April 2, 2007
Media Release

Workers ratify Air NZ deal, union pursues inquiry

Engineering, Printing and Manufacturing Union members in Air New Zealand’s ground services have accepted a package to stop their jobs being outsourced but are pursuing a parliamentary inquiry into the airline’s behaviour.

77.8% of workers voted in favour of the settlement which will involve losses for some members and gains for others.

EPMU National Secretary Andrew Little says the deal is the best of a bad situation.

“This was never our deal. Air New Zealand came to us with threats of contracting out and did so in a way that meant members had no bargaining power. We’ve done the best we can in the circumstances and we are now planning to petition the government for an inquiry into the airline’s sharp practice.

“One favourable outcome of this process is that these jobs have been kept in-house, which is better than dealing with a third party, but we’ll also be looking to make sure that this situation can’t happen again.

“Air New Zealand workers and their families have had this threat hanging over their heads for the last six months and today’s decision means they’ve now got a clear idea of what the future holds.”

Around eight hundred Air New Zealand workers have so far signed the petition for an inquiry.

ENDS

Statement to Media Conference 2 April 2007, 2.00pm
Centra Auckland Airport Hotel
Air New Zealand airport services

Today, we announce the result of the ballot of EPMU members at Air New Zealand airport services on the package that will prevent contracting out of their work to the Spanish company, Swissport.

EPMU members have voted to support the package. The vote was 78% in favour.

The Package

The package our members voted on has the following key elements:

- A collective agreement running for 25 months from 1 June 2007 to 30 June 2009

- A new rostering system, known as “flexible fortnight” to allow greater flexibility of labour deployment. The following conditions, amongst others, apply:

- Full-timers guaranteed 80 hours per fortnight
- Part-timers guaranteed up to 60 hours per fortnight
- Shifts will be between 3 hours and 10 hours per day
- No split shifts
- Two consecutive days off each week or work period (applies, for example, when working 6 and 3 pattern)
- No wild swings of start times between days (i.e. no 6.00am start one day followed by 3.00pm start the following day)
- No changes to rosters once published (published for fortnightly period 14 days in advance)

- New pay scales

- Fortnightly pay will comprise hourly pay rate, any overtime (first 10 hours in a fortnight at T1.5; thereafter at T2), shift payments and/or penal payments (e.g. weekend work, public holidays etc)
- Automatic entitlement to redundancy for those who would lose pay (as a result of the new pay scales) or contracted overtime, OR, if elect to stay, payment of $3,000 gross

- $1,000 net payment once agreement is ratified and retention of work in-house is secured

- 3.75% increase on new rates on 1 July 2007; further 3.75% increase on 1 July 2008

- $2,500 gross payment as buy out of transport allowance (applies to 378 people)

- Review of allocation of current roles to new pay bands in next 3 months along with development of mechanisms to move up pay scale.

The Outcome for EPMU Members

The impact of this package on EPMU members will be financially good for some and financially bad for others.

For all airport services staff it will mean certainty that the work will stay in house in Air NZ. In the many meetings we have had with our members as well as in many informal discussions with members individually it is very clear that most wish to continue working for Air NZ. It is the airline they wish to be a part of, not an overseas-owned service provider.

Getting to this point today has been a herculean struggle for the union and its members.

How we got to this point

Throughout 2006 airline management made it clear to the union that it wished to renegotiate parts of the existing collective agreement to get labour cost reductions within the airport services division of Air NZ. Airline management also wanted total control over rostering and labour deployment matters. The union offered a range of measures to improve efficiency, measures which did not entail cutting terms and conditions of employment. The airline rejected those proposals.

On 12 October 2006 the airline tabled a proposal to contract out the airport services business, indicating it had a bid from the Spanish company, Swissport, who said it could do the work for $20m a year cheaper.

The union and the airline went through a formal consultation process, as required under the current Collective Agreement. At the end of November 2006 the union filed a legal challenge in the Employment Court on the grounds the airline was in breach of some parts of the consultation process as well as generally showing a closed mind to the union’s proposals.

Following undertakings to the Court in December 2006 the union and the airline embarked on an intense round of discussions during January 2007. This resulted in a further proposal from the union which was subsequently rejected by the airline.

Court-ordered mediation then took place in early February. No agreement was finalised in this process and the litigation commenced on 14 February 2007. Further discussions took place during the course of the litigation and it also became clear that the court would grant only limited remedies. Eventually, we reached a heads of agreement on 2 March 2007. Between 2 March and 27 March discussions took place on converting the heads of agreement into a collective agreement. The final result was taken out for a vote amongst EPMU members on 28 to 30 March.

The position we’ve been in

The union has been in an impossible situation from the outset. We were faced with a genuine threat to contract out work which would have lead to inferior terms and conditions of employment, along with an offer to negotiate to retain the work in house.

Faced with either losing their jobs or having severe cuts in conditions our members had no right to take industrial action. We made the judgement that we had a responsibility to do the best we could in these difficult circumstances to give our members the best choice available between accepting the proposal to contract out and accepting a proposal to keep the work in house on new, and for some worse, conditions. It would have been an abdication of our responsibility as a union to simply stand aside and to allow a decision to contract out to proceed.

In the end, it was always a matter for our members to decide. But we worked hard to make sure that any choice to keep the work in house was a choice over the best possible package available in these very unpleasant circumstances.

By the time we took the package out to our members for a vote we were satisfied that what was on the table was better than what would have or could have been available had the work been contracted out to Swissport. It is considerably better than what Air NZ originally offered to keep the work in-house.

But the situation raises obvious questions about the operation of “good faith” in our current employment law. And it raises a question about what the Employment Relations Act actually means when it says it seeks to address the inherent inequality of power in employment relationships.

Petition to Parliament

We believe that Air New Zealand’s conduct in relation to its airport services workers and, 15 months ago, in relation to its engineering workers, needs to be investigated by Parliament. To this end, we have commenced a petition to Parliament amongst Air New Zealand employees. We currently have around 800 signatures to the petition from airport services workers and we will shortly be circulating it through other divisions of the airline. We plan to present the petition to Parliament on 17 May as part of an international day of action in support of aviation workers.

Concluding remarks

Our members remain, as they always have been, committed to the best interests of Air New Zealand’s passengers. This is a group of workers that has always gone the extra mile for the airline. Indeed, throughout the last several harrowing and difficult months for them, they have never failed in their commitment and dedication to their job. They are true professionals.

During many of our many meetings with members during the last few months it was not uncommon for them after they had expressed their deep anxiety about what could happen to them to want to quickly bring the meeting to an end so they could get back to serving passengers and aircraft.

Air New Zealand should be proud to have such a dedicated and committed workforce. It is just a pity that in this process these workers have felt devalued and disrespected.

We all look forward to a time when this group of workers can look to a management who they can rely on to treat them with fairness and dignity.

Air New Zealand Airport Services – contracting out

Impact of ballot result

The EPMU understands that the result of the ballot means Air NZ will not now contract out airport services work to Swissport. The work will remain in house, carried out by Air NZ employees.

We understand the following will now happen:

- The new Collective Agreement will take effect in June 2007.

- Between now and June, those employees who are entitled to take redundancy (because they will suffer loss of pay) will make their choice known (if they don’t choose to take their redundancy and instead choose to stay, they will pick up the $3,000 payment)

- A timetable for those electing redundancy will be worked out. For those who go after the introduction of the new (and, for some, lower rates of pay) the value of their current pay rate will be preserved until they leave and their redundancy calculation will be preserved at the highest possible rate

- Recruitment into the new team manager’s roles will start, and the EPMU will commence bargaining for a separate Collective Agreement for people in these roles

- The union and Air NZ will also start the work (expected to take 3 months) on developing the process to move through the new pay scales. This may result in pay increases for some at the end of the exercise.

- The airline will implement new rosters in line with the “flexible fortnight” concept. A roster review committee will meet after 2 or 3 months, and regularly thereafter, to review how the new rosters are working.

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