Independent film production in Hungary, Romania, Slovakia and Slovenia

1. Independent film production in Hungary, Romania, Slovakia and Slovenia Iain Reid

2. Today’s Presentation • The preliminary findings: • Benchmarking • Freelancer status • Social Dialogue • State support for production • Training • Intellectual Property Rights • Major findings • Implications

3. 1. Benchmarking

4. Benchmarking (2) * Gross National Income per capita (World Bank 2006)

5. Employment within the region • Hungary ? 350 – 400 technicians (including art department) • Enough to crew 3 - 4 simultaneous films ? • Generally a shortage of crew so young crew promoted too fast • 30% - 40% of key people trained pre 1990 • Romania • Production very robust • More international co-production than domestic • 200 - 350 technicians • Shortage is trained young film crew

6. Employment within the region (2) • Slovakia • Difficult to ascertain crew numbers because many (80% ?) also work in Prague or Poland • Possibly enough to crew 2-3 features • Last year State television made 1,200 redundant so a large pool of enforced ‘freelancers’ • Slovenia • Probably 180 technicians • Challenge is the inconsistency of freelance work • Insecurity makes it an unattractive career so work force is aging

7. 2. Status of Freelancers • Employment objective is universal: producers want skilled workers available for short, probably fixed, periods • Some paid on a weekly rate with agreed overtime rates – but some arrange all inclusive deals. BUT • “freelancers” is a term that should be used very carefully because taxation systems encourage various deviations from “normal” practices. • In UK, self employed, feelance status very attractive (but rules make it very difficult to get into this category) • In Slovenia, freelance is default status when worker is denied employed status

8. Questions to determine if a UK worker is employed • Control • Does the worker have to obey orders ? • Are the hours of work specified ? • Is the worker supervised ? • Economic reality • Is the worker paid on a time basis ? • Can the worker hire others ? • Does the worker provide his own equipment ? • Has the worker invested in his/her own business ? • Does the worker pay his/her own tax ? • Des the worker get sick pay/holiday pay ?

9. Slovenian “employment” criteria • Article 4 of the Employment Relationship Act states employment is when: “the worker is.. included in the employer’s organised working process … [and] carries out work in person according to the instructions and under the control of the employer” • BUT Article 5 states employment requires that: “……a concluded employment contract” • The worker rarely gets that written contract and so is a freelance worker with few benefits. • National policy to move employees to freelance status. Now perhaps 50% of all workers ?

10. “Independent Film Workers” • Fixed Contract workers • On the payroll • Self employed workers • Submitting an Invoicing • Individuals working as Limited Companies • Invoice and paying themselves as EE’s • Sub contractors • Hire equipment too and maybe other workers • Service Companies • Loose co-operatives who share accountancy/tax costs • “Author’s Rights”   • Creatives who work for little pay and later royalties

11. The Worker / Producer Relationship • Employment Contract: • Fixed contract Workers • Self-employed worker • Service Contract: • Limited Company • Sub contractor • Service company • Both ? • Authors’ rights

12. No The gross sum producers are able to pay crew is limited so individuals might as well utilise the tax system to their best advantage Most crew pay enough tax to acquire pensions, social security etc.. Most crew know the going rate and the risks involved Other EU countries have similar situations Yes A service contract effectively places workers outside the provision of the employment laws Producers avoid responsibility as employers and “duty of care” Leaves many unresolved questions i.e. insurance Not conducive to a viable social dialogue So is this a problem ?

13. 3. Social Dialogue • Essentially, no social dialogue exists • No collective bargaining exists • Little tripartite discussion of any of the matters that relate to the “common interest” – but there are exceptions… • Future possibility in some countries that dialogue may be established between unions and the “state” wanting to ensure transparency in the use of government funds

14. Terms & Conditions of “Employment” • Crews rates very difficult to define -although usually some concept of “acceptability” • Crew often offered a flat rate for the production • Normal working day: DEN SWE HUN ROM SVK SLO 8 8 12 12 14 12 • Generally a 6 day week • If any attention to manning, travel, weekend working, holidays, illness, breaks etc. then usual relies up “custom”.

15. Social Dialogue Requirements • “Strong, independent workers' and employers' organizations with the technical capacity and the access to relevant information to participate in social dialogue” • “Political will and commitment to engage in social dialogue on the part of all the parties” • “Respect for the fundamental rights of freedom of association and collective bargaining” • “Appropriate institutional support” (ILO)

16. Strong organisations ? • Film Technicians • Union density is low, sometimes very low • Film technicians do not naturally associate – anywhere. Even Denmark & Sweden density is not 100%, especially among young workers • Film Creatives • Invariably more interested in creativity than deals

17. Strong organisations ? • Producers • Entrepreneurs and usually competitive with each other • Most countries appear to have a small number of powerful production companies that set the rates • Smaller “production companies” (often lone producers or directors) sole interest is in getting projects established

18. Political will and commitment ? • All producers appear to recognise the need for quality crew and thus appreciate the need to provide a reasonable income • Some evidence that some producers realising the benefits of association: • Payment terms • Weather days • Insurance • Mark ups

19. Freedom of association and collective bargaining ? • Producers fear is that any shift towards CB will make will make productions uneconomical • No evidence of resistance to union– except in some TV stations • Very difficult to come to collective bargaining agreements with: • No power base amongst technicians • No employers’ organisation • Distant state partners

20. Institutional support ? • Even when relationships are bipartite, the State has a role in creating the legal, institutional and other frameworks which enable the parties to engage effectively. • Shown that taxation avoidance is pushing crew away from the employment relationship • State institutions disinterested in social dialogue ? • BUT Hungarian Tax Relief system shows what can be done collectively

21. 4. State support for production • No country has enough domestic demand to maintain a national cinema without state support • All governments state their desire to encourage “national” and international production • All countries have established separate bodies to distribute funds – although some distribution processes more transparent than others • Differences in additional support re film festivals, promotion, development etc.. • Differences in status of former state studios

22. The Funding Process • Challenges seen by applicants: • The process is not transparent • The criteria are biased to old/new • Challenges seen by state funders: • Quality of scripts • Financial irresponsibility of producers • Instability of production companies • Commercial viability of the final product • Art vs. Commercial films

23. Cinema Audiences

24. 5. Training • In general, training for Film Creatives (directors, writers, editors etc) is well provided for in every country • Challenge is the training of the next generation of Film Technicians • More professionalism needed from producers ?

25. Training (2) • Anecdotal evidence that the work force is aging: • Those trained pre-1990 more established and can cope with the uncertainty of film employment • Less investment in training in the 1990s • Uncertainties of employment mean younger workers cannot get established – and so quit or migrate

26. 6. Intellectual Property Rights • Almost all film workers sign away their intellectual property rights (as part of their contract) unless there are tax advantages in receiving payment as “Author’s rights” • One producer would “try to” pass on royalties etc the crew but the majority of producers want complete control of the finished film.

27. Summary of Findings • All four countries have the capability to maintain a viable film industry. • Some are rather more robust than others • Current taxation systems distort and often negate the employment relationship • The existing organisations are unlikely to be able to establish a workable social dialogue • State funding is essential, but all parties need transparency and agreement for it to work effectively

28. Summary of Findings (2) • Those trained in the socialist era are aging • Insufficient development of young technicians – and insufficient work to provide the necessary stability • In general, intellectual property rights are assigned to producers automatically

29. Implications ?

30. Social Dialogue requires: “The exchange of information between…. representatives of governments, employers and workers, on issues of common interest relating to economic and social policy.” (ILO)

31. The Social Partners are Natural Partners ? • There is no film employment without a viable film industry • Producers need a pool of capable film creatives and technicians – but they also must be able to produce competitively • Governments are natural and willing partners of production because: • They want to maintain a national identity through national cinema • They want to attract foreign investors

32. The inter-dependence of a viable film sector

33. Areas that Social Dialogue could address… • Favourable tax incentives to encourage co-producers • Reform of the taxation of independent workers …or at least recognition of their necessit • Transparency of State funding • Contracts of employment • Terms and Conditions • Insurance • ‘Duty of care’ • Training of the next generation of technicians

34. So how do unions get a voice ? “There are three kinds of power, the power of wealth, of talents, of numbers.” (‘Crisis’ 3rd May 1834) Perhaps can now add “The Law” ?

35. Wealth • The power of wealth is with the producers • Difficult bargaining area for loose affiliations of freelance workers • But that wealth of producers often comes from the State • Therefore a legitimate call for transparency and the maintenance of basic employment standards ?

36. Talents • The possession of a skill is only powerful if it is irreplaceable and can be withheld • Reality is that is unlikely in a European market and among independent workers • Those in key positions may be able to exercise the power to protect their subordinates – but it needs courage, confidence and unity

37. Numbers • The power of numbers is not easily mobilised in a creative industry • However, may be able to raise membership by added benefits: • Websites • Screening • Diary services • Training • Open days

38. Law • Should the unions challenge the definitions of ‘employment’ commonly accepted in the new EU member states ?

39. Questions ?