Kinleith mill contractors out during job talks

By CHRIS DANIELS

Workers from global engineering contractor ABB are packing up their files and walking off the Kinleith pulp and paper mill site after an Employment Court ruling faulted Carter Holt Harvey's restructuring plans.

The court told Carter Holt on Friday that it could not contract out its mill maintenance or take any steps to dismiss employees for redundancy until it had fulfilled a suitable consultation process.

In March, Carter Holt, which is half-owned by the US forest products giant International Paper, announced it would lay off 390 of its 770 workforce, although 190 new jobs would be created by ABB that had been contracted to take on maintenance work.

Chief executive Chris Liddell has repeatedly said that changes at Kinleith are needed if it is to be internationally competitive and return its cost of capital.

In a test of the good faith bargaining provisions of the Employment Relations Act, Employment Court judge Graeme Colgan said that in purporting to consult about the restructuring of the mill's workforce, Carter Holt was found to have "acted other than in good faith" in several ways.

These included: beginning consultation too late in the implementation of its strategy; failing to provide information about the restructuring to unions as they requested; not accepting the employees' wishes for consultation to be with their unions; and failing to consult about whether it should restructure its maintenance work force.

The court action was launched by the Engineering, Printing and Manufacturing Union.

Brice Landman, chief executive of Carter Holt Harvey Kinleith, said the 20 or so ABB workers now at the mill site were packing up and leaving as a result of the court ruling.

"The judge has said we have to stop our proposal to outsource maintenance. He ruled we should have consulted earlier than we did, so in the next 28 days we have to go through the process to consult with our union."

Landman said there were three possible results of the court's decision, as Carter Holt still had to improve the performance of the mill.

"We could continue with ABB as was originally envisaged, or we may modify that in some way, or there may be some totally different proposal which the unions may propose which we find acceptable."

A letter of intent with ABB had been signed in late May, which outlined the way the companies would work together, with the intention of signing a contract.

"We were fairly close to concluding a commercial contract with ABB," Landman said.

"That's all been put on hold now. I guess in 28 days, if we were to go ahead with it in the original or modified form, we would have to sit down and go through another series of negotiations with them."

The $30 million in annual cost savings and productivity increases would take 18 months to two years to be realised.