Film workers march in Wellington to plead with actors to abandon a boycott of The Hobbit.

Film workers march in Wellington to plead with actors to abandon a boycott of The Hobbit.

Film workers march in Wellington to plead with actors to abandon a boycott of The Hobbit.

Film workers march in Wellington to plead with actors to abandon a boycott of The Hobbit.

Film workers march in Wellington to plead with actors to abandon a boycott of The Hobbit.

Warner Bros has confirmed it is considering offshore locations for The Hobbit movies.

In a statement issued on Friday morning, the studio said the actions of unions had caused it substantial disruption and damage and forced it to consider other options.

The statement said reports the union boycott was lifted a number of days ago, and that Warners was asked to delay this announcement, were false.

It was not until Thursday night confirmation of the boycott being lifted was received from the US-based Screen Actors Guild and New Zealand Actors' Equity, it said.

The studio said it was still awaiting retractions from other guilds.

However, Council of Trade Unions president Helen Kelly reiterated today there was no outstanding industrial action and the unions would work with anyone to ensure the Hobbit films were made in New Zealand, on time and on budget.

GOVERNMENT MOOTS LAW CHANGE

The Government may rewrite employment laws and increase the $60 million subsidies available for The Hobbit as it fights to keep the two movies in New Zealand.

Prime Minister John Key said yesterday the Government was concerned the movies might be made overseas, and he offered to meet Warner Bros representatives when they visit next week.

The Government and director Sir Peter Jackson have blamed union actions for the possible loss of the two-film Lord of the Rings prequel, saying the international ban put on the movie during employment negotiations had undermined confidence in New Zealand as a location.

"What they saw as a predictable and settled environment ... now looks, because of the actions of the unions, to be a much more hostile and unpredictable environment," Mr Key said.

"All we can do is to respond to their concerns and give them the assurances they need."

The ban was lifted unequivocally by Actors' Equity yesterday and it said it had also promised there would be no industrial action during filming.

However Council of Trade Unions president Helen Kelly criticised Jackson and suggested Warner Bros may be pushing for increased assistance from the Government, using the union as a scapegoat.

She said that rewriting employment laws to please Warner Bros ran the risk of casualising the entire workforce.

"This isn't about the employment status of these actors it's about whether, as independent contractors, they can collectively bargain commercial contracts, and we say they can and Jackson says they can't.

"All they'll do by changing the law is casualise a whole lot of workers, because they won't just change it for actors, they'll change the definition of employee for all New Zealand workers," Kelly said.

"It's not a surprise to me that this Government leaps at any chance to change employment law against workers' interests. It shows how little they understand this dispute, which is a worry given they're suggesting that they're the ones that are going to resolve it."

The threat of industrial action disrupting The Hobbit had gone and the real issue was Warner Bros' search for bigger tax breaks, Kelly said.

Ms Kelly said she regretted that instead of a resolution "calming the waters", a "war of words" with Sir Peter had broken out.

"It is inevitable that this has damaged relationships but we are committed to rebuilding those as circumstances allow. The main thing now is to ensure the films are made in New Zealand."

She hoped to meet Warner representatives when they were here next week, but doubted that would happen.

Mr Key said he understood Warners had been concerned about the ban. But it was also worried about a Supreme Court ruling that a model maker on the Rings trilogy, who worked for Wellington production company Three Foot Six, was an employee, not a contractor.

He would seek advice on a possible change that would remove the ambiguity in the law and open the way for the US$500m movies to go ahead.

"That's the area that they have concerns ... and they need to be sure they can make the movie without being injuncted in the courts," Mr Key said.

A source said the law change could be made within weeks.

Mr Key said there were strong reasons for the film to stay in New Zealand. It was a good location, Jackson wanted to do it here, and $100m had already been invested.

Higher subsidies than the 15 per cent on offer had not been discussed with the Government yet.

"Hollywood is always concerned about the bottom line and I think the actions of the unions have led them to start looking at other locations."

It is understood that overseas actors contracted to the movie had tickets booked to fly here and were signing contracts based on New Zealand law.

Finance Minister Bill English said a rough estimate put taxpayer support for The Hobbit at $50m to $60m already. He did not rule out extra assistance, but said the Government had not considered it.

He poured cold water on a possible labour law change. "I don't imagine changing the labour laws over one argument like this."

Ms Kelly said she believed Warners may always have planned to take the films elsewhere, but was trying to blame the unions to deflect criticism from Jackson.

The industry did not adhere to current agreements on hiring, she said. She had seen draft versions of The Hobbit contract that did not comply.

She understood that Jackson and his wife, Fran Walsh, felt personally hurt by the negotiations, which they saw as a personal attack on them by performers.

It had been agreed the ban would be lifted on Monday. Warner Bros had asked to consult about how it would be announced, but had not issued a press release so Actors' Equity lifted the ban yesterday.

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