Workers pay the price for contracting

It doesn’t take much to understand why the port workers are so opposed to their work being contracted out.
It’s not just that these workers will be forced out of their jobs and made redundant but that we can see the huge social damage from contracting out which has occurred across the New Zealand economy.
Big employers like contracting because they claim it leads to greater efficiency and higher productivity. They say contractors can ensure the job is done at the lowest cost and is the model we should follow wherever possible.
However what they don’t say is that the gains are made simply by undermining the employment conditions of workers.
Under contracting the jobs become lower paid with unstable, unsocial work patterns. Job security disappears as permanent jobs are replaced by casual employment with workers employed on permanent part-time contracts without guaranteed hours of work.
Two examples from my work as a union organiser illustrate the problem from a worker’s point of view. During the financial crisis the New Zealand outpost of the US global giant Goldman Sachs JBWere decided to save money by contracting out the receptionist desk role of one of our members. She was a permanent employee working regular shifts and earned $21.50 an hour. She was doing a good job and the bank said they were keen for her to continue under the contractor who would staff the position. However when the contracting company offered her job back to her the pay rate was now just $17 an hour. In effect half her pay cut would be saved by the bank and the other half would go to the contracting company which clipped the ticket as the middleman in the employment relationship. A win for the bank, a win for the contractor but a 21% loss of income for the worker.
The other example was a change of contractor for the work of the staff who assist with the X-ray machines and checking of baggage at the arrivals hall at Auckland Airport. Two years ago the contracting company Enterprise lost the three-year Ministry of Agriculture and Fisheries contract to a new contractor called Adecco.
Adecco required all the employees to reapply for their jobs and, surprise, surprise, the main union delegate, who had built the union membership and was a strong advocate for these low-paid casualised workers, lost his job. The company said he didn’t measure up to their standards as an employee despite the fact he’d done the job as a team leader for many years. The pro-worker veneer of the contractor was as transparent as their grab for profit. So a few weeks before Xmas our member was out of his job with no redundancy payment.
This is the scenario which awaits the port workers.
The port company will give a nod and a wink to the contractor to ensure any worker with a record of speaking up for workers rights on the job will not be employed.
Port workers will get rosters which can change at a moment’s notice. Whether a shift is three hours or 12 hours can be decided on the day for many while others will be left waiting anxiously by the phone to get any work at all.
There was a time when port workers would wait by the gates twice a day to see if they would have work. Port management would give out tickets for the work available. Sometimes whether a worker could put food on the table or not depended on a lolly scramble when tickets were tossed in the air and a worker’s dignity disappeared in the scramble for a day’s pay. I don’t think Auckland Port Company CEO Tony Gibson would lose any sleep if a similar system were to return.
The hidden side of contracting is lower pay and insecurity of work hours and income for the workers. Shifts are allocated by grace and favour of the contractor just as happens on the wharf at present with their casual employees. One port worker told me a few days ago about the port preference to hire new casuals while cutting the hours of existing casuals.
This is a common practice with contracted employment and is done deliberately to prevent a worker making a claim under employment law that the real nature of their employment is as a permanent worker. Contractors work hard to ensure workers have no claim to permanency.
This insecurity with contracted work extends beyond just ensuring a reasonable income for families to problems getting mortgages and personal loans. This comes on top of shift work which is already difficult for family life, especially so nowadays when families depend on two incomes based around casualised shift work to pay the bills.
Meatworkers are now facing a similar struggle with the militant management at AFFCO determined to get more “flexibility” from their workforce to the detriment of the workers’ income and their family life.
Meanwhile the National government has signalled it wants to extend contracting much deeper into public services than at present. This is a socially destructive policy at a time when New Zealand families more than ever need stable employment with decent hours and reliable income. It’s about New Zealand workers being treated with dignity and respect.
This may be an alien concept to the government and the port company but they are important to most New Zealanders. Aucklanders in particular seem to agree with 46% behind the port workers and just 32% backing the port company.
There is a lot at stake on the Auckland port. It’s not just 300 permanent jobs because other employers are watching carefully to see if they can use the same approach to add more to their profits at the expense of workers.


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