Lyttelton Port rejects pay demands

Earthquake recovery Minister Gerry Brownlee is using special powers to order a fast track to the rebuilding of Lyttelton Port.

Peter Davie, chief executive of Lyttelton Port Co, says the South Island's biggest port operator has rejected a demand for a 4 percent pay rise from logistics officers and will use managers to cover their work during a strike this week.

The company's 11 logistics officers, who are responsible for planning the movement of freight and cargo across the wharves, will strike from 11 pm on Friday until 7 am Saturday morning after talks broke down over the pay demand, the Rail and Maritime Transport Union said. The company had offered a 2.85 percent increase over 12 months.

"The work that those people do will be covered by management staff so there won't be any disruption to our shipping services as a result of it," Davie told BusinessDesk. "It's not our major workforce, they're a group that does a specialist job for us."

"The 4 per cent they're asking for is well above the rate of inflation and what other people are getting, so we don't think it's warranted given that they're not prepared to have any discussions in the negotiations around productivity."

While the union said it is "happy" to discuss productivity, Davie says by the labour body won't discuss it until agreement has been reached on the pay rise.

The port's shares fell 0.6 percent to $3.17 on the NZX and have gained 39 percent in the past year. The stock is tightly held with Christchurch City Holdings, the investment arm of the council, owning about 80 percent of the company, while Port Otago holds 15 percent.

RMTU said port management didn't want to set a precedent for negotiations for a wider collective agreement which covers over 400 port workers. Negotiations have been ongoing since before Christmas with the union arguing the increase would only cost the company $10,000 and it has set a precedent by giving Davie himself a pay rise.

Davie's remuneration rose 2.5 percent last financial year to $1.05 million, according to the port's annual report. He says his own pay is "irrelevant" to the industrial dispute.

"If they want to ask what workers around the country have gained, the average wage increase is not 4 percent, it's a lot lower than that, I can guarantee them that," Davie said. "I think the union needs to start being realistic in their demands."

"There hasn't been any negotiation, it's just been a demand - we want this or else. We don't think that's a negotiation quite frankly," he said.

In February the port resumed dividend payments for the first time since they were suspended in 2010 following damage sustained in the Canterbury earthquakes. The company had a $438.3 million settlement with Vero, NZI and QBE, of which it recognised $357.6 million in insurance income in the six months ended Dec. 31, 2013.