Peter Jackson, mental fragility, employees and contractors

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Peter-JacksonJust before we set aside the new low in New Zealand reporting last week – news coverage of the release of government communications with Peter Jackson and Warner Brothers over the Hobbit debacle two years earlier – the issue of contracting demands attention.

In case you’ve already forgotten, the documents the government released under Ombudsman pressure last week showed, among other things, that the blacklisting of the Hobbit by unions had been called off two days before the orchestrated march, supported by Jackson and Weta Workshop’s Richard Taylor, demanding the blacklisting be lifted.

What is also clear is that the government knew the boycott had been lifted before the march but Minister Gerry Brownlee publicly denied this and relished the media whipping up public hostility against the entertainment unions.

If the media had done its job last week Brownlee would by now have resigned for brazenly and deliberately misleading the public and New Zealanders would finally understand just what was at stake for Jackson, Taylor and Warner Brothers over the contractor issue. It boils down to profit, more profit and even more profit while the workers get screwed. How so?

For those not aware of the world of contractors here’s an example from the last couple of weeks when a friend of mine applied for a job as a full-time courier driver in South Auckland.

At the end of the first week the boss handed him a contract to sign and because it said the role was “independent contractor” he rang me for advice given I’ve previously worked for several years as a union organiser.

So what did the contract say?

The pay was $625 per week which would be $15.63 per hour before tax based on a 40 hour week. Miserly pay but at least above the minimum wage (which will be $13.75 from 1 April).

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But.

The company also deducts a $30 per week “servicing fee” for use of a company vehicle which is provided for its “contractors”. This takes the pay rate down to $14.88 per hour.

And worse.

The hours of work are from Monday to Friday from 6.30am to 5pm each day without rest breaks or meal breaks – the “contractor” is expected to take them on the run. This is 52.5 hours work per week, rather than 40, which takes the hourly rate down to $11.33 per hour before tax – below the minimum wage and with no paid breaks.

And worse still. As a “contractor” there are no four weeks paid holidays or five days paid sick leave (or overtime pay for statutory holidays for that matter) which is worth approximately 10% of the total gross pay. This brings the hourly rate down to about $10.14 before tax.

It couldn’t possible get worse could it? Yes. The contract says any delivery mistakes or parcel breakages etc will be paid by the “contractor.”

And accidents too. If the “contractor” has an accident in the company vehicle then he or she is “.responsible for all costs incurred in such an accident or incident”

The contract lists a host of other responsibilities which shift all risk and liability to the “contractor” which should be the responsibility of the employer.

In short contracting allows this employer to pay far less than the minimum wage while piling all risks and liabilities onto the workers themselves. It is abusive and oppressive and describes the kind of slave-like conditions to which this kind of contracting inevitable leads.

It’s easy to see why Jackson, Taylor and Warner Brothers love “contracting” and hate unions. It is a license to screw workers even harder.

So instead of once again fawning over a sad, mentally-fragile, union-hating Jackson the media should have put the government on the mat and told the public the truth about contracting.

Why is that too much to ask?

52 COMMENTS

  1. Nice article, sets out the problem in a very clear way. Peter Jackson has really gone down in my estimation in the last couple of weeks. But as you point out this way of underpaying the workers is widely used in NZ.

    • I obviously can’t speak for your employment laws, but in the U.S. given that the hours of work and break times are completely governed by the employer and the work performed is on company property (their car), the “independent” contractor title would not hold up to U.S employment law and the contractor would be considered an employee. Do you have any employment law there similar to the U.S. law defining employee v contractor?

      • Yes, we do have laws governing this in NZ and no, this contract would not stand up in court. In “TNT Worldwide Express Ltd v Cunningham” the NZ Court of Appeal said an employee of a Courier company would be a contractor not an employee if they provided their own vehicle and were paid per trip. This is not the case here and the guy is an employee. I think he should get better advice and avoid bush lawyers

        • You can bet the moment he raises the fact that he is functionally working as an employee, the employer will say “Oh? Don’t want the job? No problem, we’ll just palm it off to the next desperate sob. Keys?”

          P.S. Not sure if your implication was the author was somehow a bush lawyer?

  2. Good piece John, I wish people were more aware of the abuse that is conducted by employers making their employees contractors. I have a number of patients who find it difficult to come for regular appointments because they have no breaks for precisely this reason. Hardly surprising to see our mainstream media take an utterly toothless approach to the issue last week. An ignorant public is a requisite for some the social and economic policy making we’re seeing these days, the media absence on important issues like the TPPA makes them seem complicit.

    • You cannot blame Jackson, Taylor or Warner Brothers. It repeatedly said contractual obligations. What does this mean? It means that every single one of these contractors knew the conditions prior to signing the contract. If they initially thought, oh I can handle this, and then couldn’t. That is not Jackson’s and company’s fault. It seemed very laid out above in the article what was actually in the contract.

      Now does the contract seem like a great contract? No. But at the same time. They signed the dotted line. They can’t complain about conditions they knew about going in.

      • A lot of workers do not know their rights and enforcement of rights through the Labour Department (now renamed) is pathetic.
        People sign the dotted line for a job – not for someone to get them to contract outside the law.
        But it is another case for comprehensive civics education in schools…

    • Yes I agree and my apology to those offended. It was a careless slur spurred by Jackson’s comment that he spent two weeks unable to sleep at the thought he may have to negotiate with a union (he put it differently but that was the effect)

  3. Why is that too much to ask?

    It’s not so much that it’s too hard to ask it’s that the ignorant journalists just don’t know enough to ask the question.

    I worked out that a contractor should be charging out at $100/hour to cover all the extra expenses, going on holiday and all the down time they have.

    This courier business sounds like it should be full employee rather than a contract position. It would be cheaper to do it that way except for the fact that they have dumped all those extra expenses on the drivers and aren’t paying them for it.

  4. I think you will find the contractors who work for the Film production companies are very different to your cheery picked example.

    I am a contractor myself and earn well over $50 per hour.

    I know of people working for the film production and post production companies. They earn well over $50 per hour as well.

    Nice to see you lump us all together though John. It is kind of why many contractors prefer to stay away from Unions.

    • So… just because YOU’RE doing fine, Gosman, means that it’s permissable that other contractors get screwed?

      Is that what you’re saying?

      In other words, “I’m-alright-Jackson” is what counts?

      That’s a pretty scary attitude you’ve got going there.

      • Well, a true independent contractor has the right to refuse any job they wish. That’s the benefit of being “independent”, you are your own boss, you choose your jobs, you negotiate your pay and if they won’t pay your rate, you go elsewhere. Why would someone sign such a poor contract?

        • Well he didn’t sign the contract, but worked there for a week and then was given the contract to sign. The advert did not state that this was a contract job and it was never mentioned until the person had worked there a week.

      • No, I think Gosman’s point is comparing a courier contract with movie production contracts isn’t really a great comparison. Kind of like going ‘Well people doing special effects on movies are paid crap, so the movie stars must be too!’ Really sorry Jackson has to be insulted for trying to bring more revenue to the country, didn’t realize we were above needing it!

    • Smells like the often trotted out straw-man often trotted out on message boards.

      You’ll notice that there are no figures, no references or are there details of any kind in this post.

    • I’m not trying to lump anyone together – some contractors working for Treasury or government ministries will be on hundreds an hour.
      I think the example I gave underlines the importance of unions.

      • Not really. I could equally highlight my income as an example of the benefits of non-Union membership.

        Simply because a person is a contractor on a low wage and is not a member of a Union is no indication of the benefits of Union membership.

  5. “It boils down to profit, more profit and even more profit while the workers get screwed. How so?”

    The movie has now made north of 1 BILLION dollars. How much of that money is being recycled back into NZ? Answer: None.
    The Hobbit is NOT a NZ movie. It never was, it is a movie MADE in NZ. We need to stop deluding ourselves and cease fellating Warner Bros (or whatever studio comes here to exploit us next) to create films that are of virtually no benefit to the country, with the exception of mere bones thrown at us in the form of a POTENTIAL tourism boost. We need to DEMAND a percentage of the profits of these films: imo a very small price to ask considering we all fucking financed them after all (directly through tax breaks, and indirectly through loss of liberty).

    • “We need to DEMAND a percentage of the profits of these films: imo a very small price to ask considering we all fucking financed them after all (directly through tax breaks, and indirectly through loss of liberty).”

      Spot on.

      • We are not funding them. The support arrangement in place is mainly a rebate not a subsidy. If the film was not made in the country there would be no money to pay back.

        As for the supposed loss of liberty, do you know what the law change actually meant practically to The Hobbies production? I’ll give you a clue. It is the same as the chance you will be singing the praises and voting for the John Key eduCational party.

        • “We are not funding them. The support arrangement in place is mainly a rebate not a subsidy.”

          Is that your response? Semantics?

          Listen my neo-liberal chum; a “rebate” or “subsidy” is still funding them.

          If we gave a billion dollars of “rebates” to farmers – as we did in the 1970s – would you, being a Libertarian – not call that funding that sector??

          Please tell me. I’m dying to know.

          “If the film was not made in the country there would be no money to pay back. “

          ‘If’?

          Meaning what? A justification for subsidies? You’re basing economic and employment laws of ‘Ifs’?

          I thought you were opposed to subsidies?

          Should we offer the same subsidies to other industries? If not, why not?

          “As for the supposed loss of liberty, do you know what the law change actually meant practically to The Hobbies production? “

          Indeed I do. It meant the government unilaterally changing the status of a group of workers from EMPLOYEES to CONTRACTORS.

          Now tell me, Gosman, how would you feel if central government interfered with your employment status? Would you be ok with, for example, a Labour-led government bring back compulsory unionism and forcing you to be a unionised employee?

          I’m curious why you think changing EMPLOYEES to CONTRACTORS is ok, when, I’m guessing you would spit tacks at being forced to become a UNIOSED EMPLOYEE.

          “I’ll give you a clue. It is the same as the chance you will be singing the praises and voting for the John Key eduCational party.”

          ?!?!

          English please?

          That makes no sense.

          • You arer quite right. I am against these rebates. I thiunk they are a silly idea. However the two main political parties in NZ ,(National AND Labour), are fully supportive of them. Therefore we have to deal with the reality of the situation. The reality of the situation is that we are not funding these movies at all. We are just rebating tax revenue that the Government received as a result of the movies being made here. Far more than the money rebated was spent in NZ making the movie. The vast majority of funding is still coming from the Studio.

          • A challenge for you (and anyone else).

            Name me one person involved in the production of The Hobbit that went from being an employee to a contractor as a result of the law change.

            If what you are stating is correct then this shouldn’t be a problem for you. The trouble is I very much doubt you can do that because the law change was more a clarification on existing practices rather than anything radical like you suggest.

          • By the way it was John Key National party. I sent the comment by my phone and it auto corrected. As this blog doesn’t have edit features you will have to accept my typo errors just as I accept yours.

    • I think it would be easier and better for the country if the government just fronted up $500m per year to make movies with the returns then going to the government, actors and others involved in making it in an equitable fashion. The people disbursing the money are on salary to the government and get nothing more from the sales of the movies.

    • “How much of that money is being recycled back into NZ? Answer:”

      Quite a bit actually. Given the fact that a lot of the people involved in the production of the film like Peter Jackson are on a percentage of revenue. This means the funds should eventually be repatriated.

      The real question is if any political party on the left in NZ will change the arrangement National put in place. I think the answer to that is a big fat no.

      • “Given the fact that a lot of the people involved in the production of the film like Peter Jackson are on a percentage of revenue. This means the funds should eventually be repatriated.”

        Really?

        What you are referring to are ‘residuals’ and this was one of the sticking points in the October 2010 industrial dispute. The MEAA/Actor’s Equity wanted to negotiate residuals for their members.

        Warner Bros and Jackson didn’t want a bar of it, as this email from Jackson shows;

        Dear Ministers Brownlee and Findlayson – just to be clear

        Simon Whipp is doing this to enable the MEAA to become the distributor of all non-sag residuals on NZ films. (This has always been his end game) He is doing this so that he can claim to have negotiated The Hobbit contract. This in turn will give him and the MEAA access to a very large chunk of money via the actor’s residuals. (The MEAA takes 5%-15% off all down stream earnings)

        The things Whipp has cited as conditions for lifting the ban (facilities, meals and turnaround) are the same things he brought up as problems with The Hobbit contract. This is not a coincidence.

        This is his way into our fim and NZ film industry.

        If we allow this to happen the next action we will be facing from the FIA (backed by SAG) a joint union action to force the production to acknowledge the MEAA as having been party to the negotiation of terms and conditions for all performers, thus according them the right to distribute all Non-SAG residuals. Once the MEAA control residuals they control the film industry.

        This guy has played us for fools. We have just heard that NZ Equity are about to make a statement claiming they have negotiated The Hobbit residuals with Warners.

        We appreciate your support, but in light of the MEAA’s tactics we cannot carry on for much longer in this insanity.

        Best regards,

        Fran and Peter

        Source: http://www.3news.co.nz/Portals/0/images/The%20Hobbit%20Files.pdf

        Regarding residuals, Actor’s Equity said this,

        NZ Equity members voted that MEAA would collect residuals earned by actors and distribute them. Residuals are payments for the re-use of performers work in recorded media. The MEAA charges a five per cent fee on residual payments for members and a 15 per cent fee for non-members.

        As the vast majority of New Zealand Actors are members of Equity (over 600 members out of 900 actors counted in the census), the majority of New Zealand actors would be charged a five per cent fee.

        This fee is used to pay the salary of an accountant and several financial staff to chase up payments from a multitude of producers around the world with residual agreements, dating as far back as 30 years. This is way in which residuals are processed world-wide.

        Any remaining money from fees goes to the Equity Foundation for education and training purposes including acting master-classes for performers. This benefits both actors and producers by creating a growing pool of highly skilled actors. The MEAA and NZ Equity do not profit from the collection of residuals. Performers are the sole beneficiaries of residual commissions.

        Source: http://www.actorsequity.org.nz/index.php?option=com_content&view=article&id=295:equity-press-statement-setting-the-record-straight-on-new-oia-hobbit-documents&catid=44:in-the-news

        On 2 October 2010, Jackson and Warner Bros said they’d offer residuals to actors. But they refused to provide details.

        On 27 October 2010, Jackson stated,

        These residuals can be worth tens of thousands of dollars to an individual if the film is successful – however the normal situation is that if an actor is not a member of SAG, they do not share in the profit pot.

        — This has always struck us as unfair, since most Kiwi actors are not lucky enough to be SAG members. For the Hobbit, Warner Brothers have agreed to create a separate pot of profit participation, which will be divided up amongst non-SAG actors who are cast in the film. This was not done because of any pressure from Guilds or Unions – it was actually Warners doing the decent thing, and New Zealand and Australian actors will be the principle beneficiaries. SAG members have their pot, and non-SAG members now have theirs. We have introduced the scheme to Kiwi agents and it’s now part of all our Hobbit cast deals.

        Source: http://www.moviefanatic.com/2010/09/the-hobbit-comes-under-union-fire-peter-jackson-sounds-off/

        But all this relies on Warner Bros’ “good will”.

        The same Warner Bros that Jackson himself sued in June 2005 when he “claimed that New Line [Cinema] committed fraud in its handling of the revenues generated by 2001’s “The Fellowship of the Ring,” and as a result, he was underpaid by millions”?!

        Source: http://www.nytimes.com/2005/06/27/business/media/27movie.html?pagewanted=all&_r=0

        Well, good luck with that!

        So if you have any further details, Gosman, I’d be interested to see them.

        But so far your statement about “residuals” is unproven and Jackson himself fought the MEAA tooth and nail against it.

        • You have fallen for the leftist spin on this hook like and sinker haven’t you Frank.

          Answer me this, if Jackson was so against the residuals why did the Union lift the blacklisting of The Hobbit?

          Even people like Robyn Malcolm admitted that Peter Jackson treated and paid his actors and other workers much better than other production companies did in NZ. The issue was never about the conditions of work on The Hobbit but the fact that The Hobbit was being used to set the standards for the whole industry in a number of areas and the enable the Australian based Union to muscle in on the NZ industry. That was the problem Peter Jackson had. Not anything to do with the pay and conditions he negotiates with his workers, (which people agree are very good).

          • HE Sir Pete had whipped up a storm not only within himself but with his Warner Pals regarding the Bryson Case and the Loophole those dam Aussie Unions would exploit
            And what a Storm he created very good at telling stories and stretching the truth AHHH but he is a Story Teller even Tall Stories it seems

          • “You have fallen for the leftist spin on this hook like and sinker haven’t you Frank.

            Answer me this, if Jackson was so against the residuals why did the Union lift the blacklisting of The Hobbit?”

            “Leftist spin”?You haven’t even addressed the points I raised.

            That wasn’t “leftist spin” I gave you – it was rercent historical facts.

            Christ man, I spend an hour researching info to set you straight and you don’t even acknowledge it.

            Do you wonder, Gosman, why people can’t be arsed giving you “raw data” or sources, when you are so cavaliar when the information is presented to you?

      • The real question is if any political party on the left in NZ will change the arrangement National put in place. I think the answer to that is a big fat no.

        You may be in for a disappointment, Gosman,

        A Labour-led government would change the law around film workers, even if it meant losing the The Hobbit films overseas, as part of a major policy release around employment relations.

        Source: http://www.odt.co.nz/news/politics/182931/labour-vows-repeal-hobbit-law

      • Hmm, there’s a NZ airlines Hobbit commercial, I’m betting there’s going to be a helluvalot of money coming back from the movies in tourism alone. When you speak in absolutes it’s easy to see the lies.

    • You’re clearly not familiar with the film industry.
      If you’re not willing to work on a film because you’re not getting paid enough, then they’ll find someone else that’s happy to do the work instead. If you unionize and make it so nobody can work for that price then the film will go elsewhere and find people.

      The money will always come from Hollywood, and they have the luxury of shooting in Canada or the UK if NZ is too expensive.

      Peter Jackson is fighting to grow the film industry in NZ. If you resist against him and against Hollywood, then you’re fighting against the entire film industry. Nothing will ever be accomplished.

      • You’re clearly not familiar with the film industry.

        Why? Is it some holier-than-thou industry that is superior to farming? Manufacturing? Dentistry?

        You’ll forgive me if I don’t buy into your air-of-superiority crap surrounding “The Film Industry”.

        Peter Jackson is fighting to grow the film industry in NZ. If you resist against him and against Hollywood, then you’re fighting against the entire film industry. Nothing will ever be accomplished.

        “Resist”?

        Hell yes, I “resist against him and Hollywood” (and others) who manipulate the public and interfere with worker’s rights to be employees, with all the rights and protections built up over the decades/centuries.

        Are you suggesting that just because Jackson and Hollywood are a “glamour industry” that we bow down to their demands?

        Are you suggesting we change our laws to suit Hollywood movie tycoons?

        And why stop at Hollywood? Why not remove ALL our labour laws to accomodate ALL corporate demands?

        You seem to think that “the movie industry” is an entity that should be given special rights?

        Screw that. I don’t buy it.

        Something you may wish to consider; Jackson’s career started with his “splattermovie” ‘Bad Taste’. It was completed with QE2 Arts funding (paid out of our taxes).

        Without taxpayer assistance, his career would most likely never have got of the ground.

        Under-mining worker’s rights and extorting $15 million extra out of the taxpayer, as an increased subsidy, is a poor way to repay the assistance this country gave to kickstart his career.

  6. This definition from Wikipedia of “suspension of disbelief seems pertinent to the subject of films and New Zealand’s 40 percenters:

    “Suspension of disbelief or willing suspension of disbelief is a term coined in 1817 by the poet and aesthetic philosopher Samuel Taylor Coleridge, who suggested that if a writer could infuse a “human interest and a semblance of truth” into a fantastic tale, the reader would suspend judgment concerning the implausibility of the narrative. Suspension of disbelief often applies to fictional works of the action, comedy, fantasy, and horror genres. Cognitive estrangement in fiction involves using a person’s ignorance or lack of knowledge to promote suspension of disbelief.”

    Also, applicable to theatre, btw, where Aristotle first identified it.

  7. Why don’t you ask some of the local newspapers about their contracted workers. Exactly the same as John describes here. Yes our local rags. They got rid of kids and employed adult contract workers Now no sick pay, no holiday pay, no stat days. They work every public holiday except Christmas Day. Those newspaper boards must be so proud.

  8. And on the wider issue of contractorisation, it works well when the contractor has very specialised skills that few others have, and hence can easily command a princely hourly rate.

    For many others, however, contractorisation is involuntary and usually the result of bare-faced union-busting. I interned with a couple of faults technicians contracting for Telecom in Wellington in early 2005, and I didn’t get paid a single cent, for the simple fact the contractors were barely breaking even, if at all. All the expenses – travel, tools, materials – fell on them, and in one case the contractor company later went bankrupt, despite sizeable profits at Telecom at the time and no shortage of work to do.

    But there’s hope yet. The ‘alt-labor‘ movement in the States is reaching out to independent contractors and and other workers barred from unionising by American law. (NB: Link is overloaded as of typing this, so Google Cache has a backup.)

    That aside, some industry sectors are in far greater need of unionisation than others. Forestry and transport are among the more obvious examples.

  9. Recently, I was socialising with about twelve acquaintances and I mentioned to them that I was boycotting any Jackson produced/directed movies because of the anti union bully boy tactics of the Warner Bros/Jackson juggernaut and its collaborationist Tory apparatchiks.

    I expected that I may have been in the minority because of the frequent indifference one often encounters in this country. However, I was pleasantly surprised when almost all these solidly middle class males indicated they were taking a similar stance.

    I am pleased that the Jackson camp has not been rewarded with the awards they had expected at the recent Oscars. Maybe some of those voting didn’t wish to reward the true snakes in this affair.

  10. I’ve often wondered why the studios allowed the film to be shot on location then also invested millions in building sound stages, office buildings, and editing suites on the other side of the world when they could’ve just paid a 2nd unit to get a few dozen helicopter shots of landscapes.

    I mean, honestly, they could have shot almost the entire film in LA sound stages (considering the amount of CGI and CGI landscapes used in Hobbit p1), then if needed flew to NZ for two weeks to get wide shots and saved a hundred million dollars.

    Utilizing contracts makes more sense on the one hand: Union workers are very expensive and come with a heap of restrictions which every production day has to be scheduled around. On the other hand if you want something always done right and on schedule by a tried and tested group, unions are the way to go.

    I digress. It does seem like the deal described in this article is quite poor and hopefully the contracted person negotiated something more reasonable.

    • Doing the movie in LA would actually require moving all the VFX teams to LA considering they have been setup in NZ for a long time. (weta is kinda NZ company..) also shipping of all the probs etc that weta make for the films

      also the buildings/soundstages etc have all been there for a pretty long time now, they didn’t just set that up for the hobbit, its actually a fully functioning studio..

      And using real sets is probably alot cheaper and faster then doing it all in CGI, even having a set thats kinda close to the actual end result, is way better then building it entirely in CG

  11. The example of the courier driver is awful, but I thought the employment court had already determined that such an arrangement was an employee relationship, nor a contractor relationship. I thought they ruled that if a person was unable to work for other companies then then they couldn’t truly be an independent contractor? Or is that what the vehicle charge is for ie a ‘get-around’?

    • I think you are correct on the first point
      (I thought the employment court had already determined that such an arrangement was an employee relationship, not a contractor relationship.)

      But honestly taking people to the employment is a long arduous painful process. Consequently companies still do this type of shonky thing.

  12. I take exception to Mr Minto’s calling Peter Jackson “emotionally fragile”. Union issues or no, a “fragile” person could make films that are such huge undertakings.

  13. Mental health issues should not be used as cheap insults… it really demeans and cheapens the daily struggle many face… not to mention it cheapens what is otherwise a valid argument …

    • It was Peter Jackson himself who claimed he couldn’t think about the film for 3 weeks because of the supposed stress caused by the Unions wanting basic human rights implemented – describing him as emotionally fragile and mentally fragile is an apt description.

      The attempt to negate the very valid points Minto raises and to forgive the lies the Government and Jackson spun over this manufactured crisis because Minto refers to Jackson’s condition as emotionally fragile is very emotionally fragile.

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