The Essity factory in Kawerau is a local manufacturer of toilet paper. Photo / Mead Norton
The union representing strikers at the Kawerau plant is pledging to fight employer Essity after accusing the company of threatening legal action involving more than half a million dollars in damages.
The pulp and paper workers’ union says the company is seeking to make 62 individual employees “jointly and severally liable” with the union for $542,852 in damages plus costs.
The escalation comes as 145 members have been locked out of the Kawerau factory over the past three weeks.
The union said Essity’s legal threats were tied to technical details of a strike notice issued in July demanding a pay rise to match the rising cost of living.
Essity managing director in Kawerau, Peter Hockley, said the case was ongoing, with the company challenging the legality of some union strikes, but the case was likely to be “weeks or even months away. “.
The company was focusing on planned talks with the union later this week “to try to find a way out of the current impasse”.
Union secretary Tane Phillips told the Rotorua Daily Post that some workers were “really upset” and “very angry” at the legal threats.
“They see it as a betrayal by the company. Some of them are very angry. There’s a whole range of emotions.”
The union had until September 8 to respond to the Labor Relations Authority, he said.
“We don’t think we’ve done anything wrong, so we’ll defend him.”
In a written statement, he described the threat as “an absolute punch in the guts” for a group of workers who had already been locked out without pay.
“We are not going to be intimidated by expensive lawyers or threats from bullies. All we ask is that our salary keep up with inflation. Essity is a large, very profitable company that can easily afford it. .”
Rik Tauroa, who has worked at the factory for 19 years, said he was one of 62 workers facing legal threats.
The shop steward said it was a “shock” that staff were being threatened with hundreds of thousands in damages – which he said came down to around $8,000 per person.
The group had not been paid for five weeks because they had been on strike for two weeks before the lockout, he said.
“We’ve been off work for five weeks now – that’s a lot of money we’ve lost. To say we’re going to pay more and more.
“For our new members, who haven’t been in the factory for so long, they have problems that are getting worse anyway. They can’t pay their mortgage, they might be the only breadwinner. That’s a lot of stress, okay.”
Meanwhile, the Maritime Union of New Zealand issued a statement supporting the locked out workers, with National Secretary Craig Harrison saying maritime workers were contributing financially to affected staff.
It would increase support if the employer continued “to try to starve the workers into submission”.
NZME asked Essity why it was taking legal action against 62 employees and why not all 145, along with the technical details of the strike notice issued in July.
In a written response, Essity said it would meet with union members on Thursday and Friday this week “to try to find a way out of the current impasse”.
“We want to find a way to get us all back to work and hope that the facilitation with the Employment Relations Authority will help find a way forward,” Hockley said.
He said that if the company and the union cannot find common ground, it “would jeopardize the future of manufacturing at the plant and the 200 local jobs it creates”.
“We are keen to find a solution, but it cannot be at any price.”
Regarding the court case, he said the company had “challenged the legality of certain union strikes”.
“But it will likely take weeks or even months. We are focused on the talks later this week and trying to find a way forward so we can all get back to work and protect jobs for the future.”
The statement said Essity locked out the strikers after 19 days of industrial action and that its offer was “very close” to the union’s demand. But the union’s refusal to budge has stalled progress completely, he said.
Essity’s three-year offer was 14.7%, with a 3% wage increase plus a lump sum payment of $4,500 equal to an additional 5.4% to address current inflationary pressures in 2022 and a 3% salary increase in 2023 and 2024. .
“The union wants 7% on future pay rates – it came to the table with that demand in May and hasn’t budged since, despite several increases to our offer,” Hockley said.
“There is no way that the increase in base rates will be sustainable, including when inflation starts to decline as everyone predicts.
“It also ignores the huge increase in production costs – energy costs have doubled, shipping costs have increased fivefold and pulp and other materials at record highs. We cannot continue to increase the costs – something has to give.”
Hockley said pay rates at the plant have exceeded inflation by 10% in total since 2017, and the average wage for unionized workers at the Kawerau plant is $120,000 a year, including overtime.
“Our employees are good workers and they are paid well for it at rates well above most manufacturing jobs.
“Economic pressure saw another major mill close last year and another cut pay rates to stay competitive. Kawerau is the last remaining paper production and manufacturing mill in the country, supplying almost 50% of the market – the rest is made from imported paper and Essity’s production could follow the same path if the mill were forced to close.Over the past 12 months we have also seen two of our main competitors leave New Zealand due to cost pressure.
“Essity has shown its commitment to the Kawerau plant by investing $130 million in plant upgrades over the past few years – strike uncertainty has put an additional $15 million investment on hold to upgrade our paper machines and drastically reduce the plant’s carbon emissions. “
Essity is a Swedish-based multinational that made $1.8 billion in profits worldwide last year. Its brands in New Zealand include Purex, Sorbent, Libra and Handee.