Thursday, October 28, 2010

Calling the Shots

A recent international headline caught my eye. It concerns the nation of New Zealand and how governmental leaders basically were blackmailed into changing national labor laws in order not to lose a lucrative movie deal.
A union leader has berated the Government for selling the "fundamental rights" of workers in order to convince Hollywood studio Warner Bros to keep the filming of The Hobbit in New Zealand.

A deal between Warner Bros executives and Government ministers was confirmed last night after two days of negotiations.

The Government has agreed to up to $34 million in tax breaks and help with marketing costs and an urgent change to labour laws.

The legislative changes will apply to the film industry - not just to The Hobbit movies - and will ensure that film workers hired as contractors will not be able to later argue in court that they were employees...
Reading between the lines, it's very clear that the Hollywood behemoth wants to keep its labor costs as stinkingly low as possible by not paying benefits to the majority of its workers. If most of their "employees" can be redesignated as "contractors", then the studio gets to pocket even more of their profits than before.
The amending legislation will be introduced to Parliament today under urgency and already has the support of the Act and United Future parties, which is enough to ensure its passage into law.

But Council of Trade Unions President Helen Kelly told National Radio this morning the changes were unnecessary and "opportunistic".

She said under the current law it was already clear whether someone was an independent contractor or an employee.

"The current law says that if you are employed as an independent contractor in any industry, the court can look through that contract and see whether if it is genuine - whether there are reasons for it, you're a company, you're trading in other places, you've got control over your work, you're pretty autonomous over how you do it - or whether you are actually an employee - you turn up every day, you work under instruction, you don't work for anyone else and you don't run any sort of company [or] provide your own equipment, if it looks like you are actually an employee - it can deem you one.

"And then employment rights flow - sick leave, holiday, those sorts of things," Ms Kelly said...
While there's no question that New Zealand's government officials sold out the country's workers, the true villain here is the US-based film company. They basically put a gun to the head of the New Zealand government: Give us precisely want we demand or else you will lose a very lucrative $670 million contract!

In these international economic hard times, few political leaders ANYWHERE would have the will to walk away from that kind of money, so it's not surprising that they caved in. What else could they do?

This episode simply underscores that, too often, governments are far less powerful that economic giants. To be certain, governmental leaders can talk tough, but, when push comes to shove, they truly aren't in the power position. If they dig in their heels and stand their ground, big corporations easily walk away and quickly find a different governmental body with far less backbone.

The principled leaders who refuse to be blackmailed are lambasted from many sides for turning their backs on so-called needed economic development.


  1. i think they're less "changing" the labor laws, than clarifying them. if someone agrees to work as a contractor for a specific set of money and benefits, i think it's disingenuous to later demand more benefits from the company. so i have no problem with that part of what the film company asked for or what the legislators did.

    that said, i have a *huge* problem with the gov't giving the film company $100 million on money for marketing, tax breaks, etc. i don't think it's the gov'ts job to do that. that, to me, is where the real corruption is. and i've never quite been able to apportion the blame between the politicians for giving that unequal benefit to some and not others, and the corporations for asking for these special favors.


  2. I don't think it's as clearcut as many might think. These days a lot of corporations and businesses treat their workers as employees in every way, shape and form, but pay/benefits. They have the same expectations as they would have of an employee, but they don't want to foot the bill!

    I do agree, however, that it isn't the govt's job to do ANY marketing for a for-profit business.


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