Since my post yesterday, Ports of Auckland has upped the ante threatening to sack all its workers and contract out (to quick and loud cheers from the National-aligned blogs they are working with – Cameron Slater’s rate is $10,000 for an operation like this). What they’re proposing is a breach of the law and wouldn’t work, but its just setting the scene for the next stage.
Parties to collective bargaining are required to bargain in good faith. There’s many aspects of this. It requires parties to be “responsive and communicative“, which Ports of Auckland has not been over the Christmas period to the offers the workers have put forward. It requires parties to agree a collective agreement unless “there is a genuine reason based on reasonable grounds not to“. There’s no hard and fast definition of what a “genuine reason” is but examples point to it being a serious obstacle, such as “where a wage claim is at a level outside the employer’s ability to pay and where the employer can provide information to support their inability to meet the claim.”
Ports of Auckland paid a $17.6 million dividend last year, there’s no doubt they can afford to keep the employment conditions that have generated $90 million in dividends over the past 5 years, even with a pay rise that would cost the Port about $1.25 million a year (btw, ‘Key management personnel‘ costs rose by 20% last year, excluding termination costs). So, they’re going to have a tough time pleading poverty as a reason for not concluding an agreement, especially as they haven’t sought mediation or arbitration.
The Port says it will continue to negotiate the collective but will sack all the workers to make the process irrelevant, again, hardly meeting the good faith test.
Now, the Port boss has finally come back from his beach house holiday with a threat to sack his entire workforce. Tony Gibson says the Port will contract out all its work. That is, it will sack its workforce (these, remember are the people about which the Port, in its annual report, says “we respect and care about each other – we show consideration for, and look after each other“) and replace them with contractors. Gibson says he expects that “the majority of affected employees would continue to work for the Port as employees of the selected contractors“. This is just a farce to try to cut the workers’ pay and conditions via the back door (and let some of their mates set up ‘contractor’ companies to clip the ticket on the way through).
Fortunately, the law’s not ass enough to let that go past: when a restructuring, including a contracting out, occurs the law says “An employee may elect to transfer to the new employer” and If an employee elects to transfer to the new employer, then to the extent that the employee’s work is to be performed by the new employer, the employee … is employed on the same terms and conditions by the new employer as applied to the employee immediately before the specified date, including terms and conditions relating to whether the employee is employed full-time or part-time“. If workers were to opt not to work for one of the Port’s contractors, they would be entitled to redundancy payments worth up to $24 million, or more than a year’s profits for the Port. In other words, contracting out isn’t a free pass for the Port to trample all over the workers’ pay and conditions.
So, if it won’t work, and the Port is in breach of the law and possibly subject to serious penalties as a result, then what are they up to?
The next stage, I suspect will be for the Port to plead for the government to get involved, to make it legal for them to sack staff who won’t accept having their wages and conditions gutted and re-employ them (they need those particular workers – they’re skilled) for less cost. There will already be work on behind the scenes on this, I reckon. Key will be getting off his plane from Hawaii in a week or two and declaring that the Employment Relations Act – that piece of law which defines and codifies your rights at work – has to be ripped up so that Ports of Auckland can make a few more dollars.