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ARC threatens to terminate NZ Bus contract

Written By: - Date published: 12:53 pm, October 12th, 2009 - 35 comments
Categories: public transport, workers' rights - Tags: , , ,

ARC chairman Mike Lee has delivered a blunt ultimatum to NZ Bus as its lockout of drivers reaches day five.

“We have had enough. Auckland will not be held to ransom. If you can’t deliver the services that the people of Auckland rely on, then we will have to find someone else who can…

“NZ Bus operates public transport services under contract to the Auckland Regional Transport Authority (ARTA). NZ Bus is currently in breach of those contracts – it is not delivering the services. Like any commercial contract, NZ Bus contracts can be terminated for non-performance.

‘If this dispute is not settled, I will be calling on ARTA to start the process of terminating the existing contracts and finding someone else who will deliver the services that Auckland expects and pays for.

“Terminating NZ Bus contracts would be a drastic step. However, it is clear that the company is not responding to other normal commercial pressure, nor in my view does it take seriously its service obligations to the public.

Great stuff. NZ Bus has treated its workers and the wider public with absolute contempt. Astonishingly, it’s even refused a generous offer by the drivers to work for free so that school buses are able to operate despite the lockout.

It’s becoming increasingly clear that NZ Bus doesn’t give a stuff what the public thinks. All they care about is the bottom line and squeezing as much out of their overworked and underpaid drivers as they can – not to mention leeching off the public purse. Good on Mike Lee for dealing with them in the only language they understand.

35 comments on “ARC threatens to terminate NZ Bus contract”

  1. Lanthanide 1

    NZ Bus’s general manager of operations, Zane Fulljames, said the union offer was a “media stunt” and “designed to be inflammatory”. – talking about the offer to drive school buses for free.

    The funny thing is, he’s completely correct, the problem is by denying the bus drivers to work for free, they’ve turned it into a much bigger fiasco than it needed to be. Now the public is generally behind the bus drivers and NZ Bus is seen as the bad guys who are preventing people’s kids getting to school for no important reason.

  2. Hairy Monster 2

    I can’t help but see this move by Mike Lee as little more than grandstanding, if he was serious he would have actually set a deadline.

    • Mr Lee has given NZ ‘Pus’ 5 days according to Radio NZ National at 2pm. That serious enought for you hirsute one?

      Negotiations can often involve ‘wriggle’ room and methods for face saving if required to assist one of the parties to settle up.

  3. toad 3

    More like NZ Pus from the sound of it.

  4. Zaphod Beeblebrox 4

    This could be the Super City’s first task. They would easily have the resources to take over the rail, train, ferry network and deliver a properly integrated system. After all harmonisation of functions is the main reason why it is being created.

    I’d also be in favour aligning all land use and transport planning (after all you can’t divorce one from the other), so that they could subsume Transit’s role of the motorway system and have access to the billions being thrown at motorways.

    Then we could have a vote on how to spend the money.

    I know aligning all the land use decisions in the hands of one democratically elected local government is an outrageous idea for Nzers but it has been done before.

    • Michael Over Here 4.1

      This! If we’re going to have a Supercity can we at least have a functioning, healthy public transport system like Portland, Oregon, US or San Francisco? Please please please?

  5. toad 5

    I work in Mt Eden. Tomorrow I have to get to Takapuna for work. Here’s how it looks like I can do it:

    Depart my office 8.40am for Mt Eden train station to catch train to Britomart – arrive Britomart 9.03am.

    Depart on Ferry Building 9.09am on ferry to Devonport – arrive Devonport 9.32am.

    Depart Devonport 10.14am on Ritchies Bus – arrive Takapuna 10.42am.

    Thanks a lot, NZ Pus!

    [Despite my commitment to public transport, I think I’ll catch a cab.]

  6. rolla_fxgt 6

    Its fair enough Mike Lee threatening NZ Bus with contract cancellation for non performance ( i wish more local bodies would do it to be honest), but how would this help the workers any?
    Presumably they all would be out of a job (as their contracts would have a clause in them stating that cancellation of the contract would cause loss of jobs), and then they’d have to sign up for the dole or find another job, not exactly going to make any of the workers feel good is it?

    If the contract is cancelled for non performance, there’s the risk that NZ Bus could take ARTA to court to argue the cancellation is a breach of contract. Surely the contract would have a clause stating non performance due to industrial action can’t be considered non performance.

    Also the contract will have to be re-tendered which will take a few weeks, so no buses for that period either. If the tender process is to be fair then, Mike Lee will have to sit out the decision making process, and allow NZ Bus to re-tender for it, and there’s always the chance they could win it again, at a higher price even, which they then could use to pay the workers their demands, but would also raise the ticket prices for the buses.

    I don’t have a view one way or the other on who is right or wrong on the NZ bus action, but it seems a case of where there will be no winners out of it. Well except lawyers.

    • IrishBill 6.1

      There’s a shortage of drivers. Any new contractor would need to employ these workers. I can’t imagine any new employer being worse than NZ Bus.

    • Surely the contract would have a clause stating non performance due to industrial action can’t be considered non performance.

      The non-performance is not due to “industrial action”. This isn’t a strike, it’s a lockout.

      • snoozer 6.2.1

        A lock out is industrial action, Graeme.

        What did you think it was?

        • Graeme Edgeler 6.2.1.1

          That was obviously not my point. This is not some circumstance being forced on the company.

          • toad 6.2.1.1.1

            Indeed, Graeme. NZ Pus have themselves, independently of any outside influence, taken the action that results in the services not operating. All the drivers have done is give notice that they will not undertake any work that they are not required to undertake by their empoyment agreement.

            I would agree that NZ Pus is on very shakey ground in terms of their contract with ARTA.

  7. George D 7

    Good on Mike Lee. Jesson would be proud.

  8. deWithiel 8

    The depressing thing is that while trying to bash down the NZ Pus bus drivers, another branch of Infratil is having a tantrum because the ARTA doesn’t want to use its Snapper ticketing system (and given its behaviour with the bus drivers one can see why). Nonetheless, I have an awful suspicion that Steven Joyce has fixed the outcome of the NZTA review of the Auckland integrated ticketing proposal to favour Infratil just as he’s currently reviewing the Public Transport Management Act so that Infratil can just go ahead and do what it likes to ensure that its shareholders get their 20% return on their capital.

  9. Brickley Paiste 9

    @ Graeme:

    “The non-performance is not due to “industrial action’. This isn’t a strike, it’s a lockout.”

    A lockout is industrial action, just like a strike. Check out section Part 8 of the Employment Relations Act 2000.

    Non-performance of a commercial contract is a serious problem when it comes to strikes and lockouts. The Court of Appeal’s recent EPMU v Air Nelson decision attests to that. Aucklanders need salmon.

    The lockout is legal. The work to rule threat might have been a strike as well.

    What’s on the table? What are the issues in negotiation? Who knows. The media can only report: No bus = delays, no bus = delays. Rince, lather, repeat. Please leave message after beep.

    I think the timing of the next negotiation is a big issue but I don’t know.

    • Of course a lockout is a form of industrial action. As you are no doubt aware, that was not my point.

      A clause in a contract which allows someone to avoid responsibility for no-performance is likely to be directed at circumstances as least nominally beyond the control of the parties. Thus, if a strike caused delays, NZ Bus might be able to argue “no, it’s not our fault, it’s the union”; similarly, if the “work to rule” notice caused delays, or late or missed buses, NZ Bus could again blame the union.

      A lockout is very different – it’s not some circumstance beyond the control of the company.

      The cost to workers of a lockout is that they don’t get paid, but the company suffers too. If the ARTA has entered into a contract that gives a bus company to power to choose not to follow their obligations to provide bus services then Auckland ratepayers should be asking a bunch of questions.

  10. Cameron 10

    @Toad- You don’t need to catch the ferry to Devonport. Catch the Northern Express (A Richies bus) from Britomart and get off at Akoranga Station. You can walk up to Takapuna from there.

  11. Red Rosa 11

    Last time I looked, Calamity Kate Wilkinson had some responsibility for NZ labour relations.

    Fresh from the Folic Fiasco, she may be able to explain the finer points of all this for us.

    Should make an interesting Q + A.

  12. Draco T Bastard 12

    Brian Rudman on NZ Bus and the lockout.

  13. jcuknz 13

    It should not be possible for either the union or bus company to denign service to the public of Auckland. It is an essential public service. Therefore it should be automatic that any dispute goes to binding arbitration where the best arguments win the decision.

    I would suggest that the lock-out should not be a defense for the bus company becuase they innitiated it. I hope for the public’s sake that Mike Lee can do something to knock heads together, get the buses running damm quick, and remove the chance of this stupid carry-on being repeated.

    • Swampy 13.1

      Essential public services don’t allow strikes.

      • Daveo 13.1.1

        God you’re a misinformed idiot Swampy.

        Workers in essential services have the right to strike, but they have to give 14 days’ notice. The only exceptions I’m aware of are the police, and obviously the military.

      • BLiP 13.1.2

        It wasn’t a strike – it was a work to rule. What company wouldn’t want it staff to work according to its own rule?

  14. If only process is to be fair, Mike Lee will have to sit out the decision making process, and allow NZ Bus to re-tender for it, and there’s always the chance they could win it the second time, at a higher price even, which they then could use to pay the workers their demands, but would also raise the ticket prices for the buses.

    • Herodotus 14.1

      Not necessary. The increase in the subsidy could be hidden away within the ARC rates. Only a neg increase in rates would be required to cover this!!
      Or that their profits could be reduced to cover the increase in wages resulting in a reduction in taxes, but this could be partially compensated by the potential to reduce other benefits such as WFF.

  15. Brickley Paiste 15

    @ Graeme:

    Sorry, that seemed to be the entirety of your point.

    The situation you’re talking about is akin to frustration or a force majeure — excusing performance due to an unforeseen supervening event. That’s fine if it’s spelled out in the contract or by operation of law.

    That’s all fine and I agree with you.

    However, the only problem is that a lockout, like a strike, is a legitimate (and legal) action for a company to take.

    From what I’ve read, the legality of the lockout has not been challenged. Presumably, it relates to bargaining and satisfies the requirements of lockouts in an essential service.

    So, I would like to see the termination clause in the contract between ARTA and NZ Bus.

    Were it an illegal lockout then there would be no question: terminate at will, Mr Lee.

    However, it isn’t clear what the clause says.

    I don’t like the way NZ Bus is behaving but so far no one is saying what they’re doing is illegal.

  16. Swampy 16

    Lee is obviously opening his mayoral campaign with such blatantly political comments targeted at a parochial left wing audience.

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