KEY POINTS:
The pay difference between Air New Zealand's Shanghai and New Zealand-based crews may be unfair, but it is not illegal, a Department of Labour report says.
The report, issued to Minister of Labour Trevor Mallard yesterday, said: "While having different arrangements for different crew members on the same plane may be viewed as raising issues of fairness, the differing arrangements are not illegal ... The differing arrangements reflect a business decision generally available to Air New Zealand, as it would be to any other airline."
The Weekend Herald revealed the airline's Shanghai-based crew were paid an annual base salary of $6240 - a quarter of their New Zealand colleagues' starting base pay of $25,462. The Herald report did not say, or suggest, Air NZ had broken any laws.
The airline, which said the total annual employment cost for the Shanghai staff was $46,000 each, said yesterday it disputes reports that the Chinese crew receive a meal allowance of $55 per day.
The Herald had reported that the Chinese crew had their meals tied to dining at two Auckland restaurants and received only $55 in cash, while other Air NZ crew were paid their full daily away allowance of $175 in cash.
The legal minimum wage is $12 an hour but the Labour department report said it was not applicable to Air NZ as "it would appear Chinese employment law applied to the agreement between Air New Zealand and the Chinese Air crew".
Mr Mallard said the report's findings came as "no great surprise", and while he acknowledged that there might be a feeling of unfairness among the crews, he said: "The same thing occurs, for example, on flights out of London where the London-based crew are paid a lot more than the New Zealand-based employees."
Air NZ maintains that it is not the employer of the Chinese crew. They are employees of a Chinese Government organisation, Foreign Aviation Service Corporation.
However, the report said:
"There are a number of ways that documentation purportedly related to this employment relationship is confusing and may or may not reflect the real nature of the employment relationship."
Examples included the issuing of payslips on Air New Zealand letterhead, the airline commenting on pay negotiations of the crew and the airline's staff filling immigration forms for the Chinese crew.
But the report said the documents did not alter the real nature of the employment relationship. The Department of Labour, which oversees immigration, explained the Chinese crew were issued with New Zealand work visas to meet Chinese requirements.
"Until New Zealand entered into a reciprocal visa-free arrangement with China, the Chinese Government required the Chinese air crew to hold a New Zealand visa before travelling to New Zealand. Visas were granted accordingly to facilitate the travel for Chinese air crew to New Zealand."
Air New Zealand said in a statement yesterday that it welcomed the report. The airline's group general manager, Ed Sims, said: "The report holds no surprises for us and clearly shows that criticism of the airline on these matters has been unfounded."
However, in a statement last night the Department of Labour corrected "an assertion" in a media release from Air New Zealand on the issue.
The statement was in response to a release from the airline that stated that the department had found that Chinese law applied to the agreement between Air New Zealand and the Chinese cabin crew.
"What we said in our briefing to Labour Minister Trevor Mallard was that "it would appear that Chinese employment law applied", workplace deputy secretary Andrew Annakin said.
"This is an important point of difference, as the department cannot definitively determine what employment law applies in a particular factual situation, particularly outside New Zealand."
