Unions, bosses seek ways to minimise redundancies

Unions expect "a flood" of approaches from employers seeking innovative changes to workplaces to help weather the credit crunch, but warn their benevolence will not extend to forgoing wage rises this year.

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Combined Trade Unions president Helen Kelly said in an interview yesterday she would not entertain any discussion of an across-the-board wage freeze or pay cuts to help businesses through the recession.

"Any unilateral approach to wages would not be helpful," she said.

Some businesses were struggling but others remained profitable, and the size of union wage demands would be based on the position of each business, she said.

"Shareholders are not saying that because times are tough they will accept a lower dividend."

All parties - workers, employers, shareholders and the Government - should carry an equal burden as they faced the recession, and that included coming up with workplace changes.

Business New Zealand chief executive Phil O'Reilly agreed that one size did not fit all.

"It is important to take an enterprise by enterprise approach and think about the circumstances of each enterprise."

He said employers were looking for alternatives to redundancy, having learned during the last recession that redundant staff could leave the district or lose skills, meaning they were not available when the economy improved.

"Sophisticated employers understand the old model that you have either got a job or are redundant no longer cuts the mustard - that it is important to keep workers in the workforce."

Air New Zealand recently transferred inter-national pilots to domestic routes to keep them in work, while other employers have changed shift work or reduced the length of the working week or overtime.

Business and union leaders expect similar approaches to that implemented at the Tiwai Point aluminium smelter, where staff were invited to reduce work hours or take leave without pay in a bid to reduce costs.

Summit Wool Spinners in Oamaru reduced shift work in November for 300 workers from 12-hour days to 10-hour days to reduce costs.

Company finance manager Ricky Hammond-Tooke said management did not like doing it, but something had to be done in the face of falling orders.

"In the circumstances, I think everybody is understanding."

An Auckland company was taking each Friday off as annual leave and another company reduced the working week from 40 hours to 36 hours.

Engineering Printing and Manufacturing Union national secretary Andrew Little said he was waiting for "a flood of proposals" given many employers were reluctant to shed staff.

"There is no question demand has fallen. Output and production levels are falling and we expect employers to want to work their way through this."

A number of employers had an extended shutdown over Christmas, but Mr Little said the Rio Tinto-owned New Zealand Aluminium Smelters at Bluff was the only business he was aware of where volunteers were invited to take leave without pay.

Otago-Southland Employers Association chief executive Duncan Simpson said employers had worked hard to recruit and train skilled staff and businesses wanted the ability to ramp up production when the economy improved.

He expected more agreements similar to that at the Rio Tinto-owned aluminium smelter.

"I wouldn't be surprised to see more arrangements like that, particularly in export-oriented industries because the scene out there is very unsettled."

Dunedin business Southern Hospitality was keeping an open mind on workplace changes, managing director Roger Fewtrell said.

The company last year made 40 people redundant and it shed another three staff a few weeks ago as it cut costs after aggressive expansion which saw it open three new branches and employ 50 additional people.

Mr Fewtrell said business had picked up in recent months, but he would look at cost-cutting, including pay cuts, if business fell below budget.

"Whether we will do that, I'm not sure."

Business was volatile, which meant all options - including pay cuts - were on the table in a bid to prevent redundancies.

Other options included job sharing, which was already being adopted by several staff, and leave without pay during the quiet winter months.

Employment Minister Paula Bennett said in a statement she welcomed "creative solutions to save jobs".

Work and Income could offer support and financial assistance including tax credits, should people have their hours cut or they faced taking sabbatical leave, she said.