Kawerau: 145 workers at toilet paper factory locked out for two weeks without pay

The workers were locked out of the Essity factory in Kawerau – a local manufacturer of toilet paper. Photo/NZME

For two weeks, 145 workers were locked out of their workplace in Kawerau without pay.

And no end is in sight, with the company suspending a planned $15 million project as the employment stalemate continues.

Pulp and Paper Union Kawerau union secretary Tane Phillips said a lockout at the Essity plant had been in place since August 9.

Essity is one of the world’s largest hygiene and health companies and its brands include Purex, Sorbent, Libra and Handee, the union said.

On August 9, the Bay of Plenty Times reported that the union had claimed the country’s toilet paper supply could be at risk after Essity locked out 145 workers indefinitely, who called for an adjustment to the inflation as part of their collective labor agreement negotiations.

Phillips said three contracts were being negotiated on behalf of those employees.

“If they don’t get the CPI, they back off,” he said at the time.

Speaking to the Bay of Plenty Times this week, Phillips said the union was seeking wage increases in line with inflation and the rising cost of living. The quarterly increase in the consumer price index (CPI) in June was 7.3% from a year earlier.

While the company had offered an additional one-time payment in the first year of the three-year contract, he said salary increases in the other two years did not match expected inflation.

He said the union’s position was based on analysts’ forecasts of an aggregate increase of 15% over three years.

Phillips said that despite negotiations over the past week, “the company is not willing to go into lockdown.”

He claimed the company was telling workers ‘they can’t come back until they agree to the terms and the pay the company has offered them’.

Phillips said the union is trying to help workers “where we can” with food stamps.

Roger Coffin, who has worked at the plant for 22 years, is one of 145 locked out workers and is also a shop steward.

“A lot of things that happened in the last two weeks – it’s unprecedented. I’ve never seen it,” he said.

“We were never locked out.”

Coffin said he was “lucky” to have saved money “for a rainy day” and was getting by without pay.

But he was worried about young employees and those who were new or on fixed-term contracts who “potentially would not have had the ability to put anything aside”.

He said many union members wanted to return to work.

“But they must get much better than the offer.”

Essity claimed that the union’s pay rise demands for collective bargaining would result in loss of investment and threaten local jobs.

Essity’s wage offer was a 3% raise for each year of a three-year deal and a one-time cash payment, making the first year’s payout the equivalent of 8.3%.

The managing director of Essity’s Kawerau site, Peter Hockley, said the company had “well paid” employees, who were among the “highest paid workers in manufacturing in New Zealand, earning close to the double the median weekly wage of New Zealanders”.

“We want to continue to offer attractive wages and working conditions because it is good for employees, our company and the local community. Our wage offer maintains attractive conditions, takes into account the effects of inflation on employees and is more than fair and reasonable.”

Hockley said the company had no choice but to lockout in an attempt to reach a deal, after 19 days of strike action and ongoing wage demands that threatened the future of the site and jobs .

He said that due to the conditions created by the standoff, Essity had indefinitely put a major paper machine modernization project on hold that would help the viability and future of the site.

The $15 million project would upgrade Essity’s paper machine drying process to geothermal steam, delivering a “world’s first innovation”.

Essity was trying to minimize disruption to customers and had pledged to reach an agreement that provided a fair and reasonable wage increase for employees and protected the future of its New Zealand manufacturing operations.

Essity did not respond directly to comments from Tane Phillips and Roger Coffin.