under new laws, the gap between rich and poor is at is largest, public services as basic as night schools and ECE are being cut and at least ten people have died at work since Pike River (not counting those killed at work in Christchurch). The Hobbit however will be filmed in New Zealand, and performers have won a negotiation with local producers





iii There were many statements on TV and radio from Barnett saying the Pink Book was the answer – this is one I could find

iv Above in iii

v “Resolved, that the International Federation of Actors urges each of its affiliates to adopt instructions to their members that no member of any FIA affiliate will agree to act in the theatrical film The Hobbit until such time as the producer has entered into a collective bargaining agreement with the Media Entertainment and Arts Alliance for production in New Zealand providing for satisfactory terms and conditions for all performers employed on the productions.”



viii The Screen Actors Guild (SAG) advise to members on 25 September was:

The makers of feature film The Hobbit – to be shot in New Zealand next year – have refused to engage performers on union-negotiated agreements. Members of Canadian Actors Equity, US Actors Equity, the Screen Actors Guild, UK Actors Equity, the American Federation of Television and Radio Artists, the Media, Entertainment & Arts Alliance (Australia) and the Alliance of Canadian Cinema, Television and Radio Artists are advised not to accept work on this non-union production.

If you are contacted to be engaged on The Hobbit please notify your union immediately.

ix Above in vi


xi Above in x


xiii Above in vi

xiv Above in vii








xxii Above in xxi













Helen Kelly is the President of the New Zealand Council of Trade Unions


[Scoop update: South Pacific Pictures' John Barnett Responds
SPADA Statement in Relation to Re-negotiation of Pink Book]

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