Towards A Fair Deal: Part III
Previous: Part II – European Legislative Remedies • Next: Recommended Action – Towards a Fair Deal
In Part II of this paper we discussed legislative provisions in European law that can help to protect creators from unfair practices by stronger negotiating partners. In Part III we will discuss certain aspects of Canadian law that alleviate to a certain degree the structural imbalances which exist between creator and producer in Canada. However, for reasons discussed below, most are insufficient in themselves to do much to improve the status of creators.
In addition to a few provisions in the Copyright Act governing transfers of copyright, there are legal doctrines found in Anglo-Canadian case law that may from time to time benefit the rare Canadian creator with the economic means to litigate on grounds such as the unconscionability of a contract, inequality of bargaining power, and restraint of trade. As well, collective administration of rights and the labour relations component of “status of the artist” legislation can be important mechanisms for many creators.
The Copyright Act provides that no assignment or grant of an interest in a copyright is valid unless it is in writing signed by the owner of the right or the owner’s agent, and also that where author is employed by a newspaper, magazine or other periodical, the author shall be deemed to have reserved a right to restrain publication of his or her work other than as part of that newspaper or other publication. As well, the Copyright Act also provides that moral rights may be waived but not assigned. Unless otherwise provided in the author’s will, copyright reverts to the author’s heirs 25 years following his or her death.
There will be some increased protection for photographers and moral rights for audio performers when Canada amends the Copyright Act to implement the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, but neither of these treaties concluded in 1996 mainly to address the challenges of digital technologies will otherwise do anything to change the imbalance in contractual relations existing between creators and producers in Canada. These so-called “Internet treaties” have not yet been implemented or ratified by Canada.136
The Bankruptcy and Insolvency Act provides for the reversion of rights in an unpublished book without financial cost to the author if no expense has been incurred by a bankrupt publisher or if the author reimburses the trustee for the expense incurred or if, after six months, the trustee decides not to carry out the contract. In the case of a published book, the author has no entitlement to reversion but the trustee may not assign the copyright or license the work except on terms that will guarantee the author royalties. This legislation does not apply in insolvencies other than a bankruptcy and does not specifically assist authors other than book writers, but in Re: Song Corp. a court was prepared to extend the benefits of this provision to the copyright in musical works.137
That certain legal doctrines can be used to override inequitable contracts was demonstrated in a series of important United Kingdom cases, which include Schroeder Music Publishing Co. v. Macauley (1974)138 (Schroeder), Zang Tumb Tuum Records Ltd. and Another v. Johnson (1988)139 (Zang), and Silvertone v. Mountfield (1993)140 (Silverstone). In Schroeder, the House of Lords determined that a standard-form agreement that had resulted from inequality in bargaining power between a songwriter and a corporation was unenforceable as a restraint of trade. The agreement contained a number of one-sided, “unfairly onerous” provisions which, among other things, granted the publisher a worldwide assignment of copyright and permitted the publisher to enjoy the exclusive services of the songwriter for a five-year term with an option for a second five-year term if royalties from the first term exceeded a stipulated modest amount. Moreover, the songwriter was unable to terminate the agreement in the event that the publisher chose not to publish the compositions. In rendering its decision, the House of Lords saw to it that the publisher was unable to uphold the unconscionable bargain that it had been able to strike because of its superior bargaining power.
For similar reasons, a similar conclusion was reached in Zang where the English Court of Appeal was concerned by a number of the terms in agreements between the band Frankie Goes to Hollywood and two related publishing and recording companies. Included in these concerns was the fact that Holly Johnson, the lead singer of the band, would be unable to perform his own songs owing to the world-wide assignment of copyright in the publishing agreement.
Interestingly, in connection with the United Kingdom Government’s current review of intellectual property issues, there is currently a call to legislatively address some of the issues arising in Schroeder, Zang and Silverstone. In this vein, U.K. lawyer Ben Challis has suggested that any extension of copyright term in sound recordings should be accompanied by provisions that protect and encourage the people who actually make sound recordings. In the view of Challis, these would include the following:141
Acting collectively is an important way for creators to gain bargaining strength they do not have as individuals. Where it is not economical for individual creators to license particular uses of their works, it has proved advantageous for them to form a collective society that can license a work either on a transactional basis or as part of a blanket licence covering the works of many rightsholders, collect royalties and pay the creator or other rightsholder. Provisions in the Copyright Act except the operations of collective societies from certain provisions of the Competition Act, which excepts the collective bargaining of trade unions from being considered in restraint of trade but not collective societies.
Many collective societies today are at a crossroads, as the extent of their role in the digital environment is not yet clear. They are seriously engaged in developing new ways of licensing the works of creators, and for some collective societies this will depend, to a large extent, upon revisions to the Copyright Act that would encourage or facilitate collective administration. At a more fundamental level, the continuing success of collective licensing will also depend on whether individual creators perceive an advantage to themselves in entrusting the licensing of digital rights to a collective society – that is, greater benefit from the deal the collective society can make than from the deals creators can make individually.
Most collective societies grant licences to users or apply to the Copyright Board for a tariff applicable for certain uses. However, the Canadian Private Copying Collective collects a levy from manufacturers and importers on blank tapes and other blank recording media, intended to provide compensation to rightsholders – both authors and performers of musical works embodied in sound recordings as well as sound recording producers - for the copying of a sound recording by individuals for private use. These rightsholders are entitled to remuneration in respect of such copying, which is not an infringement, and the levy is based on a tariff approved by the Copyright Board. This right of remuneration, also granted to foreign authors on the basis of reciprocity, amounts in effect to a compulsory or statutory licence for the downloading of music for private use. Although compulsory licences in Canada have been generally viewed as a last resort and only legislated where neither collective nor individual licensing is practicable, it should be noted that a levy can be used to ensure fair compensation for authors and performers, as long as producers do not require creators to sign contracts transferring to them this right to remuneration.
Collective administration of copyright began in Canada as early as 1925 with the formation of the Canadian Performing Rights Society, a precursor of the Society of Composers, Authors and Publishers of Canada (SOCAN), which today represents more than 35,500 active composers, lyricists, songwriters and music publishers (with a total membership of over 80,000). The Copyright Act has provided for performing rights collective societies with respect to musical works and dramatico-musical works since 1931, but for collective societies administering a repertoire of works for other uses only since 1988, retransmission rights and off-air taping for educational institutions since 1989, and the equitable remuneration rights of performers and producers of sound recordings since 1997.
There is bargaining strength in numbers but it is not usual for all of a creator’s rights to be dealt with by a collective society. There will always be instances where it is more appropriate for the creator to negotiate his or her own deal, control the terms and conditions, and sign the deal. The drawback is that the average individual creator has little bargaining power where there is no labour relations framework. For creators in some sectors, this may be provided by “status of the artist” legislation, which is unique to Canada.
In 1976 the UNESCO General Conference suggested that a worldwide study on the “status of the artist” be undertaken. This was followed, a year later, by a joint meeting of UNESCO and the International Labour Organization to consider artists’ working conditions. Canadian Paul Siren, for many years secretary general of ACTRA, chaired a Joint Committee of Experts, which worked on a draft recommendation for consideration by UNESCO member states. In 1980 Canada signed the Recommendation Concerning the Status of the Artist (UNESCO Belgrade 1980). This international document, known as the Belgrade Recommendation – something short of a convention – committed Canada to improve the socio-economic position of creators in Canada. Its Guiding Principles include the following:
Member States should ensure, through appropriate legislative means when necessary, that artists have the freedom and the right to establish trade unions and professional organizations of their choosing and to become members of such organizations, if they so wish, and should make it possible for organizations representing artists to participate in the formulation of cultural policies and employment policies, including the professional training of artists, and in the determination of artists’ conditions of work.
By signing on, countries were acknowledging that artists should be entitled to proper remuneration, social recognition and social security, and be entitled to control their work. The document encouraged its signatories to promote and protect the status of artists and to recognize the right of trade union and professional organizations of artists to represent and defend the interests of their members.
Recognizing the part played by professional and trade union organizations in the protection of employment and working conditions, Member States are invited to take appropriate steps to: (a) observe and secure observance of the standard relating to freedom of association, to the right to organize and to collective bargaining, set forth in the international labour conventions listed in the appendix to this Recommendation and ensure that these standards and the general principles on which they are founded may apply to artists;….
This Belgrade Recommendation led, in 1986 in Canada, to the Siren-Gélinas Task Force on the Status of the Artist 142 and in 1992 to the enactment of the federal Status of the Artist Act, not fully proclaimed in force until 1995, which dealt with “professional relations” between independent creators and federal producers. Several years earlier, in 1987, the Quebec legislature had enacted legislation which served as a model for its labour relations component. Canada was the first – and today remains the only – country to provide a collective bargaining rights regime for self-employed creators. 143
In 1987 the Quebec legislature passed An Act respecting the Professional Status and Conditions of Engagement of Performing, Recording and Film Artists.144 This act resulted, to a large extent, from pressure from Union des Artistes (UDA) and other unions representing self-employed artists working in the performing arts, for the most part in sectors in which voluntary collective bargaining was already well established. Following a provincial labour board decision in 1982 which threatened to erode the ability of UDA to represent certain of its members who could be viewed as salaried rather than independent workers, UDA began to push the Quebec Government for a labour law covering independent artists in categories represented by UDA. The demand by the unions for special labour legislation for artists reinforced the international status of the artist activities sponsored by UNESCO and resulted in 1986 in a provincial legislative commission on status of the artist and in legislation the following year.
This 1987 Quebec act on status of the artist created a labour relations regime applicable to professional artists working mainly in theatre, opera, music, dance and variety entertainment, film, sound recording and, since 2004, multimedia,145 mostly self-employed artists but also some deemed to be self-employed for the purpose of the act.146 A tribunal known as the Commission de reconnaissance des associations d’artistes et des associations de producteurs was appointed by the Quebec Government, with responsibilities that included granting and withdrawing recognition to artists’ associations, appointing mediators and arbitrators and advising the Quebec Government on the administration of this act.
Where the Commission is satisfied that an association that has applied for recognition comprises the majority of artists in a particular sector, it will grant recognition to it, subject to certain by-law requirements.147 Twelve associations are currently recognized for bargaining. The following rights and powers are conferred on artists’ associations by recognition:
This last provision is the one that allows for the negotiation of collective agreements with producers or associations of producers stipulating minimum terms and conditions for the engagement of artists, while removing the risk of this collective bargaining from being viewed by competition authorities as monopolistic and in restraint of trade. Producers may form associations for the purpose of negotiations, and if there is a recognized producers’ association, the recognized artists’ association may only negotiate with it.150 Unfortunately producers are not required to form associations for this purpose and no producers’ associations have been recognized.151 Consequently collective or minimum terms agreements must be negotiated producer by producer. A key provision of the 1987 act leaves an artist free to negotiate and agree on terms of engagement with a producer, but an artist and producer bound by the same collective agreement cannot stipulate a condition less advantageous to the artist than the condition stipulated in the collective agreement.152 The collective agreement binds the producer and every artist in the negotiating sector who is engaged by the producer, not just members of the artists’ association. It also would all bind producers who are members of an association of producers at the time of the signing or subsequently. If a producers’ association were to be recognized as the “most representative” in its field of economic activity, its collective agreements would have wider application, as they would bind non-member producers as well as member producers working throughout that field.153
When notice to negotiate is given by the recognized artists’ association or by the producer or association of producers, the parties must begin to negotiate at the time fixed in the notice and negotiate in good faith.154 At any stage of negotiations, either the artists’ association or the producer may request the Commission to appoint a mediator, who is paid by the Commission, and if the mediation has not resulted in an agreement during the negotiation of a first collective agreement, either the artists’ association or the producer may ask the Commission to appoint an arbitrator, again paid for by the Commission. An arbitration award has the same effect as a collective agreement.155 In the course of a negotiation for a subsequent collective agreement, the request for arbitration can only be made jointly by the parties.156 However, an amendment in 2004 provided that a collective agreement can stipulate that the minimum terms and conditions continue to apply until a new agreement is signed. 157 If no agreement is reached and no arbitration commenced, the recognized artists’ association may initiate concerted action to induce the producer to conclude a collective agreement. Producers have a similar right.158 Copies of collective agreements must be filed with the Commission.159 The 1988 act was amended in 1997 to include a grievance arbitration procedure.160
A second Quebec act on status of the artist followed in 1988, entitled An Act respecting the professional status of artists in the visual arts, arts and crafts and literature, and their contracts with promoters.161 This 1988 act was intended to facilitate the negotiation of agreements between recognized associations representing self-employed professional artists and individual producers (called “promoters” in the unofficial English language version of the act) or an association representing a group of producers that would establish minimum terms for agreements between individual creators and producers. Initially welcomed by creators as a tool to protect their rights concerning the “circulation” of their works, including the “sale, lending,…exhibition… public presentation, publication or any other use of the works of artists” in their dealings with a “promoter”,162 artists and their associations and artists eventually discovered that the rights and protections it offers are of little practical help.
The Commission already established under the first act was given responsibilities under this subsequent act as well, but its authority was significantly more limited. These responsibilities include recognition of the association or group that is “most representative” of all the professional artists working in a particular field of visual arts, arts and crafts and literature. The Commission’s lack of powers is reflected in the wording of the listed duties of a recognized association, which “may…represent its members for the negotiation and performance of their contracts with promoters” and “may…draw up model contracts for the circulation of the works of professional artists and propose the use of such contracts to promoters.”
Nothing in this 1988 act requires a producer to negotiate with the artists’ association despite the association’s recognition by the Commission or requires producers to form groups for the purpose of negotiations with artists’ associations. Nor is there any provision for recognition of producers’ associations (recognition is a possibility although not a reality under the 1987 act). A recognized artists’ association is therefore faced with the prospect of negotiating with a great number of individual producers, albeit a theoretical prospect since none wish to negotiate at all. In any case, without the possibility of recognition for a producer’s association, whatever might be negotiated with such an association would not extend beyond its membership to the whole sector.
Association nationale des éditeurs des livres (ANEL), for example, has refused to resume broken-off negotiations for a minimum terms agreement with Union des écrivaines et écrivains québécois (UNEQ), which was recognized by the Commission to negotiate for all writers, although recently there has been an amendment to the 1988 act that allows Association québécoise des auteurs dramatiques (AQAD) on behalf of playwrights to negotiate with producers subsequent to the commissioning producer.163 (AQAD is also recognized under the regime of the 1987 act to negotiate with commissioning producers.) The 1988 act presents a further problem for UNEQ, which has crticized the narrowness of its definition of “literature”, which falls considerably short of covering all works of all of its members, and has lobbied without success for an amendment to cover a broader field of writing.
Unlike the earlier act, the 1988 act does not provide for the appointment of either a mediator or an arbitrator to assist the artists’ association to reach a first contract with a producer or group of producers. The lack of such provisions has turned out to be a major flaw. Not surprisingly, although four artists’ associations have been recognized under this second act, two of which were formed in response to it, no contracts have been negotiated.164
The 1988 act also requires a signed written contract between creator and producer, stipulates various matters that any individual contract between any artist and producer must address,165 and allows substantial fines for certain deliberate violations, although compliance and enforcement are problematic. It is easy to see in these requirements the influence of European droit d’auteur regimes such as the German publishing law and the French Intellectual Property Code.
Quebec contracts since April 1, 1989, when the law affecting artists in the visual arts, arts and crafts and literature came into effect, must set out the following:
There are additional requirements for agreements between an artist and a producer, some concerning a future work.167 As well, a producer must keep a separate account for each contract with an artist, recording all payments received from others and, where applicable, the number of copies printed and sold; it must provide these reports at agreed times, not less frequently than once a year; and the artist is entitled to have an expert of his or her choice perform an audit of these records at the artist’s own expense.168 In the case of works of art, a gallery or auction house, for example, must keep a register of works of art that it possesses but does not own, and artists may examine this register.169 A producer is prohibited, without the artist’s consent, from giving rights obtained from the artist by contract as security or granting a security on a work subject to a contract and owned by the artist.170 Additionally, a contract is “terminated if the promoter commits an act of bankruptcy or has a receiver order issued against him under the Bankruptcy and Insolvency Act (Revised Statutes of Canada, 1985, chapter B-3), if his property is taken possession of according to law or, in case of a legal person, if such legal person is liquidated.”171 Unless the artist and producer agree to give up this right, contract disputes between artist and producer may be submitted to arbitration if requested by either party.172
Commendable as these stipulations for individual contracts are, it seems that many producers do not comply with them. Moreover, without any mechanism to force producers to negotiate agreements, the professional relations component of this act is woefully inadequate, not having resulted in any collective agreements or even model contracts. In short, whether well-intended or window-dressing, the provisions of the 1988 Quebec act, unlike the 1987 act, have generally done little to benefit creators in Quebec.
The federal Status of the Artist Act, operational in 1995, has a labour relations component similar to that of the 1987 Quebec act, allowing bargaining between associations representing creators who are self-employed professionals and federal producers for collective agreements. These “scale agreements”, as they are called in the federal act, establish minimum terms for creators’ services but leave the individual creator free to negotiate better terms.173 Federal “producers” are government institutions (federal government departments and most federal agencies and crown corporations) and broadcasters under the jurisdiction of the Canadian Radio-television and Telecommunications Commission (CRTC). This federal legislation established the Canadian Artists and Producers Professional Relations Tribunal (CAPPRT), which has responsibility for the recognition or “certification” of associations representing professional creators with respect to particular sectors that CAPPRT determines as suitable for bargaining.174 CAPPRT will certify the “artists’ association” that is “most representative” of professional artists in a sector and, once certified, that association has exclusive authority to bargain for all individuals working in the sector for which it has been certified.175
The federal act has no provision for certification of associations of producers, but producers may form an association for the purpose of bargaining and entering into scale agreements.176 Producers who are members of the association at the time of signing or subsequently are bound by a scale agreement.177 Unfortunately producers are generally unwilling to bargain as groups. Of the 26 artists’ associations certified by the CAPPRT, only 14 have scale agreements, most of which have been negotiated by associations with a history of voluntary collective bargaining predating the federal act and cover professionals working in the performing arts. It is mandatory for an artists’ association and the producer to “begin to bargain in good faith” if a notice to bargain is delivered by either to the other.178 However, there is no provision in the federal act for mediation or arbitration to assist in reaching a scale agreement and no certainty that negotiations will ever result in an agreement.
It is uncertain whether the federal Status of the Artist Act applies to existing works, as writers’ organizations TWUC and UNEQ discovered, UNEQ in its negotiations with the federal government for a scale agreement and TWUC in its certification application, which was unsuccessfully challenged in its scope by the Departments of Canadian Heritage and Public Works. Either through choice or necessity, many creators work with no contract until their work is finished, and other creators of previously published or performed works frequently re-license these to subsequent producers. It is therefore essential that these creators, like creators who are engaged prior to creating a work, be covered by the relevant scale agreement and that, if need be, the legislation be clarified.
Other suggestions have been made for changes to the federal act, including establishing a single bargaining authority for all federal government departments and providing mediation and arbitration at the request of either party at least for first agreements.179 Consultants, engaged by the Department of Canadian Heritage to a carry out a required review of the provisions and operation of the act,180 reported in 2002 that the legislation was strongly endorsed by almost all of those they consulted but, pointing out that this would be consistent with the Canada Labour Code and the Quebec 1987 status of the artist act, recommended an amendment to include a provision for ensuring first contract negotiation and arbitration.181
The federal act, like the 1987 Quebec act, is a significant attempt by government to address the dismal socio-economic condition of most self-employed creators in Canada by providing a legal framework for collective bargaining, although mainly in sectors where voluntary agreements already had been established, and by removing the threat of action being taken by authorities under the Competition Act. However, more artistic production comes under provincial jurisdiction than federal jurisdiction. Creators deal mostly with producers who are not federal producers, and in other instances their organizations have not been able to negotiate minimum terms agreements with the federal producers they do deal with. Consequently, the federal Status of the Artist Act has been of little help to most creators except to provide a model that individual provinces might adapt.
Some provinces have looked at the possibility of status of the artist legislation but, besides Quebec, only Saskatchewan has legislation under this rubric, unfortunately an act without a labour relations component. For that reason Saskatchewan’s 2002 act, replete with motherhood statements on the importance of artists’ creativity and their valuable contribution to society, is considered by most creators’ organizations to be a travesty of “status of the artist” legislation.182 The Saskatchewan legislation is currently under review, but if a recommendation of a 2003 ministerial advisory committee on the Status of the Artist is followed, it may do little more than to provide dispute resolution support for voluntary collective bargaining.183 A second ministerial advisory committee appointed in 2006 again only envisaged voluntary, membership-based rather than sector-based collective bargaining with access to enforceable collective bargaining possible in future.184
In September 1992 the Ministry of Culture and Communications in Ontario published a Summary of Consultations with the cultural sector which recognized, among other things, that existing collective bargaining in the arts depended on voluntary recognition of artists’ representative organizations and that, with respect to labour rights and social benefits, the existing legislative framework for labour relations might be inappropriate because it does not consider the unique characteristics of the arts sector. More than a decade later, status of the artist legislation is again under consideration in Ontario because of renewed pressure from creators and creators’ organizations. In a submission to the Minister’s Advisory Council for Arts and Culture in May 2006, the Ontario Federation of Labour (OFL) urged the provincial government to recognize the important contribution that artists make towards the cultural, social, economic and political richness of Ontario and the need for a legislative framework to govern relations between artists and producers, while pointing out that provincial legislation should not dismantle or interfere with national agreements that already cover many Ontario cultural workers:
….Cultural workers need the right to organize and be represented by a union or association. They should be covered by collective agreements which are enforceable by legislation…. 185
The advantages of mandatory collective bargaining to creators cannot be overstated. With such agreements in place, creators’ associations can generally represent and serve their members effectively, not only through the negotiation of higher payment for their services and better working conditions but also through administration of pension funds, insurance and other social benefits.
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Next: Recommended Action – Towards a Fair Deal
©2006 Marian Hebb and Warren Sheffer. This study was produced for The Creators' Copyright Coalition and The Creators' Rights Alliance / l'Alliance pour les droits des créateurs with the generous support of the Department of Canadian Heritage, the Canada Council for the Arts and the Government of Ontario through the Ministry of Culture. You may reproduce and distribute this work for non-commercial purposes, in whole or part, provided you give credit to the authors, CCC and CRA/ADC. Please distribute freely. • Webpages: Patrick Davidson • The outline map of Canada used in the logo is from The Atlas of Canada, as compiled and produced by Natural Resources Canada, and is used with permission.
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