New Zealand passes Hobbit labour law

New Zealand has passed controversial legislation to keep production of twolucrative Hobbit films in the country.

Prime Minister John Key was forced to hold emergency talks with Warner Bros. and New Line Cinema this week after the studios and director Peter Jackson threatened to pull the $500-million US productions.

The studios and Jackson were angry after the actors union called a boycott because it didn't have a contract with the production. The union, and their counterparts around the world, called off the boycott but bad feelings remained.

Thepossibility thatNew Zealand might lose the productions triggered a series of countrywide rallies on Monday ahead of the talks. Many in New Zealandwere upset over the potential economic loss and phoned in threats to the union.

Independent workers, not employees

As a result, the studios won an additional tax break of $15.4 million, on top of the $46.3 million already pledged by the government.

New Zealand will also contribute $7.6 million to help with marketing costs of the two films.

And on Friday, it amended labour laws in which film industry workers are deemed independent contractors rather than employees.

The union had demanded that local actors and other production workers be hired as full-fledged employees on union contracts.

Opposition politicians criticized the government's move.

"What is the government going to do next give in to any multi-national that asks for a labour standard to be diluted in return for some form of investment?" said Labour Party lawmaker Charles Chauvel.

The labour law amendment passed 66-50.

The Hobbit, based on the J.R.R. Tolkien novel, began production in New Zealand earlier this month with British actor Martin Freeman in the main role. The films are set for release in December 2012 and December 2013.