Written By: - Date published: 8:59 am, March 18th, 2008 - 64 comments
Categories: assets, workers' rights -
Tags: assets, workers' rights
The recent scandal over Air New Zealand underpaying its Chinese workers to the tune of four times less than their New Zealand counterparts comes as no surprise given the sick management culture at our national carrier, and highlights some serious contradictions in the airline’s ownership structure.
Here we have a company that’s 80% owned by us, the New Zealand public, and yet because it is structured as a private company it’s allowed to act unethically and even undermine our national interests in the pursuit of short-term profit.
You will recall how Air New Zealand secretly ferried troops to Iraq in defiance of the New Zealand public, half-succeeded in gutting our high-skill, high-wage aircraft engineering industry, and has tried to cut the wages of thousands of Kiwi workers by contracting their jobs to third parties at lower rates and outsourcing anything that can’t be nailed down to low-wage economies.
It’s time we got some democratic control over our national carrier by bringing it into full public ownership and strengthened our labour laws to stop the airline undermining its workers’ pay and conditions.
Helen Clark shouldn’t be excusing Air New Zealand’s behaviour – she should be nationalising it.
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“Helen Clark shouldn’t be excusing Air New Zealand’s behaviour – she should be nationalising it.”
That’s laughable Tane. Why do you stop there? Why don’t you propose the nationalision of Fletcher Building, Hubbard Cereals, Steel & Tube, AIA, and the rest of private enterprise?
You should come clean and propose a socialist state where shareholder rights equal zero and the state owns everything. Otherwise let Air NZ deal with the wages problem in its own way, based on commercial realities, not political dogmatism.
Great idea, Tane. Turn a profitable business giving the taxpayer a return into a social service subsidised by the taxpayer.
Why do you stop there? Why don’t you propose the nationalision of Fletcher Building, Hubbard Cereals, Steel & Tube, AIA, and the rest of private enterprise?
We probably should, but that’s a different story. Air New Zealand is a strategic asset owned by the public but it’s not acting like it. Making it an SOE would mean it would have to be a decent employer and the public would have more control over how it operated. You definitely wouldn’t see any more secret flights to Iraq.
This seems both in tune with Santi’s ‘commercial reality’ and Billy’s ‘profitable business giving the taxpayer a return’.
Funny how the right’s tone has changed on this over the last few days.
On Saturday Farrar was calling for the government to act on its rhetoric and pull Air NZ into line, and his commenters agreed heartily.
Now that a plan to protect wages and rein in corporate management has been presented the right are screaming.
Be careful what you wish for guys, political opportunism can come back to bite you.
Yeah Tane, there’s absolutely no difference between
A) the Govt using it’s shareholing ‘muscle’ against something it dissaproves of (Daves)
and B) Nationalising the whole damn thing (Tanes)
Of course Phil you know that the existence of minority shareholders means the Companies Act severely restricts the Government’s ability to exercise any meaningful democratic control over Air New Zealand’s management.
We also wouldn’t be ‘nationalising the whole damn thing’ – we’d simply buy out the remaining 20% minority shareholding.
Ouch. Mention nationalisation and the Tories get themselves into a right frenzy.
You have to feel sorry for the wee beggars though – they want to play politics by calling on the government to protect the workers, it’s just they don’t like the left-wing consequences of what that would mean.
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Just goes to show where some people’s values lie. 80% owned by the NZ taxpayer; people appear to be happy for it to be using unfair and discriminatory pay scales, and the company actively tring to disadvantage NZ workers in other areas – but who gives a toss if it’s making money, right?
That’s all that counts right, commercial realities? I mean hell Santi, why would we care that our $350 designer jeans are made at 18c an hour in China? That’s a commercial reality too right?
MP- what’s even more interesting is a lot of Air NZ’s commercial decisions have been poorly thought out.
Take the aircraft engineering: they outsourced half of it to China (after trying to outsource the whole lot), then when business picked up they couldn’t get enough people to do the work because they’ve engineered a skills shortage.
That’s because when they did the outsourcing a lot of the skilled aircraft engineers went overseas for work – my brother in law’s a good example – and because the pay rates in NZ have been slashed Air NZ can’t get them to come back. It’s an international labour market and they’ve truly shot themselves in the foot.
The fact is a major strategic asset like Air NZ needs long-term thinking rather than short-term profiteering, but the current model of ownership only has a horizon of 3-5 years.
Tane, have to disagree with you on this one.
All we’ve read in the papers so far is a story fed to the media by Delamere from a disgruntled ex-worker. I’d suggest no ‘facts’ have been presented publicly to date.
However, everyone is jumping the gun making grandiose statements based simply on the Herald’s reporting.
In particular, no one has bothered to explore Chinese labour laws under which these cabin crew are employed.
There appears to be an assumption that Chinese workers can be run roughshod over. I can assure you from experience that labour laws there are very protective of the worker including the need for the employer to make compulsory payments to a medical, maternity, pension and even housing fund.
It’s also very likely that Air NZ had no choice under Chinese law about employing via a contractor.
One thing you can be assured of with the Chinese and that is overseas companies get away with nothing in regards to workers rights.
Did the Herald do the obvious things such as establish exactly what these cabin crew earn, what the typical industry pay scales are for Chinese cabin crew and most obviously, are any other cabin crew dissatisfied other than this dismissed employee.
It’s like Wishart’s secret ferrying story? There was no secret, only full prior disclosure by Air NZ to Govt officials. It was a beat up that evreyone then used for own political gains.
Everyone should await the outcome of the workers legal dispute with Air NZ to establish fact rather than being used as PR puppets by Delamere to push his client’s case.
This all has a funny side though and that is old Whaleoil asserting that the release of the Air NZ story was a govt smoke screen to deflect from the HBDHB report release. This 9th floor ‘scandal’ was a hot tip from a number of his reliable sources.
Fact is, there were no such sources or they are as deluded with paranoia as the Whale is. I’d suggest the former.
Can you imagine Delamere being the stool pigeon for a 9th floor political snow job?
The NZ Govt employs hundreds of people overseas at its embassies and high commissions. Do you think they are paid the local rate or the NZ rate? Is that fair or unfair?
Should Fonterra’s staff in their UK or Australia subsidiaries be paid the same as their NZ equivalents just to be ‘fair’? How many do you think they could attract?
Snelly Boy, youve gone off topic, the issue is that the Chinese workers are being paid bugger all for doing exactly the same work as the New Zealand workers.
Why on earth would we care what people are paid in China?, I could not give a toss.
I detest Klark with a passion but on this I happen to agree with her, it is none of our business and if Air NZ happen to return a better profit to its shareholders by employing cheaper labour then good on them.
The real issue for me is our 80% share holding, what on earth is our govt doing owning an Airline anyway.
insider. those comparisons don’t stand because you’re talking people on the same flight, doing exactly the same role
Steve P., do you know the split of kiwi/chinese on board a single flight?
There seems to be a notion of a ‘mixed’ crew. My observation was that it was all Chinese with maybe a couple of kiwi supervisors only.
I spend on average 4 to 6 weeks a year in London working. Whilst there do I expect my salary to be increased 2 to 3 times to match my colleagues there doing exactly the same tasks as me? Of course not.
Plus I reiterate, people commenting here are doing so based on assumptions gleaned from a newspaper story. I thought the Stranded community would be far smarter than that.
Lets nationalise teh Warehouse while we are at it eh.
Tane, why the hell should someone on a low income, who can barely afford the rent, be subsidising mine and my companies airfares around the country and beyond?
Why on earth would we care what people are paid in China?, I could not give a toss.
There goes the neighbourhood.
big bruv, for example, do you disagree with the law that you can be charged in New Zealand for using child prostitutes overseas? I mean who cares about thai children?
Extreme example (and in no way meant to be directly compared to Air NZ) but I’m wondering how much exploitation is a good level for low-life scum such as big bruv?
You got any kids?
MikeE, a functioning airline is probably fairly important to the economic well-being of New Zealand. I’d go so far as to argue that it is important whether it is economic or not – this type of interconnection is pretty important these days, even with the prevalence of electronic communication.
The Warehouse isn’t important in this respect, has never been publicly owned as far as I’m aware, and isn’t part of a modern country’s critical infrastructure.
Someone on a low income, barely able to afford rent, might be putting half a cent into Air NZ – I don’t even know about that – isn’t it making a profit? Maybe it’s the other way around. Fact is, having a decent airline, like roads, telecommunications cables and rail are the basis and foundation for much employment in this country – might even be the reason your wee chap has that low-income job in the first place. That this needs explaining is a worry, to tell the truth.
Lets nationalise teh Warehouse while we are at it eh.
While I don’t have an objection to that in principle it’s not a high priority of mine. There are a lot more pressing needs on public funds.
Tane, why the hell should someone on a low income, who can barely afford the rent, be subsidising mine and my companies airfares around the country and beyond?
You’re not subsidising airfares by requiring decent labour standards.
Is the Government subsidising coal and the postage system by having Solid Energy and NZ Post under public ownership?
Steve P., do you know the split of kiwi/chinese on board a single flight?
There seems to be a notion of a ‘mixed’ crew. My observation was that it was all Chinese with maybe a couple of kiwi supervisors only.
I spend on average 4 to 6 weeks a year in London working. Whilst there do I expect my salary to be increased 2 to 3 times to match my colleagues there doing exactly the same tasks as me? Of course not.
But if you were moved there permently you might expect that.
Full nationalisation should be a last resort.
What we should be asking is why are the management of AirNZ acting so unethically? Unlike the right, I don’t believe that private enterprise requires no moral barometer.
If it is the case that such ethical leadership is non-existant in NZ’s private sector, then nationalisation may have be considered.
Full nationalisation should be a last resort.
Why?
What we should be asking is why are the management of AirNZ acting so unethically? Unlike the right, I don’t believe that private enterprise requires no moral barometer.
Unfortunately the Companies Act disagrees. Companies are legally required to act in the interests of all their shareholders, and so long as there are minority shareholders with a stake in Air New Zealand the company is legally required to maximise profit in an amoral fashion.
Steve
Are you telling me that no NZ overseas post has a NZ employee and a foreign one working alongside each other at similar roles but with different T&Cs? Are you telling me Fonterra does not have the same? Or Air NZ in its overseas offices, or NZTE or F&P?
What you probably don’t know is that AIr NZ does it domestically. Former Mt Cook employees are in a separate company and have different T&Cs from Air NZ staff. I wonder if it is the same for the former Freedom staff?
Matthew
I am surprised that you would ever have a harsh word to say about the socialist mecca that is China.
Need I remind you that these CONTRACTORS are NOT kiwi’s, they are not our problem.
The Thai children you use as an example says more about you than I think you intended, in true socialist scum fashion you are prepared to use anybody or anything to achieve your goals.
The difference between you and I is that I would gladly shoot those who use child prostitutes, you however would rather council the pedophile and let him out again in a few years (as long as he voted Labour) to inflict his “will” on more innocent children.
insider, employees of Mt Cook Airlines and Air Nelson (Which is actually the largest separate company integarted in Air NZ’s service umbrella) are covered under NZ employment law and subject to NZ market conditions. Unless you wish to claim they’re being paid 1/4 of that of Air NZ employees I don’t see the relevance.
As for Fonterra – what stakeholder percentage does the government own?
MP – the relevance I would see is Air NZ’s continued practise of contracting out to undermine its workers’ pay and conditions.
Tane
Is this the same Air NZ that is 80% owned by the people of NZ?
Perhaps you should have a world with dear corrupt leader.
big bruv – so you care about some people overseas, but only in some circumstances. Would you like to explain where you draw the line? You see, in both cases, the practice wouldn’t be legal in New Zealand (depending on the actual working conditions of the Air NZ staff. If they are paid 1/4 of those in NZ, NZ flight attendatts would have to be paid about $44 an hour for their chinese counterparts to be paid at a rate that is legal in New Zealand). Therefore many would call this exploitation.
What level of exploitation do you find satisfactory, big bruv?
I’ll ignore your bigoted and vacuous last statement, you’re clearly unable to conduct sustained rational discourse (although you did well at the start, even if you missed my point and went with the childish temptation to make baseless generalisations instead of trying to discuss the point at hand) which is a shame.
Tane – fair call, though in this case I’d be more concerned with an income variance of 400% (if overseas employees are being paid 1/4 the rate of those here), than a smaller domestic variance, as the Mt Cook Air and Air Nelson employees are covered under NZ Employment Law.
Is this the same Air NZ that is 80% owned by the people of NZ?
Perhaps you should have a world with dear corrupt leader.
Bruv, I’d rather not have to call you stupid, but, well, you’re stupid.
What do you think the point of this post was?
Matthew
Re Mt Cook/Air Nelson, when absorbed by AirNZ their T&Cs were kept separate in the same way as the Chinese Air NZ staff, yet do the same jobs, and I’m talking about ground crew not air crew. You used the phrase “unfair and discriminatory pay scales” and I gave an example. Is it only relevant if there is a 4 times gap? WHere is the principle in that?
If government ownership is the benchmark for concern about such discrimination, what about MFAT posts abroad?
Insider- if you’re trying to defend Air NZ’s treatment of its workers then bringing Mt Cook and Air Nelson into it isn’t a good start.
Tane, my understanding of Chinese law is that you have no choice but to engage staff through a third party contractor. That’s the Chinese way. Air NZ would not have had an option.
“But if you were moved there permanently you might expect that.”
Kiinginthenameof, not only would I expect pay parity, I would demand it and get it. That’s exactly my point.
These are Chinese nationals living in and working from China.
Accordingly, they are not and can’t be subject to NZ employment law or market conditions but the laws and market of China.
For example, a Chinese cabin crew injured whilst working can sue Air NZ for negligence under Chinese law. A kiwi crew member hurt in the same incident can’t due to NZ law (ACC).
I’m not sure what your angle is Insider. Do you think it is ok or not ok for those other two airline’s employees to be paid less, if that is in fact the case? If it is ok, then do you think it is ok for employees under a different contract to be paid outside the levels set in NZ employment law? I don’t. If it’s not ok,, then fine, we’re agreeing – it’s not ok. Good.
As said, I’d be more concerned by the situation with Chinese employees. This is because if I had to set a benchmark at which I would call for government intervention into the company’s (and a call for Nationalisation if it would solve the problem), I would set it at the levels that are defined by New Zealand employment law. Does that benchmark make sense to you? I accept your comment about principles – but i wouldn’t call for Nationalisation of a private company if it mistreated a worker, as there may be better mechanisms to deal with the situation. Bit of perspective helps.
The other AirNZ/Mt Cook Air matters can be dealt with internally – there are Unions ann employment law to deal with these issues. If that is not working, then perhaps those laws need to be assessed, but it is a different issue, assuming their contracts are legal under NZ employment law…
I was interested to see comments in the MSM about the relative pay differences between Chinese and NZ workers. I have a friend who works for ZEAL 320 Ltd as a Flight Attendant, a fully owned subsidiary of Air NZ (these are the former Freedom Flight Attendants). These guys and girls wear the same uniform, fly the same size aircraft and serve Air NZ passengers. However they are paid substantially less, sometimes ten’s of thousands less. Why such a big difference? We are talking about the same job, same country.
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