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Port and Govt support for privatisation of Port of Auckland

13 January 2012

Port and Government support for privatisation of Port of Auckland made clearer

The admission today on radio by Ports of Auckland CEO Tony Gibson that he is not opposed to the privatisation of the Port of Auckland regardless of the views of the Mayor and the people of Auckland, completes the puzzle on the reasons why settlement of the Port agreement was not achieved yesterday, CTU President Helen Kelly said.

“When the Port was clear yesterday that the union position tabled at the negotiations would resolve the issues of labour utilisation and would be “big” in terms of costs savings to the Port but that it did not want a settlement of this dispute, many people would have been left wondering why given the risk to the Council owned asset of an escalation of the dispute.”

“Yesterday the Government commissioned its mates on the Productivity Commission to promote privatisation and casualisation of the workforce and now the Government needs a dispute like this to raise doubts in the public mind about the current model if it is to put through legislation. Today we have heard Tony Gibson’s support for that agenda despite working for a Council elected to retain the Port,” said Helen Kelly.

“With the Council now looking like it will have to fight to retain its ownership of the Port, having the Board and CEO working against it is like having a fox in the chicken coup” Helen Kelly said. “The Government is also wanting to have a go at removing workers rights and the Port are co-operating with that agenda by spreading myths about work practices at the Port and allowing an unnecessary dispute to occur.”

“Workers in New Zealand are already having a hard time getting by week to week. Increased casualisation and removal of security, pressure on them to accept any terms and conditions in the name of business and the scramble by the already wealthy to strip public assets is the theme of this Government. The CTU will be providing all the support it can to the Martime union members and the people of Auckland to retain decent working conditions at the Port and the right to retain ownership of the Port in the hands of the citizens,” Helen Kelly said.

Background information:

In the interests of transparency, the Maritime Union of NZ and the CTU are releasing the details of the offer they put to Ports of Auckland management on 12 January 2012.

As can be seen the offer includes:

1. Significant changes to provide more flexibility in rosters.
2. 12 hour shift option for some workers.
3. Speeding up of changeover times.
4. An ongoing commitment to productivity improvements through a process known as TRACC which has been used successfully in parts of Ports of Auckland and also Fonterra.
5. A small wage increase.
6. A willingness to discuss the term (length of time) of the agreement.
The tabled document today said:

MUNZ bargaining position 12 January 2012

MUNZ wishes to make the following points:

It is our desire to see the Port performing well and returning a fair dividend to the rates payers of Auckland. This has been demonstrated by the co-operation of MUNZ in the TRACC initiative at the Port to date and the excellent performance of engineering where it has been utilised, and by the increase in productivity at the Port over the year in other areas.

It is not our view that there is any “crisis” of performance at the Port and consider it unfortunate and misleading that this impression is being conveyed. The Port is performing as well or better than other Ports in New Zealand and compares well internationally. The fact the contracting “bare bones” collective agreement options now being promoted by the Port have only surfaced in the last few weeks when prior Port offers included no immediate changes to rosters and were instead predicated on a productivity investigation using TRACC, suggests the Port itself was satisfied with the substance of the current collective agreement rostering arrangements at least until the TRACC process identified areas for improvements. It is not tenable for the Port management to now suggest a crisis has occurred resulting in the new position of the management to these negotiations.

While the Council may be demanding a higher return for its investment, it is unclear how much of this can be achieved by changes to the roster system of the workforce and there are a number of underlying challenges that the Port would need to address to meet the Council goal of a 12% return in 5 years. In fact MUNZ believe achieving this off the current asset base with the current profile of shipping to and from NZ is unlikely and is unwilling to let its members be the “fall guy” for this type of unrealistic expectation. Even if wages were significantly reduced at the Port these targets would not be achieved and the issue of return needs a more comprehensive response than simply attacking working conditions.

The Ports own Annual Report notes that the container and bulk cargo volumes were up in the 2010/2011 year despite the economic situation. It brags of the all time best crane rates that were achieved in the year, up 4.1% on the previous best quarter. It notes the continued productivity improvements and raises no challenges to finding more. It is disingenuous to suggest the Port workforce have not played a role in this and cannot play a role going forward.

A recent investigation by the Ministry of Transport into container rate productivity of New Zealand ports said that the rate “appears at least comparable with, and in some cases better than, Australian and other international ports.”

Figures also suggest the returns on equity in relation to other NZ Ports vary, with Auckland out performing ports like Tauranga in 2010 but not in 2011. Given Auckland has higher land values than Tauranga and was impacted by the downturn in imports to a larger extent than Tauranga, the returns are still arguably comparable or better. While Tauranga may have greater labour utilisation rates, this has been at the expense of secure and safe employment and regardless of this, it is not clear it out performs Auckland in any substantial way and in fact under performs in some areas.

In order for this dispute to be settled in a way the preserves a semblance of optimism about the future relationships on the Port, productivity on the Port and the overall success of the Port in the next 2 to 5 years, today is extremely important.

Unless the parties are able to reach a compromise to move them forward and take advantage of cooperative tools such as TRACC to move beyond the rhetoric and continue to improve performance at the Port within a decent work framework then the future of the Port is bleak for all the parties.

If the current trajectory of the dispute continues and MUNZ “win” this dispute, then the chances for a cooperative model of change will be hugely reduced, the workforce is likely to be split because of the disruption “winning” will cause, and workers are likely to have lost income and work opportunities in the process and the Port will have lost considerable opportunity, money and goodwill. If the Port “win” this dispute on its current trajectory then it is likely to end up with an inexperienced and unhappy workforce, little co-operation, poor quality jobs, a reputation amongst international union members as a bad employer and no guarantee of any productivity improvements or industrial peace. The reality is, is that there is not going to be a “winner” unless the direction that this dispute has taken changes course.

MUNZ believes the time to settle is now, on the basis of compromise from both sides with a plan that takes a long term view and continues to build on the success already achieved in terms of productivity over the last couple of years.

In that light it proposes:

Based on the current collective agreement a two pronged approach be agreed:

1. Agreement to make some changes now to the utilisation of labour

2. Agreement to use the TRACC process to further explore the utilisation issues. Supplementary shuttle operations above the two remaining shuttle units can become part of the TRACC methodology.

In terms of the first point. MUNZ wants to hear from the Port regarding its issues with current utilisation and how it sees them being addressed within the principles of the current collective agreement including decent work and a safe workplace. This discussion has not been had and the Port have not engaged in a discussion on how within the current framework it is unable to maximise staff in a safe and sustainable way.

The union on the other hand proposes for discussion:

• The future of the 1,2 roster, 2/3 group and permanent third rostered group be discussed– this covers a group of workers who are only able to be rostered on the first and second shifts with other restrictions. Removing this rostering arrangement would allow more flexibility in the rostering of these staff particularly around weekend work.

• The percentage of AA positions be reviewed. These positions balance security of employment (the guarantee of at least 24 hours work per week) with the flexibility. Allowing for more of these positions will increase even further the flexibility of employment within the agreement. These workers to get priority before casual workers to extra shifts up to 5 shifts per week.

• Consideration of some 12 hour shift positions. Some workers are interested in a four consecutive days on, four day off roster for shifts of 12 hours. With some workers within a period working 8 hours and some doing 12, run on situations could be covered more easily. Need to design issues regarding long hour driving.

• Arrangements to speed up the change over times during a shift from driver to driver – to be discussed.

• Change overtime provisions to allow overtime after the standard shift subject to 2,4 or 8 hour overtime orders. Orders below 8 hours to be paid at overtime rate with any 8 hour extra shift payable at ordinary time.

Other issues:
Wage increase 2.5%.

Term – to be discussed.

ENDS

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