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Alliance Group’s annual result includes a $19.9million provision for back-paying employees for the time spent putting on and removing work-related protective gear and clothing.
In May last year, the Court of Appeal declined an appeal from meat industry employers against an Employment Court decision that ruled "donning and doffing" was "work".
That decision meant workers would be paid for the time they spent preparing to go to and from rest and meal breaks, including taking off and cleaning their safety equipment and going through complex hygiene processes.
In a statement announcing the annual result yesterday, Alliance Group said a proposal to resolve those claims was subject to ratification by the New Zealand Meat Workers Union.
Alliance Group announced underlying profit of $27.4million for the year ended September 30 — up from $20.7 million last year — but when adjusted for one-off events [donning and doffing], that brought it down to $7.5million before tax. Revenue was a record $1.8billion, up from $1.7billion last year.
Chairman Murray Taggart described it as a "credible performance", given the disruption and volatility in global markets due to Covid-19. There would be no profit distribution to shareholders this year, reflecting the challenging operating environment.
“The co-operative has faced challenges on many fronts. Like many businesses, we have been impacted by the pandemic, however our farmers also experienced extreme weather including drought, snow and flooding in parts of the country and difficult growing conditions. These on-farm challenges also flowed through to the co-operative.
“Alliance Group displayed agility and diverted product to other markets and changed product forms for the different channels as the global pandemic gathered pace. We worked to ensure our supply chains were as robust as possible,” he said.
Chief executive David Surveyor said the company’s response to the challenges was pleasing.
“We are proud of how our people across the business responded to the Covid-19 situation. Our people went above and beyond to deliver for our farmers, our customers and the country.
“The implementation of our business strategy, the approach to sales, the continuing level of investment in the company and the building of capability over the past five years has cemented our resilience to deal with change and disruption to our business and demonstrates the company has the right strategy in place," he said.
Alliance Group’s market share for ovine, bovine and cervine had grown over the past year and its beef performance was particularly satisfying. It had grown the cattle business by about 50% over the past five years and, this year, processed more than 300,000 cattle.
Mr Surveyor said the financial result excluded money the company might be eligible for under the Government wage subsidy scheme. Alliance claimed just over $34million and it had paid $17million of that back.
The company and the Ministry of Social Development were "currently working in a principled and constructive manner" to resolve the amount Alliance was entitled to retain, he said.
"None of this amount will be recognised until discussions with the MSD are complete. The co-operative has already returned money that was not required for the purpose of retaining jobs and income, he said.
In their chairman and chief executive’s review, Mr Taggart and Mr Surveyor said one of the positives to come out of the Covid-19 situation had been a greater awareness of the importance of the primary sector.