Weathering the storm

A proposed income insurance scheme for redundancy and sickness is being billed as the most far-reaching social policy development since the creation of ACC.

- REBECCA MACFIE

When Kawerau's paper mill closed last year, the laid-off workers were well cushioned against the blow.

Built in an era of vaulting government ambition 66 years ago, the mill was a relic of a bygone industrial era. The market for newsprint had been shrinking for years as people turned to the internet for news, and everyone at the plant knew the end was coming.

Tane Phillips, secretary of the Pulp and Paper Workers Union, would say to management, “Shut the mill before it's forced shut.” He was worried that if they held on and ran the place into the ground, there would be no money left to pay workers their redundancy.

"They honoured all agreements,” he says of Norske Skog, the Norwegian owners who shuttered the place in June. Those agreements included compensation foreign to most workers in today's labour market: a six-and-three redundancy package, which means they got a payout of six weeks wages in recognition of their first year of service, and three weeks for every year thereafter.

Wages at the unionized site were good: machine operators were on $120,000, cleaners on $60,000-plus. Turnover had always been low, so the payouts to long-serving workers were big. Phillips says many walked out the gate with a couple of hundred thousand dollars in redundancy pay and company superannuation. Some, who had been there for decades, got half a million.

It was a very different story for a group of Kawerau early childhood workers caught up in a restructure a year or so earlier. As for most workers in the modern era, there was no redundancy clause in their contracts to recognize their service or ease them through the transition. Even though they weren't his members, Phillips got involved in the scrap and squeezed a confidential settlement out of the owners.