Hayden Donnell at NZ Herald reports:

Ports of Auckland workers are set to strike for a full week in a new escalation of their long running employment dispute.

The just-announced strike action is set to start at 7am on February 24.

It is in addition to a partial strike set to take place from February 15 to 22.

So basically, they will be on strike for two weeks continuously.

How long until all the customers have gone to Tauranga?

Ports of Auckland have put out a PR around their plans to expand their current space:

In the context of the Auckland Plan process, the Port’s key interest is in protecting the current port zone, which has been through two public submissions processes and has been in place and public since 1987.

The zone effectively allows the option for port expansion in the future, but any actual proposals for expansion of Port operations would then be subject to widespread public consultation and Resource Consent processes.   

While I’m on POAL’s side when it comes to having an economically sane labour market, I’m very much against any expansion on their current site.

POAL say that their zone has been in place since 1987. That is in fact the problem. They were zoned for that area when the waterfront in Auckland was massively different to what it is today.

The same applies in Wellington. In 1987 the waterfront was a collection of sheds.

Waterfront space has become the most valuable space in urban cities. It is where people want to dine, drink, walk and shop.

In Wellington I am an advocate of shifting the port entirely from its current location over to Petone/Seaview. That will provide more jobs in Seaview, and open up the current port space to immense possibilities. Yes, it will cost money to shift – but a shift should be inevitable – when not if. The current port is an eyesore.

The same applies in Auckland. Ports of Auckland should not be relying on a 25 year old zone. They should be looking for a new site away from the centre of the city, as their long-term home. Sure you have issues such as rail and road links, but they can all be planned for also.

If you want to have your say and hopefully oppose Port expansion on its current site, go to Your Port Your Call’s page on Facebook or Twitter.

Ports of Auckland have twice released information on average remuneration levels for wharfies or stevedores employed by them. Many on the left have claimed these figures are wrong on the basis of a column by Matt McCarten which used third hand information from the union.

It has been interesting seeing so many try to deny factual figures, on the basis of just wishing they were different, as they are unhelpful to their cause.

Anyway Ernst & Young have audited the Ports of Auckland figures, and confirmed them. Hopefully this means the deniers will now be quiet. I’ve embedded below the Scribd by Whale.

Ports of Auckland Fact Sheet – Ernst and Young

A summary is:

• Ernst & Young found Ports of Auckland was correct in stating that the average remuneration for full time stevedores was $91,000.
• Not a single full-time stevedore earned as little as the $56,700 described by theMaritime Union as the basic wage at Ports of Auckland.
• Ernst & Young found that even part time stevedores made more than this, earning on average $65,000.
• 43 individuals earned over $100,000 with the highest earner making $122,000.
• Union claims that a stevedore would have to work around 32 weeks of overtime a year to receive the average remuneration of $91,000 are untrue.
• The $91,000 includes a range of allowances, benefits and shift payments with the average number of hours paid per week averaging 43.9.
• However, the real issue is the lack of flexibility which results in an excessive amount of paid downtime at the port. This means that for every 40 hours paid, Ports of Auckland’s stevedores are only working 26.

So Ernst & Young have confirmed that the average remuneration for a wharfie at POAL is $91,000 and the average umber of hours actually worked a week to gain that is 28 (26 x 44/40). That is an average hourly remuneration of $62.50 for actual hours worked.

The Maritime Union have said their strikes and industrial action is because they are against casualisation at Ports of Auckland. Labour have also said this is what they are concerned about.

However Cactus Kate blogs:

The problem with MUNZ’s, Fenton’s and the left’s argument about casualisation is that right now MUNZ is pursuing a case against POAL in the Employment Court to prevent the Port offering permanent jobs to “lashers”.

This is not a joke. They are AGAINST casuals getting permanent jobs.

You may think so, but not when the Union bullies (mainly old, white crusty’s like the charming couple we met yesterday on this blog) have the top jobs and like to take the overtime at their much higher rates rather than allow the lower paid workers to get permanent jobs.

The Herald reports:

Despite the considerable union influence within his party and calls for him to offer support to Maritime Union members, new Labour leader David Shearer has kept quiet on the matter.

Yesterday Labour industrial relations spokeswoman Darien Fenton, who has been spotted on the picket line at the port, said her party was not taking sides in the dispute.

“We’ve been hoping that the parties will settle this, that they’ll find a way through this.”

You’ve been on the picket line, and now you’re saying you’re not taking sides? I think someone has squashed Darien.

Ms Fenton said Mr Shearer had been in regular touch with both sides, “and he’s in contact with me and we’re all discussing it regularly”.

“Our strong view at this point is it’s not helpful for politicians to get involved.”

Apart from being on the picket line?

I suspect that strong view is Mr Shearer’s.

Chris Trotter did an open letter to Shearer yesterday urging him to wade in:

Ultimately, isn’t it about answering the question: “Who is strong enough to stop the stone-throwers?” The men and women who formed the Labour Party in 1916 decided that the answer to that question was the State. If the State could be made to stop working for those who already exercised power, and began instead to work for those who were powerless, then a political party seeking to put an end to poverty, war and injustice would have a fighting chance.

Labour was formed to create a State that wasn’t neutral; a state that never stood on the side-lines when working people were being threatened and abused. Labour was about intervention: constant, massive, intelligent and creative intervention on behalf of the weak and against the strong.

It’s time to bid farewell to the white sands and the Pohutukawa blossoms, Mr Shearer, and come on down to the Auckland wharves. It’s time to cast aside the gathered cloaks of a spurious and culpable “neutrality” and place yourself and your party between the stone-throwers and their victims. It’s time to end the silence.

28 Auckland Council Local Board Members have called on Ports of Auckland to surrender to the demands of the Maritime Union, and rule out any contracting out as that will have few work-life balance protections.

I guess having to work more than 28 hours a week to have remuneration of $91,000 would upset the work-life balance.

The majority of the 28 board members are well known Labour activists. Useful of them to provide a hadny list of whom not to vote for.

Worth  noting that the total number of local board members is 148, so 120 have not signed the Labour Party missive.

Mike Hosking’s editorial:

In a way, you can’t blame the wharfies for putting up the fight they are at the Ports of Auckland. I mean if you were being paid to do nothing, you would be looking to hang on to the deal, wouldn’t you?

Eight hours pay, three hours work – good on them for getting the deal. God only knows who was thick enough to sign it off, but the game’s up. The port is lacklustre. it’s losing business and money to other ports. Its reputation isn’t flash and at long last they’re looking to get things tidied up.

What a good summary.

The wharfies have lost. They don’t have the support of the company, of the council which owns them, they certainly don’t have the support of the Auckland ratepayers who are watching a company they own get destroyed, and they don’t have the support of the wider public. Through all the bluster and hot air and jibes at management pulled directly out of Arthur Scargill’s handbook on how to run a class ridden industrial dispute, they have been seen for what they are – a fiefdom on a deal from another age refusing to be realistic.

Even Len Brown doesn’t back them. The man who took their money to get elelcted sees it for what it is. He should have been playing a far greater role before it ever got to the state it’s in. Ports of Auckland is a major company with a major contribution to the economy of the biggest city in the country and it’s operating in a time warp. Business is leaving – Maersk has walked, Fonterra’s gone.

This even goes beyond Auckland. Reducing freight costs through more efficient ports and the like has benefits for all of New Zealand, especially exporters.

Where’s the council? The owners? The representatives of all the rate payers who have a stake in the business? The dividends are a joke compared to Tauranga. Do they think the port is a welfare scheme? A jobs programme? Why aren’t they demanding better performance and better returns? The answer is there – lay them off. Too many strikes, too many lock outs, too much disruption. Get rid of them and find some people that actually want to do the job.

We must thank Mike Lee for buying out the minority private sector answers, so ratepayers would be the only ones having to tolerate a return of just 2% on capital.

Brian Gaynor provides some excellent analysis:

One of POA’s biggest issues is its wage bill of $54.9 million compared with POT’s total employee expenses of $25.3 million, even though the latter is now the larger port.

Port of Tauranga was miniscule when it listed 20 years ago, but today has higher revenue, earnings and dividends than POA.

POT is an excellent model for the proposed partial sale of the Crown-owned electricity generators and Solid Energy.

The port company had a 10 per cent ownership restriction, a strong board and management and has performed exceptionally well as a listed company under the public/private ownership model.

In 2002, the company had a capital return of $7 per cancelled share on the basis of one share for every eight shares held, and the following year it had a two-for-one share split. Thus an investor who bought 1000 shares for $1050 in the IPO has had $875 of capital returned, and the remaining 1750 shares are now worth $17,850 at $10.20 a share. These figures do not take into account total dividends of more than $370 million over the two decades.

In other words, POT’s sharemarket value has surged from $80 million to $1368 million over this 20-year period and the Bay of Plenty Regional Council, which still owns 55 per cent, has been a major beneficiary of this.

Stunning results. And the key thing to note is a mixed ownership model can result in the public’s stake being worth more at (say) 55% than if they had retained 100% ownership.

As the accompanying figures show, POA has been hammered by POT in recent years: POA’s ebitda has fallen from $92.6 million in 2003 to $74.4 million, whereas POT’s has increased from $69.5 million to $95.0 million; POA’s ebitda margin has fallen from 55.3 per cent to 40.5 per cent while POT’s has increased from 47.6 per cent to 51.2 per cent; most importantly, POA’s dividend has declined from $34.5 million to $17.6 million while POT’s has increased from $22.8 million to $40.2 million.

This is a huge concern to Auckland ratepayers as the $17.8 million POA dividend represents a return of only 2.1 per cent on POA’s $848 million 2005 takeover value.

Mike Lee should be held accountable for this.

In 2010, POA had total employee expenses of $51.9 million compared with only $18.5 million at POT and last year employee benefits plus pension costs were $54.9 million at POA compared with POT’s $25.3 million.

This is what happens when people get paid for 43 hours, despite only working 28 hours. I am presuming the POT costs included contracted labour.

Lee made the ridiculous statement that POA and POT should act in an anti-competitive way by working together to get better rates from shipping companies. He went on to say that the shipping cartel Maersk and Fonterra “have kept prices right down by playing Tauranga off with Auckland” – yet Lee was primarily responsible for stopping merger talks between POA and POT.

We want competition between ports. That drives efficiency and productivity gains.

In my column at the NZ Herald. I start by saying:

The industrial action at the Ports of Auckland has reached the point, when a compromise solution is about as likely as there being a compromise solution over the Falkland Islands.

Instead, like the Falkland Islands, there will be a war, and there will be a winner and a loser. There will also be the significant possibility of casualties from other parties.

The two combatants are the Ports of Auckland (POAL) management team led by Field Marshall Toby Gibson and the Maritime Union of New Zealand (MUNZ) led by Generalissimus Garry Parsloe.

The stakes are high for both sides. The losing side will be humiliated and powerless.

I also look at who else faces being dragged onto this war.

Denis Welch blogs:

The Labour Party’s silence on the Ports of Auckland dispute is getting louder. Robert Winter has drawn attention to this in an excellent post: he says the dispute has become, potentially, the first defining moment for Labour under the new leadership of David Shearer, and they have to ‘step up and come out swinging on this issue.’

We wish. What is already remarkable about the dispute is how depoliticized it is, with not just Labour but all political parties keeping well clear of it. It’s a far cry from the days when ministers personally intervened in industrial action and Labour politicians sided with striking workers, even joining them on the picket line.

Oh I would love to see Labour MPs out on the wharfie picket line. That would be the best Xmas present ever.

But unless David Shearer is a moron, he will not be getting involved in this industrial dispute – especially as public support for the wharfies is confined to the UNITE union and the hard left.

When Denis Welch and Robert Winter urge David Shearer to get involved as a test of his leadership, they are not advocating in the best interests of the Labour Party – they are advocating for their views (nothing wrong with that) which are far to the left of Labour.

I don’t know if anyone has approached Shearer for comment or asked, um, wait a minute, who is Labour’s spokesperson on labour issues? I just looked it up: it’s Darien Fenton. Who knew? She may well be intensely credible on industrial relations but I don’t believe we’ve heard from her yet on the ports dispute.

I presume they have sedated Darien to stop her joining the picket line

The only Labourish public figure to even put a fingertip over the trenches so far is Auckland mayor Len Brown, and he has come down on the woolly side of woofterish by declaring resoundingly that he supports both sides.

There is an unhappy echo there of Walter Nash’s infamous response to the 1951 waterfront dispute when he was Labour’s leader: asked whether he supported the watersiders he said he was neither for nor against them. I have a horrible feeling that Shearer, if he ever does comment, will say much the same thing.

Shearer should choose his words more carefully than Brown, but he absolutely should not come out swinging for the Maritime Union. It would just pigeon hole him as captive to the unions which fund the Labour Party (MUNZ is one of them). Only 25% of NZers voted for Labour. I suspect not even a majority of those 25% have sympathy for militant industrial action from a union representing what must be the most highly paid unskilled jobs in New Zealand.

At the most you might get Shearer saying that he is against contracting out (as this is existing Labour policy), and wants both sides to reach a settlement. But he should resist all efforts to get him involved. He is the leader of the parliamentary labour party and of the opposition – he is not a union spokesman. Clark would have never got involved, and Shearer shouldn’t either.

Talking of MPs with a view though, a good column from Botany MP Jami-Lee Ross. He notes:

Every Aucklander has a stake in the Ports of Auckland. It is not a privately owned company. Nor is it listed on any stock exchange. Each and every share in the company is owned by the Auckland Council on behalf of 1.4 million Auckland residents and ratepayers. The destruction in value in one of our city’s largest public assets is alarming and has to be of concern to us all. …

But numbers aside, it is obvious that losing the trade of New Zealand’s largest company, only a month after losing the business of one of the worlds largest shipping lines, has to be a wakeup call. Yet sadly for the Maritime Union, it isn’t. Sadly for port workers and Aucklanders alike, the Maritime Union continues to be unphased.

This isn’t a story of a greedy corporate hammering the little guy. This isn’t a story of a David versus Goliath battle where workers are being ripped off or paid a pittance. Few could call poverty on an average annual wage for a wharfie understood to be north of $90,000, with a proposed 10 percent hourly rate increase and performance bonuses of up to 20 percent, sitting on the table. To the average person on the street, the latest Ports of Auckland offer to the Union would almost seem generous.

It would be most interesting if the Herald (or someone) did a poll to ascertain the public’s views on the stand off.

The trade union movement evolved through a desire for workers to band together to protect their common interests. This is not a dishonourable goal. But when a union loses sight of its members long term interests and cavalier negotiating tactics start to backfire, the union itself begins putting its own member’s livelihoods at risk.

Unions still occupy a privileged position in New Zealand’s employment law; a relic of the last Labour administration which has not seen significant overhaul for some years. Few non-government organisations can boast clauses in legislation specifically designed for their benefit. Despite only 18 percent of the nation’s workforce being unionised, trade unions can look to whole sections of the Employment Relations Act written exclusively to aid union survival through legislative advantage.

Unions do get many major legislative advantages. These should be reviewed. Take just one – why should employers act as unpaid fee collection agents for unions?

I say unions should be like any other incorporated society – let them invoice their members directly for their membership fees.

UPDATE: It seems Labour Whip Darien Fenton has been spotted on the picket line. No surprise, but will we see other Labour MPs join her?

Inventory2 has blogged at Keeping Stock the comment left on another blog by Ports of Auckland Ltd relating to the earnings for stevedores or wharfies. The key points are:

• average remuneration for a full-time stevedore $91,480
• average remuneration for a part-time (guaranteed 24 hrs a week) stevedore $65,518
• 53% of FT stevedores earned over $80,000 and 28% over $100,000
• The highest annual remuneration was $122,000
• Stevedores also get 15 days sick leave per annum (triple the minimum) accumulating to 45 days (two months if continuous) and five weeks annual leave
• All training for stevedore tasks is done in-house, paid for by the company
• Stevedores who earned the average $91,000 worked an average of 43 hours a week, or 49 hours a week if you factor in leave.
• 35% of hours paid are for when there is no work to be done, so those 43 paid hours, on average only 28 hours are actually worked.
• This means the effective pay per hour worked is an average of $62.50 per hour ($91,000/52/28).
• At Port of Tauranga which has an 80% labour utilisation rate, stevedores get paid from when the ship arrives to when it leaves. At Auckland they get paid in eight hour blocks, even if the ship is only there for two hours.
• These figures are not inflated by redundancy payments

Incidentially POAL, in response to a question about how Cactus Kate had these figures, revealed that she simply e-mailed and asked for them.

This highlights for me the value of blogging. Because Kate took the time to send a simple e-mail, now most New Zealanders know about the average pay of wharfies in Auckland, as the figure has been widely reported since she blogged it.

I have to say $62.50 an hour is a pretty good pay rate for a job where all training is done on the job – no qualifications or skills needed. One can see why the union is fighting so hard to keep a system where you get paid for 43 hours a week, despite there being only 28 hours of work. It forces POAL to hire more people than they really need, and ironically penalise POAL for being efficient. If they turn a ship around more quickly (say by investing in better cranes), they still have to pay staff for eight hours work.

What I would do if I was a clever stevedore is offer POAL a contract where if they finish a ship early, they get paid a bonus, or a higher hourly rate. That way they both win.

Fran O’Sullivan writes in the NZ Herald:

It seems pretty obvious that the ports company has been determined to ensure productivity at its downtown Waitemata Harbour operations is markedly increased. Particularly in the vital area of crane productivity, where rival Port of Tauranga sub-contracts its container stevedoring work and boasts a superior performance to its Auckland competitor.

If the Maritime Union didn’t see this one coming, then they haven’t been paying much attention to the Ministry of Transport report on container productivity at New Zealand ports. Nor has the union been paying attention to the Productivity Commission which estimates exporters and importers spend upwards of $5 billion a year on freight and has forecasted annual trade could be boosted by $1.25 billion if transport costs were shaved by 10 per cent. There is a national interest issue at stake here.

$1.25b if costs are down 10%. The Ports of Auckland are definitely working in the national interest if they can make themselves more efficient.

I note the Port of Tauranga sub-contracts its stevedoring work out. Maybe that sub-contractor could apply to do the work for Ports of Auckland also?

Well this is called playing the trump card. Ports of Auckland have said:

Ports of Auckland has advised the Maritime Union of New Zealand – Local 13 (MUNZ) that it does not find the counter-offer tabled on 6 January attractive, and that while it will continue with collective bargaining, it is proceeding with a proposal to contract out its labour force. …

“I welcome the opportunity to discuss these matters further with MUNZ when mediation resumes on Thursday. However, we’ve run out of time. Without rapid changes towards substantially more efficient labour practices, more customers and more jobs will be lost in the coming weeks.

“We’ve worked now for 11 months to achieve the changes needed, but the Union does not appear to be taking the issues seriously,” he said.

Gibson says the Port’s last offer remains its best and final offer. It includes a generous 10 per cent rise on hourly rates, performance bonuses of up to 20% on hourly rates, and the retention of existing benefits and entitlements in return for a new roster system that will provide increased operational flexibility while allowing workers to plan their rosters a month in advance.

As it signalled before Christmas, in parallel with the collective bargaining process, the Port is progressing plans for redundancies as a result of the loss of the Maersk and Fonterra business, and will begin a consultation process this week over a proposal to contract out its labour force.

Mr Gibson said that if the proposed contract labour model was to proceed, he expected that the majority of affected employees would continue to work for the Port as employees of the selected contractors.

The average wage for a wharfie there is $91,000 a year. It is likely to exceed $100,000 a year under the POA offer.  Many people would kill for such a job.

Labour wants to change the law so Ports of Auckland do not have the option of contracting out its labour force if this is more efficient. Their policy is that any contractor should be forced to offer the same terms and conditions. This would mean that the union (which is affiliated to the Labour Party) remains much more powerful.

It only took a couple of blog posts pointing out his donations from the Maritime Union, and Len has leapt into life on the issue of the militant industrial action by the union. Better late than never, I say. The Herald reports:

Auckland Mayor Len Brown has issued an ultimatum to the Maritime Union in the bitter industrial dispute on the city’s wharves, saying there must be more flexibility in work practices to make the port more productive and profitable for the council.

Excellent. It is not just a matter of being more profitable for the Council – it is also being productive and competitive for its customers. They do have choice, and have been using it to desert Auckland.

Mr Brown – a member of the Labour Party who received a $2000 donation from the Maritime Union towards his 2010 election campaign – yesterday said the board and management of the 100 per cent council-owned port company had his full confidence but he refused to express confidence in the union, which he was not responsible for.

It is good he has now backed the Council owned company.

In a sign that he is standing up to the union, which is set to strike again tomorrow for 48 hours, Mr Brown said it was time to review some of the decades-long work practices to reflect the increasing and changing trends of the international shipping market.

The practices are probably little changed from the 70s.

Maritime Union president Garry Parsloe said the union had offered to investigate changes to improve productivity …

Ha, offered to investigate. How stupid does he think Ports of Auckland management are, that they don’t realise that is no commitment at all.

Ports of Auckland have confirmed today that Fonterra had decided to move its export shipments from Auckland to other ports, from the end of January because of ongoing strike action at the port by the Maritime Union.

This will see weekly trade worth around $27m go through the ports of Tauranga and Napier instead of Auckland.

Now readers will recall that the average wage for a FT wharfie in Auckland is $91,000. This is for an unskilled job where training is on the job. But what is POA offering the union?

• a 10 per cent rise on hourly rates
• performance bonuses of up to 20% on hourly rates
• retention of existing benefits and entitlements
• a new roster system that will provide increased operational flexibility while allowing workers to plan their rosters a month in advance

Those slave labour drivers. A 10% increase on hourly rates would push the average FT salary to around $100,000 a year. And 20% performance bonuses is just an evil capitalist divide and conquer strategy. If you start paying staff performance bonuses, then the good staff will end up getting paid more than the bad staff.

Cactus Kate has details of the impoverished wages that the wharfies are striking over at the Ports of Auckland.

Their oppressive employer is only paying them:

• An average full-time wage of $91,480
• Free medical insurance for not just the stevedore, but their entire family
• Three times the statutory sick leave entitlement, being three weeks a year accumulating up until nine weeks.
• Fully paid in-house training (no qualifications needed)
• Five weeks annual leave

The wharfies will be disappointed Labour did not win the election, because Labour’s proposed Workplace Commission could have ordered Ports of Auckland to pay them more money, in line with a industry standard they set.