New Zealand dairy workers to take industrial action against Fonterra’s withdrawal of long-standing bonus pay

The following article is from the New Zealand Press Association (NZPA) and outlines possible industrial action at Fonterra by the IUF-affiliated New Zealand Dairy Workers’ Union. 

Industrial action looms for dairy giant Fonterra after talks collapsed in the renegotiation of a pay deal for the dairy industry’s biggest collective.

Six days of negotiation have failed to bring about agreement of a new deal at Fonterra for its 4500-strong dairy workers’ collective. [AFW notes: negotiations had actually been underway for more than six weeks]

The Dairy Workers Union (DWU) is seeking a pay increase of 8 percent this year and Consumers Price Index (CPI) plus 1 percent for the second year.

Fonterra has offered 5 percent plus a 2.5 percent lump sum this year and CPI plus a 1 percent lump sum for the second year and CPI plus 1 percent for the third year.

“While this may appear on the surface that the parties are not far apart, Fonterra have withdrawn the bonus which has been in operation for the last five years and has been worth an extra 2 percent on average,” said DWU national secretary James Ritchie.

“So in effect, Fonterra are offering a pay increase less than CPI, and swapping the bonus for a one-off lump sum payment for this year only.”

Mr Ritchie said Fonterra shareholders had had their best year ever, with a payout of $7.90, up 77 percent on the previous year.

“Workers are looking for their fair share in what has been a bumper year for the industry and are recognising current economic circumstances by putting forward a modest claim for a possible second year of any agreement.”

The union has given two weeks’ notice of “work to rule” industrial action.

Mr Ritchie said the action was “very limited” in order to protect the environment and have minimal financial impact on farmers.

“We hope that Fonterra will take a more flexible and reasonable approach when we next meet so that a deal can be struck.”

Dairying is considered an “essential industry” and both sides are required to attend mediation before industrial action can be taken.

If it fails, the action will begin on November 17.

This article is provided for informational purposes only and does not necessarily reflect the views of the IUF.