Firstly, and most importantly, the "collective agreement" is illegal, as none of the union members are currently employees of any of the companies PJ owns. PJ refused to meet with the union, as their request was illegal, and the fur started to fly from there.
I read another poorly written "news" article in the Herald this morning, and I felt it was time to clear up some facts.
1) Weta, Three Foot Six (not "3 foot 7" as stated in said article) and other affiliated film industry companies hire their workers as contractors. This is due to many reasons, but mostly because they cannot afford to pay people if there is no work for them to do. Work on a film is sporadic, and subject to delays. This is a part of the business - especially in a small country - and one that Darren is quite familiar with.
2) Every article about this issue has referenced a (NZ) Supreme Court ruling in 2005 that held a former contractor who worked on the LOTR movies in miniatures was deemed to be an employee. I've gone back to read the ruling and this is what I discovered:
The person in question was hired as a contractor by Weta, and later seconded to Three Foot Six. A contract with Three Foot Six was not immediately drawn up or signed, but did eventually happen. When the work ran out, and the contractor was told there was no work for him, he decided he was "unjustifiably dismissed" (which can only happen if you are an employee).
He first filed a claim with the Employment Relations Authority, who did not agree with him. He then appealed to the Employment Court, who did find that he was an employee by applying particular tests within the law. Three Foot Six appealed that decision to the Court of Appeals which overturned the Employment Court decision, only for the 'employee' to appeal that decision to the Supreme Court.
The Supreme Court simply stated that the Court of Appeal had not been entitled to hear the appeal (as there was no error of law), and reinstated the original decision made by the Employment Court. The Supreme Court did not set any laws around the distinction between Independent Contractor or Employee.
3) So. The issue at the heart of all of this is Independent Contractor vs Employee. This is an expensive issue, as potentially thousands of people in New Zealand will be hired to work on the Hobbit. If all of them decide they were actually employees and bring a lawsuit against Weta/Three Foot Six or Warner Brothers, the cost of the film could increase significantly. This is the uncertainty that Warner Brothers is worried about.
4) The Independent Contractor/Employee test is not a clear one, and instead is based on a long checklist. It's a series of subjective tests. This is the law that Warner Brothers came to discuss with John Key this week. They simply want assurances that if workers are hired as independent contractors that they will not be deemed as employees later on down the line.
5) Finally, the law is not a Tax law - it is an Employment law. If the law changes, it changes for all companies in New Zealand - including the one I work for. As my company also is in an industry that frequently hires contractors, we have already undertaken a risk-analysis of our contractor relationships.
I understand the Herald wants to keep the average New Zealander informed of the situation on a 'real time' basis, but they are skewing the facts for the story, and letting the idiots who head the unions (looking at you Helen Kelly) to comment on Employment law.