Supermarket giant agrees to super-wage deal

Workers’ confidence boosted as supermarket giant agrees to super-wage deal for distribution workers

A new agreement between Foodstuffs North Island (distribution centres) and FIRST Union sets a company-wide precedent for good employment relations within the sector.

The big wage win has boosted workers’ confidence and will affect hundreds of the company’s workers.

FIRST Union and Foodstuffs North Island have settled a collective agreement covering all of the company’s distribution centres that includes wage increases ranging from 9.4% to 25.2%. Additionally, the deal shows businesses how labour-hire contracts can work for both the company and employee. Labour-hire workers have won the right to a fair process in managing their performance, and the worker must be converted to permanent work within six months to ensure employees receive the same benefits they would have rights to on a permanent contract.

The crux of the pay increases

Workers in Auckland with over 5 years or more service with the company will have their hourly rate increased from $20 to $25 within the next 18 months.

All workers in Palmerston North will receive wage increases between 7% and 14% this year as the company has agreed to pay the living wage by October. Similar increases for the Palmerston North with over 5 years’ service also apply next year.

First Union Divisional Secretary Jared Abbott says the agreement marks a new era of relationship between the company and the union.

“This agreement not only sees around 60% of our members receive over 20% in increases by the end of next year, but also sees the company commit to industry-leading practises for engaging labour-hire and the establishment of union management meetings with elected workplace reps from across the country, including those working in subsidiary companies.”

Mr Abbott commends the company for its perseverance and constructive communication during bargaining which began in February.

“What’s most impressive is that this deal came about from the company listening to their workforce, not from strike action.”

He says Foodstuffs South Island still has some way to come but is hopeful they will eventually adopt a similar approach.

“This model allows for a more sustainable business that gives workers stronger spending power within their respective communities.”

Mr Abbott says the company facilitated the involvement of elected workers from around the country to facilitate the creation of the new deal.

The deal includes:

• Increases ranging from 9.4% - 25.2% over the next two years

• All workers paid living wage or above this year

• Workers with 5 years’ service in Auckland receive minimum of $25 per hour in 2019 (plus bonus)

• Workers with 5 years’ service in Palmerston North Cold storage receive minimum $25 per hour in 2019

• All other workers with 5 years’ service in Palmerston North receive minimum $24 per hour in 2019 (with opportunity to reach $25 through incentive scheme)

• Labour-hire workers to receive a fair disciplinary process for any disadvantage (reduction of hours, dismissal) and conversion to direct employment within 6 months.

• Establishment of Joint Consultative Forum with representatives from senior management and worker representatives from each FSNI distribution centre (including subsidiaries)

• On-going discussion around the formation of an Ethical Supplier Policy.

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