wage inflation

After calling for employers to exercise moderation in giving wage and salary increases, the Reserve Bank's wage bill has grown by 18% in the last year. The Herald points out that the rise

takes into account a rise in staff numbers to 223 full-time equivalents from 218 in 2004/5, it still represents a 15.4 per cent average rise in remuneration per employee to $96,860 from $83,944.

Which, compared to the NZ Income Survey is well above the 4% pay rise given to the average worker this year. In real terms, the average wage is only just keeping in line with inflation, the CPI for the year to June 06 was 4%.

That the RBNZ isn't keeping inflating between 1-3% - missing it's targets - clearly doesn't have any relation to how the reward their staff. It demonstrates that workers at the top end of the wage spectrum are treated spectacularly differently from those at the bottom. As the RBNZ forks out 15% extra for their staff without blinking, those wanting just over half that are punished for daring to suggest it.

Interesting to note also, from the Income Survey that while females still lag behind their men on average incomes ($473 for women vs $754 for men av p/w), they are closing the gap faster than they have for many years (up 7.1% for women vs 2.1% for men). Let's hope it's even closer next year.

exclusive nonsesnse

What I don't get about the the Exclusive Brethren's exemption to labour laws is this:

If you run a business in New Zealand, it's safe to assume that you're going to have contact with people who you disagree with politically and religiously. Some of your employees and contractors will hold different beliefs, the employees of your suppliers are bound to be of different faiths - especially if you source raw materials offshore (i.e. China) - AND they're going to change as people leave. Customers in particular - regardless of whether you are a wholesaler or retailer - are going to be varied to a very strong degree.

So it's fine for the Church to insist that it's members not associate with outsiders, that they lobby (to outsiders) for laws allow for them to be treated above the law, but if they need to make money, all that doesn't matter. Preventing your followers from accessing modern civilisation while engaging in capitalist behaviour for the benefit of the Church is on par with with the plight of North Korea's citizens and the indulgences of Kim Jong-il.

I don't believe that the EB's pleas to get Union officials off their workplaces is about remaining separated from others. Sue Bradford quoted someone from the EB in her speech in favour of the law (Hat tip: RB):

Separation is maintained from all groups, unions or associations of a business, shareholding, property, political, pleasure, social, medical, or superannuational (sic) nature. We have found in Jesus a satisfaction nothing in this passing world can compare with. Additionally, we are also governed by the scriptures as to employing or being employed. There is special concern to maintain inviolate the direct employer to employee relationship.

Which is to say: our employee's aren't allowed to join unions, which of course would be illegal even for the EB. But for employees of small and medium businesses, it's extremely difficult to join a union. Mostly because unions don't have the resource to bargain collective agreements for a handfull of employees - compare Progressive stores (one company, unions are involved) to Foodstuffs stores (many owner operated companies, little union involvement) .

The EB isn't an organisation that has the betterment of it's members at it's core (see RB again), it's an organisation devoted to power, money and control of it's members. They're not in the politics game to protect their right to practice their religion. They're in it to advance their cult.

Section 24 of the ERA needs to be repealed - not becuase Labour wants to hit back at the EB - but because no group should be exempt from the law because of their beleifs.

battle wages on for distribution workers

It's been 11 days since industrial action between Progressive Enterprises their distribution workers started. 11 days without pay, 11 days with no end in sight.

And people are starting to notice their supermarket shelves are starting to empty, which is seeming to be a justifiable hassle rather than massive disruption. For now. It's likely that shoppers tensions will become higher as it becomes impossible to shop at Progs stores. Who shoppers blame in the long run will make or break the worker's demands for a national collective agreement, increased entitlements and an 8% pay rise.

Progressive for it's part is trying to focus attention on what it desribes as

unreasonable union demands [and remaining] committed to the lowest prices possible

in posters throughout the store. The NDU claims that Progs is leading a war of misinformation and acting illegally by replacing the function of their members by getting suppliers that usually deliver their goods via the DC to deliver direct into store. The union received a setback this afternoon, with Employment Court Judge Colgan ruling that PEL can continue with direct to store deliveries until a hearing next week. A press release from the worker's unions the NDU and EMPU this afternoon said:

"The judgment confirms the basic principle of the section that people can not be engaged to do the work of the locked out workers," [NDU National Secretary Laila Harre] said. "The Judge has acknowledged that evidence establishing who engaged who would be difficult for unions to gather in these circumstances. However he commented that with documentary disclosure before the trial the facts will be able to be established with a greater degree of certainty... This employer does not want to negotiate a solution, it wants to win. It wants to win by forcing these workers to accept its demands through the brutal economic weapon of the lockout. The company's Australasian owners are powerful and have shown that they are prepared to invest heavily to get their way. It's time for the rest of us to show that we support the right of low paid workers to bargain and we can do that by making sure their rent is paid and their families are fed."

The union will launch an 0900 number "0900 LOCK OUT" (0900 5625 688) tomorrow morning to enable members of the public to make donations.

It looks like both the union movement is digging it's heels in too. Tony Milne has claim's that Progressive is offering 3%, and a reduction in entitlements, which (as he points out) isn't really a pay rise at all. Worse still, the Manawatu Standard has report's of non union workers being offered a pay raise, while Progressive Enterprises Managing Director claiming on Checkpoint that at least 30 union members have quit the NDU and returned to work on individual contracts, with Harre disputing the figure - only 20 workers crossed the picket line in Palmerston North, returning to work because of financial hardship.

This report cites a Prog's insider in saying that sales were only down 5%, and stock levels down 6%. So I guess there's still plenty of stuff you don't want to buy there.

No Right Turn has ways to punish Prog's, and help the union workers (possibly made redundant by the 0900 number above)

Speaking of misinformation, just to make the whole thing even more confusing the New Zealand Herald is trying it's best to get things wrong. Today:

Foodstuffs managing director Tony McNeil said there had been a slight increase in custom at the group's supermarkets, which include New World and Foodtown.

and yesterday:

A shortage of Coca-Cola and other soft drinks

Even though Coca-Cola has always delivered their soft drinks directly into store. That one ain't the fault of the locked out workers.

company blames underpaid workforce for large profit

The sight today at the local Foodtown was one of hundreds of white tickets peppering the aisles reading,

We're sorry your favourite product is out of stock.

Why? According to the full page ad taken by Progressive Enterprises Ltd in today's Herald,

PEL is suspending grocery distribution centre operations indefinitely to ensure the continued supply of grocery products to customers of Foodtown, Woolworths and Countdown supermarkets ... Industrial action at our distribution center's prevents us from supplying our stores with grocery goods via these center's.

Progressive claims that the Union demand for a single agreement for the distribution centre (DC) workers across the Christchurch, Palmerston North and Auckland DC's and an 8% pay rise will bring the multi-billion company to its knees. 500 employees want to be paid the same rate for the same job. 500 out of 18000 NZ employees will make or break this country's food supply.

Progressive's PR offensive continues to say

PEL is seeking urgent mediation to find a fast resolution and to ensure the union demands for less than three per cent of our staff don't threaten the job security of our entire18,000-plus workforce. We are always prepared to negotiate but not until striking staff return to work.

Which is a bit disingenuous. Urgent mediation and negotiation are usually things that happen immediately before strike action is called, not after. Certainly not after suspending staff for taking industrial action, locking out staff, demanding they return to work without changes to their employment conditions.

The union, the National Distribution Workers Union, responded to the newspaper ad with the following:

Progressive rehired the redundant workers on the lower pay (up to $3 less) and conditions (i.e. ending almost all allowances) of the Progressive Shands Rd Supply Chain and ended the Woolworths National Collective Agreement. Workers at Palmerston North retained the pay and allowances of the original national agreement as the company could not find another location for a new distribution centre and therefore could not legally rehire workers on lower
rates.

All this amongst a fantastic corporate (PDF) result for both PEL and its Australian owner Woolworths Australia Limited. The New Zealand operations reported $2.93 billion sales, reported EBIT of $122 million, sales increase of 3.5% in Q3 and 3.8% in Q4. Food inflation was significantly less at 1.5-2%.

The striking workers aren't getting paid at the moment. Donations can be made to the National Distribution Union at the BNZ account 02-0200-0217968-00 with the reference "Lock Out" to give them a hand.

Kiwi Herald also reports on the issue.

out of food

Foodtown Mt Eden had quite bare shelves when I popped in yesterday evening. My immediate thoughts were of slack management, or a high number of sickies. Unfortunately I was wrong.

Progressive Enterprises, the people who bring grocery items to half the country through the Foodtown, Countdown and Woolworth's brands, have locked out their striking distribution workers . Mt Eden store is particularly noticeable, because of it's small storeroom, it requires multiple deliveries of dry goods every day. Other supermarket's will be feeling the pinch soon, as groceries continue to sell and DC's fail to keep up with demand with their union workforce unable to return to work.

The dispute itself is over national pay rates - the union contesting that workers throughout the country should be paid the same for the same job. Prog's, presumably, pays their non-Auckland workers less, because the market pay is less. Working in Auckland is more expensive for two reasons:
- Cost of travel, further to go in most cases.
- Progressive Enterprises prices by region, essentially making Central Auckland the most expensive place to buy groceries in the country.

But that doesn't mean that Palmerston North worker's don't have to travel or buy food.

[Update: I presumed wrong, see next post]

Whatever the result, in the meantime, expect empty supermarket shelves and a PR disaster for Progs.

buy nz made - before it's all gone

I had a chance to speak to a local manufacturer today who sells into both Australian and New Zealand supermarket chains. His experience of late has confirmed what many had fared about the buyout of Progressive Enterprises by Woolworths Australia - that NZ based suppliers are fucked. In an environment where the price grocery retailers pay for their goods have remained relatively static, suppliers here are now forced to match terms with Australian products or lose access to supermarket shelves. In theory, there's opportunity for NZ suppliers to gain access to Australia, but the reality is that the margins they get from NZ supermarkets is low, and a lack of cashflow for the smaller suppliers to invest in equipment to be able to ramp their output serving four million people to output serving six times that number makes quick expansion impossible. The same lack of liquidity prevents manufacturers from acquiring horizontally - meaning business that are in trouble simply disappear, rather than being bought by another NZ operation.

All the while, the Woolworth's Australia has made a very nice profit, reporting in the latest half year that
- EBIT was up by 31.5% to $A902.4 million.
- Supermarket (Oz&NZ) sales up $A2.4 billion to $A16 billion.
- NZ Supermarket sales up 4.3%
- Food inflation was 1.5-2%

The cost of doing business was also down (read: squeezing suppliers), with

80% of these cost savings were reinvested in gross margin with the balance going to increase EBIT margin.

(PDF here)

So we - the consumer - is left with little choice in what we buy, even if we are swayed by the Green's Buy NZ Made Campaign. It's starting already - you may have noticed your favorite Basics product replaced with the Oz made home brand. Little wonder we're flocking to Australia, pretty soon we'll be left without any food.

employment relations

In the last few days there has been a solid push against current employment law from the right. The Herald Wednesday lead with a Tauranga employer feeling aggrieved at a Employment Relations Authority decision against him, alongside a Employers & Manufactures Association (EMA) survey reporting that employment grievances are on the rise. The article gave Nat MP Wayne Mapp a chance to plug his 90-day worker probation bill (currently before Parliament), endorsed by the EMA in it's press release

The figures add solid support for the type of probationary period of employment currently before Parliament.

$2400 is a lot of money to have to shell out, especially considering the sacked worker Daniel Paterson wasn't a very good employee. But, he wasn't fired for anything the Herald implied with the headline

$2400 worker's payout for filthy graffiti.

He was fired for being late. Specifically, he was fired for being late once. Paterson was probably tardy more than that, but his boss Bruce Debenham didn't give Paterson adequate notice that he was close to being dismissed. On Thursday, he admitted that he did things badly in the Herald.

Further whining from the EMA here, claiming Labour's 2004 employment law amendment is unfair because New Zealand has more than one Judge deciding on employment matters. Sorry? That logic wouldn't get far in a murder case. This case involved a Air New Zealand Employee who was given warnings in 2002 and 2003, once for a fracas with another staff member, another time for getting snotty with customers (details of which Air NZ was unable to provide). Then she was given a promotion. Then she was fired 14 months after her last warning (PDF, page 61). The Employment Relations Authority(ERA) decision was appealed to the Employment Court by Air New Zealand The reason the EMA was upset was because presiding Judge Coral Shaw reaffirmed the ERA's assertion that Air New Zealand's actions were

not what a fair and reasonable employer would have done in the circumstances

I don't think it's too much to expect that of employers, and if the opposite - unfair and unreasonable - was to be committed to policy, it'd be laughed down.

There are some truly shocking workers out there, and most of them get moved on quickly by savvy employers. It's not hard to get rid of a truly bad employee, provided you put everything down on paper. Five sheets of paper to print out a customised employment agreement from the Dept of Labour, and another six to warn and fire the employee. Total cost 10 cents, if you're using the posh stuff.

That, and being fair.