Talleys immovable in dispute

JON MORGAN
Last updated 05:00 12/05/2012

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After 10 weeks of worker protests, punctuated by fruitless talks and exchanges of lock-out and strike threats, the Affco-meatworkers dispute is no closer to resolution.

The bitterness of the dispute – over pay and conditions for 1000 union workers at eight plants – comes as no surprise to anyone in the meat industry.

The protagonists, the Talley family on one side and the Meatworkers Union on the other, are an irresistible force coming up against an immovable object – or, as one industry source puts it, "a rock hitting a rock".

Both have fearsome reputations, but the union's is on the wane while the Talleys' is on the rise.

The union was once a dominant force on the New Zealand industrial landscape. But since the loss of compulsory membership under the Employment Contracts Act in 1991 its influence has gradually declined.

At Affco plants, and others around the country, union membership is less than half of the workforce.

Apart from what, in comparison with the Affco dispute, have been minor skirmishes in recent years, the union says it has had relatively trouble-free relations with plant owners, including annual negotiations over pay.

But it says that has changed at Affco with the increased shareholding of the Talley family.

In 2001, Motueka-based Talley's Fisheries bought a 10 per cent stake in Affco, increased that to a controlling stake in 2006 and acquired the remainder in 2010.

As Talley's influence increased so did anti-union activity, according to Meatworkers organiser Roger Middlemass. "It was like a cold front arriving."

He accuses Affco of a string of anti-union acts, including encouraging workers not to sign with the union and of banning the union from posting notices, including its financial statements, in plants.

"It is Dickensian," he says. "This is not even last century stuff, it's the century before."

One example, he says, is the inclusion in the disputed contract of a clause that talks of making union members redundant on the grounds of irreconcilable differences between them and the employer, or them and other workers, or when "the interests of the employer would be best served by terminating the union member's employment, not withstanding that the union member has not been guilty of any conduct or omission that would justify dismissal on the grounds of misconduct or poor performance".

"It means that the employer can just say it's in my interest that you don't work for me any more. And you can't take it to court because you've not been dismissed, you've been made redundant," Middlemass says. "The word draconian isn't strong enough to describe this."

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Affco operations manager Rowan Ogg says this clause is "reasonably standard" and that he has it in his employment contract.

He denies the company is anti-union. "Affco is trying very hard to negotiate an agreement – that in itself is a signal we're not anti-union."

The company has offered its 2500 employees a choice between signing a new employment agreement or joining the union collective.

"We provide the two agreements to the employees and advise them to seek independent advice."

He says there is "not a huge difference" in cost to the company between the contracts, with higher wages offered to non-union staff taking account of loss of long-service leave, accumulated sick leave, no access to the meat industry super scheme and no redundancy provision.

"We're simply giving them an option. In the past they haven't had that."

According to industry sources, Talley's is behind the change in Affco's attitude. "It's well-known they don't take any prisoners; they're not negotiative people," a senior manager in another meat company says.

His view is that Talley's acquired Affco relatively cheaply, with the last offer valuing the company at $189 million, well below Affco's stated net assets at the time of $356.9m.

However, Talley's has also contributed heavily to Affco's $117m investment to upgrade plants.

"They're obviously keen to recover some of that with in-plant efficiencies," he says.

Talley's seafood division includes four fish-processing plants serviced by its own trawler fleet and the family has vegetable growing and processing and icecream-making operations.

Through its Affco ownership it also has a 53 per cent stake in milk processor Open Country Dairy. Its workforce is estimated at 7000 to 8000.

Despite being such a big business, little is known about the company's finances, or that of its owners. The Talleys are intensely private and bridle at what they consider intrusions into their privacy.

According to the National Business Review's annual Rich List, the family is worth $300m, but they have twice taken NBR to the Privacy Commissioner, then to the Complaints Review Tribunal, in unsuccessful attempts to get off the list.

Andrew Talley has described the list as "a load of rubbish. It always has been and it always will be".

The family has no time for the news media. Peter Talley said in a speech that the media had a lot to answer for, accusing it of being slanted, one-sided and attempting to be politically correct.

His son, Andrew, explained at an Affco news conference in 2010 the family's aversion for the media was not driven by hatred. "It's just really a plea for privacy."

Requests for an interview for this article were ignored.

Talley's was founded by Yugoslav immigrant Ivan Talijancich, who opened a fish shop in Motueka in 1936 and bought a trawler to supply it. When he died in 1964, sons Peter and Michael took over.

Peter is described by a Nelson businessman as "flamboyant, cheeky, likeable – the politician of the family", while another says he is "ruthless, a hard man". Michael is the "hard-nosed accountant and equally influential" and Andrew is said to embody the characteristics of both.

A fishing industry insider puts the family's success down to the brothers' quick reaction to the introduction of fishing quotas in 1986.

They worked out that the relaxation of rules restricting boat size and days at sea meant they could send out small boats almost daily and dramatically reduce costs and increase profits.

"Before too many others of the new quota-holders could also realise this, they went round and bought up their quota. They got themselves into a heap of debt but that quota very quickly gained in value as the industry caught on.

"They transformed their 3 per cent quota into the 18 to 20 per cent they own today and they paid about a third of what it was really worth. It's hard to say what it would be worth today, but it's in tens, if not hundreds of millions, of dollars."

The industry source stresses the Talleys did not act dishonestly.

"They were just quicker than anyone else."

Sources in the meat, fishing and vegetable industries say the Talleys are known to be tough to deal with, driving hard bargains.

Nelson MP Nick Smith describes them as tough but fair. "They are very patriotic New Zealanders and very loyal to Nelson. If they were driven purely by profit, they would have relocated long ago."

He says they are also generous benefactors to the community, although they have chosen to be private about it. He knows of staff the family has helped out when they have fallen on hard times.

As environment minister, Smith had run-ins with them over environmental matters, but he describes Peter Talley as deliberately provocative.

"He enjoys rarking people up. Why else would he refer to seals as rabbits of the sea?"

But at the same time he was outspoken against foreign-owned trawlers plundering New Zealand waters.

Talley summed up his views on the environment in a speech last year.

"We need a new balanced approach to environmentalism, one that recognises sustainable extraction, and one that recognises a higher ranking of mankind, that should rightfully be placed well above the birds and the bees and the flowers and the trees.

"I, for one, certainly did not fight my way to the top of the food chain to eat vegetables."

Smith says he doesn't agree with the Talleys' environmental views but adds that businesses like theirs are needed.

"We don't have enough of them. If we had another 50 like them, we would be exporting more and earning more as a country. I would much rather have businesses like the Talleys ... than a large number of enterprises that are subsidiaries of international corporates and taking profits out of the country."

TALLEY'S GROUP

Meat: Affco, eight meat plants throughout New Zealand.

Fisheries: Four fish processing plants serviced by its own trawler fleet. Mussel farms, cool storage and freezer trucks.

Vegetables: Mixture of own farms and contracted growers supplying freezing factories at Blenheim and Ashburton.

Dairy: 53 per cent majority owner of milk processor Open Country. Icecream-making factory at Motueka.

Hospitality: Owners of Rutherford Hotel, Nelson.

THE TALLEYS

Brothers Peter and Michael Talley, and Peter's son Andrew, have a wealth estimated at $300 million, according to the NBR Rich List.

Meatworkers' pay ranges from $600 a week to more than $1000 at season peak. Contracts vary from three months to a year.

- BusinessDay.co.nz

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