Industrial agreements should reflect modern work practice

In spite of the enormous improvements from the bad old days, starting with the Employment Contracts Act’s (ECA) introduction in the early 1990s, there remain anomalies in the meat industry’s agreements which hinder the achievement of greater efficiency. The main challenges for meat processors stem from the combined impact of traditional worker agreements, employment law, processing complexity and reduced livestock volumes on an increasingly seasonal industry.

For the largest and oldest meat processors, their work place contracts are governed by the concept of the core collective agreements originally established in the 1960s and progressively modified over time with individual site appendices within a multi plant agreement. The biggest change occurred with the advent of the ECA which abolished compulsory unionism, so for the first time employers were able to have non unionised plants.

Under the Employment Relations Act 2000 (ERA) and its amendments, most meat companies have reverted to full union representation. Industrial relations across the industry have remained much more constructive than before the ECA came into effect, although the provisions of the ERA have made it harder than it was to achieve significant changes to terms and conditions.

The laws around holiday and sick pay, paid breaks and parental leave are particularly inflexible and the industry has not been able to convince successive governments or select committees these should be changed to reflect the seasonal nature of work and the fact they were originally included in the piece rates. So in effect they are now paid twice. According to Grant Cuff, CEO of Alliance, the meat industry is a highly seasonal industry which is too complex for the people drafting changes to employment law who don’t take issues arising from seasonality into account.

Another concern which the companies have to work round with staff is seniority, introduced in 1968, which guarantees jobs for the oldest workers who take precedence over younger and fitter employees, thereby blocking their access to jobs. Subsequent law changes, such as that prohibiting mandatory retirement, have reinforced the inflexibility of employment conditions like seniority.

Union agreements vary both between and within companies, even where the same union branch covers two companies with different agreements. For instance AFFCO’s Wairoa plant has an agreement which specifies 7 ½ hours at normal time rates, competing with another plant in the area which has negotiated 9 ½ hours. In addition Wairoa’s lamb chain processes 3.2 lambs per minute, when it was designed and installed to process 4 per minute, compared with another plant in the group running at 5. If the day’s tally is achieved early, but there are more lambs available, either the workforce goes home or agrees to process at time and a half. It’s pretty obvious why the processing season at Wairoa is shorter than at any other AFFCO plant – it’s got nothing to do with stock availability and everything to do with processing costs and productivity.

Typically a site agreement specifies staffing levels per shift, which was fine when processing specifications were largely similar, but may not work today with so many different grades and cuts. When this situation is combined with a difficult relationship with the local union branch, it has a detrimental effect on the company’s view of a particular plant’s processing capability. My impression from discussion with different meat companies suggests they generally have a good relationship with their workers and the union representatives, meaning they can where necessary vary plant agreements to suit individual requirements.

The newer, single site companies, Taylor Preston, Wallace, Greenlea and Ovation, appear to have more flexible agreements unconstrained by the history of core collective agreements and, of the large companies, AFFCO under Talley’s direction is the most determined to challenge the status quo and test the boundaries. Their belief is by improving plant productivity, they will be able to provide longer employment periods and better pay and conditions. Ultimately unless the industry is able to negotiate greater efficiency and productivity, there is a danger New Zealand meat could be freighted to a low wage country, further processed in bond and transferred to the export destination without leaving New Zealand, until it is cleared through customs on the other side of the world. This is what already happens with Norwegian salmon. At that point the meat industry would be no different from the forestry sector exporting logs for further processing.

Industrial relations has always been a crucial factor in the meat industry, but with lower stock numbers and complex further processing to meet consumer demands, unions must be ready to see a broader picture than simple wage rates and tallies. Their performance on behalf of their members is critical to long term job retention. Governments must also ensure employment legislation accurately reflects particular industry issues. Both are an integral part of a viable meat sector strategy.

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5 Responses to “Industrial agreements should reflect modern work practice”

  1. Graham Cooke Says:

    Allan – why don’t you discuss this issue with those that represent 23,000 NZ meat industry employees, then write a BALANCED ARTICLE? Meat workers require some certainty in employment, otherwise they will seek better employment in other industries. Why shouldn’t they have some certainty? To be able to buy a house in rural NZ (where Meat Plants are built) a bank is looking for a person who can give some committment to repay the loan not a worker who this season is “younger and fitter” and next season is a “has been”. Meat Employers in NZ make it clear they don’t like the quality of prospective workers, they would prefer to employ immigrants (recent application to DOL) and AFFCO is trying to make the the life of a meat worker even more uncertain. Allan how about some balance in your reporting!!!

    • Allan Barber Says:

      Graham
      On re-reading my column, I see nothing unbalanced in what I wrote. For example I wrote that industrial relations were much better than before the introduction of the ECA and that companies generally had good constructive relations with the union. However I used the example of Wairoa as an illustration of where this had broken down to the detriment of both the company and workforce.

      My statement about the need for improved productivity, if long term off shore further processing is to be avoided, was a statement of fact about a potential threat, while my conclusion that both unions and government need to take a more flexible view of terms and conditions was clearly my personal opinion. I’m not sure that speaking to you about the issue would have enabled us to reach common ground, as I suspect that you and I would have agreed to disagree.

      Regards
      Allan

  2. Anibal Wise Says:

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  3. Graham Cooke Says:

    Plant productivity can be achieved by consultation, negotiation, reaching agreement and ratification by members of that agreement. Not by Union Busting tactics that we see on TV in the US…..in NZ we should take pride in the fact that we are an educated and modern society that cares for its people.
    Seniority is about “fairness”. Seniority is “Last on, First off”. Seniority gives employees protection on re-employment and at lay off. If seniority is removed from agreements as suggested by Affco and Allan Barber then we return our employees to the “Dinosaur” days.
    Seniority was written into the National Award in 1968 because employees nationally could no longer trust employers to do the “right thing by them”.
    Employment in the meat industry had become corrupt.
    Some “supervisors” had abused their powers on rehiring & firing – such as a
    • A supervisor being paid $100 under the table to keep one worker employed ahead of others that had been working at the plant for more seasons or
    • A supervisor selected his workers just because you played at the local rugby club rather than the club down the road, or
    • A supervisor employed his family ahead of other families. That supervisor leaves and is replaced by a new supervisor who then replaces the other family with his own.
    Why would a company lay off long serving employees ahead of new starters that have yet to develop a track history of attendance, loyalty and trustworthiness in their first season?
    When the next group of new starters are employed there is absolutely no reason why they can’t jump to the front of this current group of starters. Finally no person will know at the start of each season or conclusion if they have a job or not, unless they are prepared to crawl over broken glass.
    Seniority – is the principal “Last on, First off”.
    Seniority is used in
    1. Plant seniority
    2. Departmental seniority
    3. Job seniority
    Applies to….
    1. Restart at the beginning of the season
    2. Long established “custom & practice” departmental job classifications
    3. Redundancy
    4. Lay off at the end of the season
    Seniority – gives those that have served the company loyally, reliably, demonstrated their trustworthiness and an acceptable attendance performance the ability to progress from a labourers position (low paid) to a Slaughterer persons position (high paid) or a Boners (Beef/Lamb) position (high paid).
    Kind Regards
    Graham Cooke

  4. Rural round-up « Homepaddock Says:

    […] Industrial agreements should reflect modern work practice – Allan Barber at Barber’s Meaty Issues writes: […]

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