The Essity mill in Kawerau is a local manufacturer of toilet paper. Photo / Mead Norton
The Essity mill in Kawerau is a local manufacturer of toilet paper. Photo / Mead Norton
The union representing striking Kawerau mill workers is vowing to fight employer Essity after accusing the company of threatening legal action involving more than half a million dollars in damages.
The Pulp and Paper Workers Union claims the company is seeking to make 62 individual employees "jointly and severally liable" with the union for $542,852 of damages plus costs.
The escalation comes as 145 members of have been locked out of the Kawerau mill for the past three weeks.
The union said Essity's legal threats were in relation to technicalities over a strike notice issued in July to push for a pay increase to match the rising cost of living.
Essity's Kawerau general manager Peter Hockley said the legal case was now under way, with the company challenging the legality of some union strikes but the case was likely to be "weeks or even months away".
The union had until September 8 to respond to the Employment Relations Authority, he said.
"We believe that we did nothing wrong, so we are going to defend it."
In a written statement, he described the threat as "an absolute punch in the guts" for a group of workers who had already been locked out of their jobs without pay.
"We are not going to be intimidated by expensive lawyers or bully-boy threats. All we are asking for is for our pay to keep up with inflation. Essity is a large and very profitable company that can easily afford it."
Union delegate Rik Tauroa (far right) alongside Simon Goddard and Suzy Kotuhi. Photo / Mead Norton
Rik Tauroa, who has been working at the mill for 19 years, said he was one of 62 workers on the receiving end of legal threats.
The union delegate said it was a "shock" staff were being threatened with hundreds of thousands in damages - which he said broke down to roughly $8000 per person.
The group had not been paid for five weeks as they had been on strike for two weeks prior to the lockout, he said.
"We have been off work for five weeks now - that's a lot of money we have lost. To think we are going to pay more on top of that.
"For our newer members, who haven't been in the mill that long, they have got compounding problems anyway. They can't pay their mortgage, they might be the only income earner. It's a lot of stress alright."
Meanwhile, the Maritime Union of New Zealand has issued a statement standing in support of locked-out workers, with national secretary Craig Harrison saying maritime workers were contributing financially to affected staff.
It would ramp up support if the employer continued "to try to starve the workers into submission".
NZME asked Essity why it was taking legal action against 62 employees and why not all 145, as well as what the technicalities over the strike notice issued in July were.
In a written response, Essity said it would meet the union members on Thursday and Friday this week "to try to find a way through the current impasse".
"We want to find a way to get us all back to work and hope facilitation with the Employment Relations Authority will help find a way forward," said Hockley.
He said if the company and union could not find common ground it would "undermine the future for manufacturing at the mill and the 200 local jobs it creates".
"We're keen to find a solution, but it can't be at any cost."
On the legal case, he said the company had "challenged the legality of some union strikes".
"But that is likely to be weeks or even months away. Our focus is the talks later this week and trying to find a way forward so we can all get back to work and protect jobs for the future."
The statement said Essity locked out striking workers after 19 days of industrial action and its offer was "very close" to the union's claim. But the union's refusal to budge had completely blocked progress, it said.
Essity's offer over three years was 14.7 per cent, with a pay rise of 3 per cent plus a lump sum payment of $4500 equal to another 5.4 per cent to deal with current inflation pressures in 2022 and a 3 per cent pay rise in 2023 and 2024.
"The union wants 7 per cent on pay rates going forward – it came to the table with that claim in May and hasn't budged since, despite several increases in our offer," Hockley said.
"There's no way that increase on base rates is sustainable including when inflation starts falling as everyone predicts.
"It also ignores the enormous increase in production costs - energy costs have doubled, shipping costs are up five-fold as well as pulp and other materials at record highs. We can't just keep adding costs – something has to give."
Hockley said pay rates at the plant had exceeded inflation by a total of 10 per cent since 2017 and the average earnings of union employees at the Kawerau plant was $120,000 per year, including overtime.
"Our people are good workers, and they are well paid for that at rates well above most manufacturing jobs.
"Economic pressure has seen one other major plant close over last year and another reduce its rates of pay to remain competitive. Kawerau is the last remaining paper production and manufacturing plant in the country supplying nearly 50 per cent of the market – the rest is made from imported paper and Essity's production could go the same way if the mill was forced to close. In the last 12 months, we have also seen two of our major competitors exit New Zealand because of cost pressures.
"Essity has shown its commitment to the Kawerau mill by investing $130m in plant upgrades over recent years – the uncertainty of the strike action has put on hold a further investment of $15m to upgrade our paper machines and significantly reduce the mill's carbon emissions."
Essity is a Swedish-based multinational company that made $1.8 billion of profit globally last year. Its brands in New Zealand include Purex, Sorbent, Libra and Handee.
