Employee vs. contractor distinction key to 'Hobbit' talks

Round two in “The Hobbit” negotiations has been passed to the lawyers as legal teams from Warner Bros. and New Zealand’s government meet to discuss possible changes to the country’s labor laws.

The studio has been spooked by an actors boycott, which was lifted last week, on the two “Lord of the Rings” prequels. But also at issue is the question of whether workers on the Peter Jackson-helmed project are to be treated as employees or contractors under Kiwi law.

This gray area follows a court case in 2005 in which formerWeta Workshop modelmaker James Bryson fought for the right to be considered an employee rather than a contractor. He won the case, opening the way for other contractors to do the same.

Employers prefer contractors because they are cheaper and more easily dismissed than employees. This case was cited by the actors union during the boycott dispute.

Kiwi Prime Minister John Key said: “We will have to make an assessment about whether we think a clarification in the law would assist New Zealand economically. If we do, we might make some changes.”

Earlier, Key had said he was “not overly confident” of retaining “The Hobbit” and ruled out raising film subsidies, thought to be a key issue for the studio.

“We have made it quite clear that we can’t bridge the gap economically with what’s on the table from other countries — it’s simply too large,” Key said.

Key is set to meet Warners execs again before he travels overseas Thursday. He expects WB to make a decision by the end of the week.

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