NZ can't jettison Aussies
By Steve Creedy
January 24, 2003
AIR New Zealand remains legally and morally bound to meet the entitlements of its Australian staff and could not argue employees could rely on a government safety net if the airline failed, the federal Government said this week.
A spokesman for Transport Minister John Anderson said nothing had changed the airline's obligations, despite its refusal to agree to a scheme to the secure the entitlements of about 90 Australian-based staff.
The spokesman said the airline could not argue employees could rely on the federal Government's General Employee Entitlements and Redundancy Scheme.
"They are legally and morally obliged to pay their workers' entitlements," the spokesman said.
"Having said that, while we understand the union's concern about Air New Zealand, which is a company that has form on this issue, the fact is that failure to meet the union demand to set up some sort of security system does not represent a failure by them to meet their workers' entitlements."
The Government comments came as Air New Zealand reacted strongly to the public release of a letter refusing union demands in contract negotiations for a system securing entitlements in Australia.
The Australian Services Union proposed three alternatives – a trust fund scheme, an insurance scheme and a charge over assets – to secure Air New Zealand workers' entitlements "given the history and the precedent set by Air New Zealand and its former subsidiary, Ansett".
In its letter, Air New Zealand said it did not see why it should incur the additional costs of securing Australian workers' entitlements, given they had statutory protection and access to safety net schemes such as GEERS.
The airline argued the proposals were unprecedented in the industry, that a trust involved complex legal and taxation issues while a charge over assets had significant implications for existing financing arrangements.
A follow-up letter sent to staff yesterday criticised the failure to mention an improved offer in the contract negotiations or an offer of regular union access to audited accounts to reassure officials of the airline's solvency.
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Senior vice-president of Australian sales and distribution Paul Donovan said later that Air New Zealand would not run away from its responsibilities but the union's options were not palatable, "as they wouldn't be with any other corporation in Australia".
"We have to put to the union that they can have the same (deal) as is normal practice, that is, they can look at our books to check we're in good shape," Mr Donovan said.
But ASU assistant national secretary Linda White said the bargaining offer mentioned in the latest letter had not yet been put to the union. Ms White said the airline had told her it would not put the offer until the union withdrew the entitlements claim, a view Mr Donovan rejected.
She warned the issue was likely to culminate in industrial action by Australian staff.