Will Sealord jobs go from shore to ship?

On Monday, Sealord and the union representing its Vickerman St fish plant workers get back around the negotiating table in another effort to settle their employment agreement.

JOSH REICH looks at what's happened since the company warned it would have to make cuts of $1.8 million to secure the factory's future.

Well over a year ago – 439 days, to be precise – Sealord, one of Nelson's largest employers, sent shockwaves through the region's already gloomy employment market with the news that it was looking to shed up to 180 jobs at its Vickerman St factory.

The announcement came 10 months after 323 jobs at its Beatty St mussel factory went, with the company saying it could save almost $10 million a year if it shut Vickerman St and moved processing to factory trawlers.

That was not its preferred option, but in the words of chief executive Graham Stuart at the time, the company needed to start seeing a "return on capital" and to make the operation more profitable, something that would require significant changes.

As well as looking to cut 160 processing and 20 salaried positions, to secure the future of Vickerman St (for at least three years) the company wanted to shut down the night shift, replace a fresh fish trawler with a freezer trawler, increase investment in the Argentine fishing industry, sell 270 hectares of mussel farms in the Marlborough Sounds and renegotiate the collective employment agreement with an eye to saving $1.8 million a year.

More than 14 months later, most of that has been achieved.

The night shift has gone, and with it about 130 staff who took voluntary redundancy. The leased factory trawler Independent 1 is at sea (after having missed about 100 days of fishing due to repeated mechanical failure), some of the mussel farms have been sold and the Argentine fishery is profitable.

However, one issue remains unresolved – the collective employment agreement, and Sealord's attempts to trim about $1.8m a year from employees' terms and conditions in order to secure the future of the factory.

Sealord initially attempted to bring forward negotiations from May 2009, when the agreement was due to expire, to March, but was unable to prove to the union that its current operation was creating financial hardship – as required to bring forward negotiations – so decided to wait until it was due to expire.

Negotiations began again in May 2009 but the parties have been unable to come up with anything resembling an agreement.

Mediation has been used, to no avail, and since the turn of the year, there has been little progress.

The parties are getting together again on Monday for negotiations under the "facilitated bargaining" banner.

According to Neville Donaldson, assistant national secretary of the Service and Food Workers' Union, who has been a party to the negotiations throughout, the workers have accepted some of Sealord's changes, but two main sticking points remain.

They have consistently said that they are not prepared to accept provisions that will see new workers employed on less pay and worse conditions than existing staff, and that they will not allow the company to insist on new hours of work or shift patterns with limited notice or consultation.

"It's a small place, Nelson, and in a big factory environment like that, when you talk to people about basically screwing new staff, you're not just talking about faceless human beings – these people know it's their friends and family."

In a bid to seal the deal, at one stage the union took a position of neutrality, allowing the company to present its proposals to staff, with the union not taking an active position. The proposal was rejected by more than 75 per cent of the workers.

Mr Donaldson says that, on average, workers at the factory earn between $30,000 and $35,000 a year.

The amount they would lose is yet to be determined, but to save $1.8m, he says the union has been working with about a $70 a week pay cut in mind, taking overtime into consideration.

Mr Donaldson says the union has constantly asked Sealord to provide the figures that show why the factory is unprofitable, and how cutting terms and conditions would improve things.

"To this day, they have not justified it in any way, shape or form."

He says projections are based on "theoretical business plans", not hard facts.

While unpalatable, the job cuts at Beatty St and others in Dunedin could be justified financially, Mr Donaldson says.

In 28 years in the industry, this is the first time he has known it to take more than 12 months to settle a contract.

Given the length of time, it's not surprising that the company sees matters in a different light.

Mr Stuart says staff at the factory are already employed on different pay and conditions, something that probably happens at every major industrial site in the country, and the company is limited by legislation as to how hours of work are structured.

"We're not seeking to be able to unilaterally impose work hours on union and staff," he says.

"Staff have families, children to pick up from school, drop off to school, and the need to get home and cook meals and things."

Furthermore, he says the company has spent "an inordinate amount of time" going through the finances, with Mr Stuart himself standing in front of a whiteboard explaining things.

Mr Stuart says that in the past 12 months, economic conditions have worsened for fishing companies due to low fish prices, high fuel prices, the exchange rate, and the introduction of the emissions trading scheme later this year.

He says the fact that Sealord has the largest shore-based processing operation of any New Zealand fishing company, and the highest wages (a point Mr Donaldson disputes), means its exposure to those factors has been greater, making the need for change all that more important.

However, Sealord and the union can agree on a couple of factors.

The ongoing negotiations are frustrating for all involved, especially for staff, but the quality of product and the effort of the workers at Vickerman St remains high.

Both also agree that a solution will need to be found shortly.

Mr Donaldson says no-one will be surprised if the factory does end up closing, given what is being offered.

"[Staff] would not be able to make enough in a week to pay their outgoings. Therefore, if the choice was between starvation wages, which is effectively what it would mean, and redundancy and a new life, they'll take the redundancy and a new life."

Last Tuesday, the present collective award agreement for staff expired, meaning new employees can be taken on with different terms and conditions.

Mr Stuart says the company will not being doing that at this stage, but regardless, the option of closing the factory and transferring processing to vessels at sea is still open.

Sealord will just have to continue communicating "the reality" of the situation it sees itself in, he says.

"It's going to get resolved. Everything gets resolved."

- © Fairfax NZ News