Is a worker who builds models of Middle Earth used in the production of new The Hobbit movie an “employee”, or an “independent contractor”? How about the actor who plays Frodo, or Gollum, or the guy who makes those damn dragons fly?
That question has been at the centre of a political and legal storm in New Zealand. A model maker went to court arguing that the movie 
company had improperly labelled him an independent contractor in order to avoid paying him benefits available to employees. He won. That set off a huge and bloody war that even the Orcs would have loved. MGM Films to threaten to pull the entire $670,000 million production out of New Zealand unless it could call all the workers independent contractors to avoid New Zealand labour laws. Needless to say, the union representing the industry was not pleased.
To the rescue came the New Zealand government, as reported in this New Zealand Herald piece. The government was already giving the company huge tax breaks ($34 million) and even paying part of their marketing costs.
Now the government has introduced a law that says that, if the film company calls you an “independent contractor”, then you are an “independent contractor”, dammit. You can’t argue that in fact you are employee, according to the usual tests used to decide if someone is an employee or an independent contractor, and you can’t later claim any benefits available to “employees”.
The tests for determining this are very similar in New Zealand to ours in Canada. The new law will apply to the entire film industry, essentially ensuring that workers in film production will not be entitled to benefits available to employees under employment laws. The government is facing considerable criticism from worker groups and some opposition politicians for changing social protection laws at the request of a foreign corporation, but the government says its necessary to ensure the films are made in N.Z.
When American Companies Pressure Canadian Governments to Gut Employment Protections
There are examples of Canadian governments gauging labour laws at the request of American corporations. One was the so-called Michelin Amendment in Nova Scotia in the late 1970s. Michelin has two factories in the province, and there was strong support for unionization in one factory but not the other. The Labour Board ruled that a bargaining unit of one factory was appropriate, opening the door for one of the Michelin factories to be unionized. Michelin’s strong objection to being unionized, and the government’s fear that the company would pull out of the province, led the government to amend the law to say that, if a company with more than one facility in the province request, the appropriate unit will be all facilities in the province. Puff, no union!
The other famous example happened right here in Ontario. The Labour Board ruled Wal-Mart threatened to close the store if the workers voted for a union, thereby destroying the possibility of holding a fair vote. Therefore, the Board certified the union as a remedy for the Employer’s illegal threat. This was the usual result when employers threaten workers. But Wal-Mart cried foul, and complained to the Mike Harris Conservative government that it is not fair that employers should be punished for breaking the law and threatening employees by an order certifying the union. So, Harris changed the law! The new law said that, under no circumstances can the Labour Board certify a union as a remedy for the employer breaking the law. Even if an employer lined up all the employees who support the union and mowed them down with a machine gun, all the Board could do is order a vote. That law became known as the “Wal-Mart Bill”. It has since been repealed by the Liberals (remedial certification is the law today in Ontario).
What do you think about governments gutting labour and employment law statutes in order to appease foreign corporations? Is this justified?
[Thanks to one of my readers for pointing out this story, and for making the observation that it may only be a matter of time before film companies will be asking Canadian governments to introduce similar special rules here)
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