Ports of Auckland puts contracting on hold and lifts lock-out after director resigns

Report from BusinessDesk
Ports of Auckland has lifted its lockout notice, allowing stevedores back to work to alleviate the city’s “severely affected” supply chain after revealing that a rift over strategy in its boardroom had resulted in the resignation of director Rob Campbell.

Chief executive Tony Gibson, who has copped some criticism over his strategy to contract out wharf workers, got the backing of the board for what appears to be a fresh approach, involving returning the unionised workforce to the port as quickly as possible and placing the outsourcing objective “on hold”.

Chairman Richard Pearson, whom unions have accused of being “out of control” in the long-running saga, said the board was “fully supportive” of the approach announced today, just under two hours after a statement announcing Campbell’s departure.

Maritime Union members will return to work no later than Good Friday, April 6, and continue to be paid in the interim. The port is also going back into talks with the union to try to get the “changes we need through a new collective.”

The port appears to have bowed to pressure from its owners also, saying in today’s statement that is “has listened to the wishes of the court, as well as the views of the mayor and all other stakeholders.”

Gibson said the company “was going back to the bargaining table with a fresh determination to talk to MUNZ and get the collective the port needs to operate efficiently.”

But Gibson signalled the move was only a temporary reprieve for workers because the port is still determined to overhaul “historic work practices and restrictions” that have undermined Ports of Auckland’s competitiveness.

The contracting proposal “is still there, but for now it is on hold,” he said.

Chairman Pearson accepted Campbell’s resignation, saying the decision came from “differences in views on board strategies.” The board declined further comment and Campbell didn’t immediately return calls.

The port’s shareholder Auckland Council Investments Limited (ACIL) will appoint Campbell’s replacement. Auckland Mayor Len Brown wrote to ACIL yesterday setting out the Auckland Council’s expectations of the port owner in the dispute.

Today’s change of tack by the port company comes a day after Employment Court Judge Barry Travis granted an injunction to prevent the port pursuing its desire to contract out the workforce, saying “the overall justice of the case required the defendant (Ports of Auckland) be prevented from exercising its dismissal proposals until its right to be able to do so, in light of the statutory requirements, is dealt with by the substantive hearing.”

That hearing is now set down for May 16, with Auckland Chambers of Commerce head Michael Barnett calling for efforts to bring the date forward because of the escalating cost of the dispute for Auckland businesses.

“With settlement now unlikely until at least late May, the dispute is no longer just about the Port and the Maritime Union. It is becoming an issue affecting the health of many thousands of businesses directly and of the New Zealand economy as a whole,” he said, citing price increases announced this week by affected port customers.

“Between now and mid-May there is a likelihood of further cost and price increases associated with the dispute that will run into many millions of dollars.”

Maritime Union workers had been due to return to work last week after the port’s legal strategy collapsed in the Employment Court, but the port issued a lockout notice immediately afterwards and reasserted its intention to seek competitive stevedoring services.

News release from Ports of Auckland Ltd
This afternoon POAL announced it had cancelled the lockout due to start on 6 April, on the basis that the parties return to the bargaining table, and then use the facilitation process set out in the Employment Relations Act.

Ports of Auckland CEO, Tony Gibson said the company is acutely aware that its customers and all those in the supply chain are severely affected by this dispute and in order to lift pressure on the supply chain, POAL is lifting the lockout to get goods moving.

Mr Gibson said the company hasn’t changed its determination to get a modern and efficient port, “and that is what we will be talking to MUNZ about.”

”POAL has listened to wishes of the Court, as well the views of the Mayor and all other stakeholders.”

“POAL remains focussed on ensuring it is highly competitive and can stem the loss of business that the company has seen over the last decade. That will not happen if we do not change historic work practices and restrictions which are out of touch with today’s reality.”

“Over the last 10 years POAL has lost significant market share, this equates to around $73 million in revenue. If that trend continues over the next 10 years that would equate to a further loss in the order of $260 million.”

“Paying on average 40 hours for 26 hours worked costs POAL over $8 million per annum. This cannot continue. Work practices at the Container Port must be customer focussed, flexible and modern.”

Mr Gibson said POAL was going back to the bargaining table with a fresh determination to talk to MUNZ, and get the collective the Port needs to operate competitively.

He said MUNZ must be ready, willing and able to deliver modern customer service.

POAL Chairman, Richard Pearson said the Board is fully supportive of Mr Gibson’s approach and is unanimous in its view that this approach is in the best interests of the company.

How soon will the MUNZ members be back at work?

As soon as possible, but no later than 6 April. Until then, MUNZ staff will be paid, but Ports of Auckland will be working with them to ensure the return to work is safe for everybody.

Until MUNZ members return, POAL’s non-union permanent stevedores will continue to work the port. They have set new benchmarks particularly around vessel turnaround and crane operating rates.

“For the first time in 61 years the container terminals have worked through strike action,” said Gibson. “The past four weeks have seen the new modern approach to work at the port in action with crane rates not previously achieved at Ports of Auckland. “

“It is a credit to our people who have kept working through the strike, and gives us real hope for the future.”

Does the Port still intend to contract out?

That proposal is still there, but for now it is on hold. We’ll be talking to MUNZ and trying to get that changes we need through a new collective. Ports of Auckland also confirms that retaining the right to contract out in the collective remains a bottom line.

You’ve been talking for months – how will you work together now?

These outdated conditions have been at the Container Terminals for a long time, and mindsets take a while to change. But the Company is very clear about where we need to take this business, and we will get there.