Moto Goth Photoshoot, image uploaded to Flickr by Fred Camino, licensed under a CC-BY-SA license
Making films with a very low budget or no budget at all is a challenge which faces lots of Arts Law's clients. Films are made with borrowed cameras, friends step in as actors and technicians, the script is a one page plot line that evolves as filming progresses, and often the only perk is a round of drinks at the local pub when it's finally in the can. No one expects to make any money but everyone dreams that maybe this film might go somewhere. Sound familiar?
When the project is largely powered by love, obsession or grim determination rather than cash, the producer still faces many legal issues including potential legal liability. Arts Law has a low budget film and video pack of sample agreements designed for just that situation. One of those agreements has recently been the subject of extensive review and revision.
The Cast and Crew Agreement (Deferred Fees) sample agreement is for the situation where the producer of a very low (or no) budget film or video has no means of paying cast and crew prior to commercial release and it is quite possible that the film may never be commercially released. In other words, actors and crew members are working on the project primarily for the experience or to help out a friend. Even if the producer and the actor or crew member are best friends, it is still sensible to have an agreement in writing to make sure that everyone's expectations are the same and to cover the basic legal terms.
A film set, whether inside a studio, in a friend's backyard or in a public park, is essentially a 'workplace'. A film producer is likely to be considered to be in 'control' of that physical space while filming occurs and needs to deal with potential liability under Australia's employment and industrial relations law, anti-discrimination law and occupational health and safety law.
It may seem strange but if a producer can't actually afford to pay cast and crew on an hourly or daily rate (namely the producer can't afford to employ them) then Australia's employment laws can still be a source of substantial legal obligation. There's a real likelihood that the legal position is that the producer will still be regarded as the 'employer' of cast and crew and have legal responsibility for matters such as workers compensation. And under the Fair Work Act 2009 (Cth), an 'employer' cannot legally defer the payment of wages for work performed by an employee or enter an arrangement under which the employee might never receive any payment.
The Cast and Crew Agreement (Deferred Fees) sample agreement is drafted to avoid the producer being considered to be an 'employer' with all of the legal responsibilities that follow. Under this sample agreement, cast and crew members are engaged as 'contractors' not 'employees'. As a result, a deferred fee arrangement is possible.
There are two options for deferred fee arrangements. Media Entertainment and Arts Alliance (MEAA) is the Australian union and professional organisation for actors, journalists and entertainment industry employees. MEAA's policy on the deferment of fees for cast and crew members on approved low-budget projects states that deferred fee agreements with cast and crew members must provide for cast and crew minimum entitlements to be paid prior to any commercial release, exploitation or exhibition of the completed production. See MEAA's Low/No Budget Productions Policy (www.alliance.org.au/resources/equity/5/10/name/ASC/). Arts Law fully supports that approach however recognise that there may still be some productions where an obligation to make payments before any commercial release would effectively prevent a producer from ever accepting a commercial release opportunity. This is because the only chance of any financial return will flow from the money made after the film's commercial release or exhibition. Arts Law's sample agreement is designed for very low or no budget films in which the producer has no real expectation of a commercial release opportunity and is unlikely to have the financial means to make any payments unless the film gets such an opportunity and does well. A producer intending to enter a short film into Tropfest who is hoping that the exposure from public exhibition as one of the finalists at the festival might lead to a commercial release opportunity elsewhere would probably use the Arts Law agreement if he or she had no funds to pay cast and crew before the public screening at the festival.
Following the changes to Australia's industrial laws and after receiving feedback from MEAA and film lawyers on Arts Law's pro bono panel, we decided to take a fresh look at the previous version of the sample agreement.
Employment lawyer David Cross, a partner at international law firm Norton Rose reviewed and revised the sample agreement to simplify and clarify it. Arts Law intern Matthew Vittone from Harvard University worked on the explanatory notes and considered ways in which the agreement needed to be changed to strike a more equitable balance between the parties. Some clauses that were considered to be unduly onerous on cast and crew members were altered or deleted. New clause 4 (non competition and conflicts of interest) makes it clear that the cast or crew member is free to work for other people or on other projects. This is an important feature of an independent contractor relationship. Similarly, and for the same reason, clause 15 makes it clear that the cast or crew member is responsible for providing his or her own personal accident insurance (although the producer should maintain public liability insurance). A clause in the earlier version requiring the cast or crew member to provide certain warranties to the producer and to indemnify the producer in relation to those warranties has been deleted. In the view of Arts Law, it is not fair to ask a cast or crew member who is accepting a deferred fee arrangement to provide warranties or an indemnity.
A number of clauses are framed to deal with the requirements of certain New South Wales legislation specifically the Workers Compensation Act 1987, the Payroll Tax Act 2007 and the Industrial Relations Act 1996. However, the instructions make it clear how the new version can still be used for film projects in states and territories other than NSW. As part of our ongoing review, we are working on the preparation of versions of the sample agreement for each State and territory.
A link to the new agreement is here. Arts Law strongly recommends that any producer or cast or crew member contemplating using this agreement as a template have their version reviewed by a lawyer. This can be arranged through Arts Law's document review service for subscribers.
Delwyn Everard is a senior solicitor at Arts Law.