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Trade unions set to spoil New Zealand retailers’ Christmas?

An industrial relations expert is warning the New Zealand retail sector – already wrestling with a softening economy – that this Christmas season may be more stressful than profitable as an increasingly bullish trade union movement flexes its muscles.

Negotiation expert at Adelhelm & Associates, Anna Holmes, said recent industrial action at Cotton On, SKYCITY, Tip Top bakeries and bus drivers is a taste of what’s to come, particularly in the run-in towards Christmas because unions know that’s when retailers and hospitality organisations are often most vulnerable.

“Consumers have less disposable income and are less confident due to fuel taxes, higher insurance costs and declining house prices in centres like Auckland. This puts pressure on retailers, and, in light of bullish union activity, they find themselves between a rock and a hard place.

“I believe that the unions will ramp up their action towards Christmas because they know that retailers really need the Christmas sales and so won't want to do anything that impacts sales as a result of poor public perception.

“It couldn’t come at a worse time because retailers are struggling and the market is softening, which puts them between two opposing forces – they have to cut costs and keep wage increases to a minimum, but the unions won’t want a bar of that,” Holmes said.

She said that the unions will flex their muscles, but a slowdown is not something that can be resisted.

“Expect fireworks before the unions have to accept reality. The problem is the industrial action will likely disrupt retailers’ business over Christmas. It’s a sector that is very sensitive to public perception because they know that industrial action will steer foot traffic away.”

Holmes said that employers who want to avoid a messy Christmas should sit down now with the unions – instead of deferring talks for as long as possible – and share the hard facts about the challenges facing the retail sector.

“Do your homework. Prepare your strategy and gather the data. Make sure you only use experienced negotiators because anything less will create problems in the current climate.

“Whatever you do, don’t fob the unions off. Don’t duck and dive and stall, because it will only end in pain,” she said.

She offers the following tips to employers facing the prospect of industrial action over Christmas:

1. Gather factual, reliable information on current wages and benefits in New Zealand to support your case.
2. Understand the agenda of the people with whom you are negotiating.
3. Do a very clear risk analysis and timing of interventions.

“Work out the likely reactions ahead of time. If you go in hard and tell the union you can’t afford a wage increase, then make sure you understand what kind of impact strike action will have on your business.

“Alternatively, if you can take a cautious approach and try to get the other party to understand your rationale you may be able to work through the issues together.”

Holmes said that in the current climate she expects most negotiations will require more than two or three meetings and employers should be prepared to be patient.

“It’s not uncommon for employers to take a hard-line after two or three meetings. My advice is be patient. The moment you take a hard-line you ruffle feathers and it becomes emotional and nobody wins.

She said it is useful for management to conduct a risk analysis of the cost of fighting with the union versus working with the union - the results may surprise them.

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