Allan Barber explains who really won in the AFFCO labour dispute and how they achieved the settlement

By Allan Barber

It was a hell of a long time coming; the return to work for AFFCO’s workforce, or at least the half who were on strike or locked out, has finally arrived.

95% of the union members ratified the settlement by Monday last week.

That is a substantial majority, although it makes me wonder why the other 5% still wanted to hold out.

Both sides are heralding a good outcome which I suppose is what you would say after a three month dispute has been settled.

But the cost to workforce and employer is significant.

At least AFFCO has achieved most of what it wanted when it initiated the lock out, predominantly the right to manage its own business.

In contrast despite a backdated pay award the workforce will never be able to recover their lost wages which seems such a tragedy when one looks at the key points of difference. The season is already much closer to its end than its beginning when the lock out started.

The dispute could have all been settled months ago with some common sense and a modicum of flexibility.

Common sense asserted itself at last when the Talleys persuaded the Iwi leaders their people were suffering lost work opportunities because of the insistence on preserving outdated employment conditions. AFFCO was able to show the Iwi leaders union agreements with other meat processors which already contained the provisions it sought.

The reaction of the Iwi, notably Tukoroirangi Morgan and Ken Mair, was immediate and totally commercial.

Apart from comments by Pita Sharples early on in the dispute, there was no suggestion Maori Incorporations should remove supply from AFFCO or any other Talley’s company.

In fact it was the existing relationship with Talley’s Group which led to the successful Iwi intervention.

There is now support for the logic of putting more livestock through AFFCO’s plants because this will lengthen seasonal work for the employees.

The threat to remove livestock from AFFCO plants is only one of several misconceptions about this dispute. Another one is the presumption Talley’s is determined to do away with unions in plants in its ownership, but this was never the purpose of the lock out.

The purpose was about gaining control of management of the business and bringing the AFFCO plants onto a comparable cost base to its competitors, enabling it to compete on level terms for stock. It was therefore not designed to convert all employees to IEAs, but to achieve competitive terms in the Core Collective.

The role of Iwi in this dispute cannot be understated. At the time of the settlement Morgan said “The comprehensive agreement ending the ten week lock-out of Horotiu workers is a stunning example of how the growing economic and political power of a determined and united Iwi leadership can produce compromise out of chaos…The job Iwi leaders faced was to get both sides around the table and talking and moving towards compromise and, ultimately, agreement. The truth is that the two parties at the centre of this dispute were locked in a bitter struggle with our people caught in the middle. There was no common ground, mistrust and resentment prevailed."

This last sentence sums up why the parties couldn’t find a way forward, because what they finally agreed does not appear to be too far away from what AFFCO wanted in the first place.

According to Operations Director, Rowan Ogg, the dispute was never about the pay increase which was finally agreed for two years at 2.3% backdated to January plus 2% in the second year.

But other key conditions provide AFFCO with a modern, flexible agreement which is appropriate to today’s environment and ensure the company can compete fully for livestock, thereby providing more work for the workforce.

The seniority clause which imposed a straitjacket on the employer is still included in the new agreement with a significant variation which already exists in other contracts: seniority applies if all other factors are equal which provides a reasonable opportunity to deviate from the previously unbreakable principle of ‘first in, last out’ or ‘longest server, first on.’

The drug testing clause will now permit the use of the 100% accurate and immediate urine test, instead of the slow and 70% reliable saliva test.

Now AFFCO can begin to rebuild its relationship with its workforce, satisfy its suppliers and meet its customer requirements.

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Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country where he runs a boutique B&B with his wife. You can contact him by email at allan@barberstrategic.co.nz or through his blog at http://allan.barber.wordpress.com.

This piece first appeared in Farmers Weekly. It is used here with permission.