The Hobbit law was passed under urgency after negotiations between the National-led Government and Warner Bros executives in 2010, after a threat to take the shooting of the films to offshore locations.
The furore was over a union attempt to engage the company and workers in collective bargaining, which led to heated exchanges between Sir Peter Jackson and Helen Kelly, and angry street protests.
The Hobbit law had, in practical terms, made film industry workers contractors, who cannot legally collectively bargain.
Previously, workers could potentially disrupt a production by testing their worker status and, if confirmed as an employee, start collectively bargaining. It was this uncertainty that was highlighted as potentially keeping film producers from making productions in New Zealand.
Lees-Galloway said the law effectively denied rights to film industry workers that were available to other workers in New Zealand.
One possible solution, he told the Herald, was to amend the law and allow contractors to collectively bargain.
"The industry has agreed to work collaboratively to find a durable solution to restore collective bargaining rights for film production workers, without necessarily changing the status of those who wish to continue working as independent contractors.
"The working group will examine how we can reach the right balance for workers and producers."
The group will meet over the next six months. its recommendations to the minister are expected by mid-2018.
