Peter Reidy: Rail union has agreed to wage rise that favours the lowest paid

The national railway has negotiated an unusual kind of wage increase. Photo / File

COMMENT:

KiwiRail and the Rail and Maritime Transport Union have struck a pay deal designed to deliver the most to those who earn the least. The deal was negotiated over just a few hours and is a tangible result of a new partnership model over the past three years that has changed workplace relations at KiwiRail.

During wage negotiations this year the union proposed a flat rate increase instead of the usual annual percentage increase. This will see those on the lowest wage receiving the highest increase and those on higher wages lifting their colleagues up.

Full credit is due to the union and its members. It's an innovative and unusual proposal which once would have been unheard of in an industry as large as ours.

It's also a principled one. RMTU General Secretary Wayne Butson and his team spoke to their members and recognised the importance of closing the wage gap – of doing better for lower paid workers. KiwiRail has committed to front-loading the two-year increase at the beginning of year one, to make the biggest difference straight up.

It means our lowest paid staff will receive a 6.9 per cent pay increase this year well above the likely 2.5 per cent they may have received. Every worker who voted for this proposal, and those who designed it, is to be commended.

All of this would not have been possible – certainly not in the timeframe it was negotiated – just a few years ago. The annual wage round was marked by weeks of sometimes adversarial negotiation. There was a room full of people and often, for days at a time, little was achieved.

I have no doubt this year's remarkable result is in part due to the new era of partnership we have with the RMTU, ushered in by our High Performance, High Engagement programme of work.

HPHE is about leadership from the bottom up. It puts managers and workers on an even footing. It demands that we really hear each other's views, we find common ground and together we devise solutions to business issues.

It is not a quick fix. Nor is it easy. But HPHE is about leadership learning to let go.

These are not easy times for workplaces negotiating pay. We have had strikes from the public sector not seen for many years and differing expectations on both sides. Finding common ground can be difficult in this environment.

What our work with HPHE has taught us is real co-operation, and it creates a constructive culture with better results for everyone involved. It's about better efficiency and productivity, and sharing those gains equitably.

Since KiwiRail adopted the approach we have seen staff become more empowered and engaged, decision making become more durable, and tangible productivity improvements.

For example, we have seen improvements in workplace Health and Safety, and by involving work teams in redesigning processes and equipment we are seeing faster turnaround times for routine maintenance.

And the interest in HPHE continues to grow in New Zealand, with the idea recently being mooted in relation to improving workplace productivity at the Government's "Future of Work" forum.

The positive impact of HPHE is clear in the day-to-day work of KiwiRail where improvements in our workplace health and safety, our maintenance improvements and the empowerment of our people can clearly be seen. But it has also enabled a stronger relationship with the RMTU, which has been reflected at the negotiating table.

There will always be differences between managers, workers and unions which result from their different functions. The critical need is a firm commitment to working through differences together, and delivering results that benefit all.

• Peter Reidy is chief executive of KiwiRail.