David Fisher is a senior reporter for the NZ Herald.

Affco: War of the works

A cleaner caught on a meat hook in a terrible workplace accident has lifted the lid on simmering tensions at the country's largest meat works. David Fisher investigates the bitter power struggle between the union and the wealthy family who own the company.

The T-shirt carries the slogan: "Jobs that count".

White text on a bright green T-shirt, it's a walking billboard for the NZ Meat Workers and Related Trades Union.

But it's banned at Affco NZ, which employs many union members among its 3600 staff. Management perceives it as threatening.

On the face of it, it's a minor scrap. But it's one small illustration of the animosity that has grown since Talley's Group took over Affco in 2010 - animosity that is spilling over into all-out war.

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No quarter is given in this conflict between a company owned by one of New Zealand's wealthiest families and one of the country's oldest, and historically powerful, unions.

Union numbers at Affco-owned plants have plummeted, driving members underground even as the company has expanded its workforce and increased production.

"That was a process of intimidation," says Rowan Ogg of the T-shirts.

Ogg, one-time general manager and currently a director of Affco NZ, is in a unique position to judge.

"I probably haven't admitted this all that often, but I used to be a paid-up union member," he says.

Intimidation wasn't unusual in those circles. Raise a voice against the movement and the panels on your car get dented. "On one occasion, I got shot in the arse with a slug gun," he says. "When you get a bunch of people in a row confronting you wearing the same uniform, you get a bit concerned.


"What we wanted to do was to take all that away from the workforce and say, we're here together, we have one objective - we want to prolong our employment and we want to earn the most we can."

Affco staff tell of T-shirt confrontations

Affco staff tell of T-shirt confrontations at the turnstile they attempt to pass through at the meat works' gates. Managers insist those wearing union T-shirts get them off before entering. But this is the war - and no one is giving an inch.

On one side, the union would have it, there is Sir Peter Talley, oligarch of Motueka, patriarch of one of the country's richest families and a guiding figure in the Talley group of companies. On the other side, meatworkers who make up about a third of the company's workforce.

As it stands, the war is not going well for either side. Affco has lost ground in the courts but the union's casualties are high.

The union's national secretary, Graham Cooke, has the countenance of a battle-weary veteran. It all changed when Affco was bought by Talley's Group at the end of 2010, he says. "The managers went off to some brainwashing seminar and all came back hating unions."

At the time, the union had almost complete coverage of Affco's six plants and its three subsidiaries. It meant workers - about 2800 people - were employed under a collective contract.

Affco began offering workers independent contracts - negotiated with the company and not through the union. By 2012, membership had slipped to 80 per cent.

Sir Peter Talley. Photo / Supplied
Sir Peter Talley. Photo / Supplied

Workers locked out of meat plants

And that's when it got serious. Disputes over contract bargaining saw Affco lock about 750 workers out of meat plants at Horotiu, outside Hamilton, Whanganui, Moerewa in Northland and Wairoa in Hawkes Bay.

An Employment Relations Authority ruling in May 2012 noted "growing tensions between the company and the union over the previous 18 months". In evidence to the authority, Affco said it "locked out sufficient union members so as to place pressure on the union" to consider the company's position - to "drive forward its negotiating position".

The union had a different view, saying Affco "initiated the lockout to pressure union members to leave the union and enter into individual employment agreements with the company".

For 12 weeks, workers picketed. In that time, the plants continued to run as workers on independent contracts walked past those on the picket line. Critically, Affco found it could lock out out its union staff and carry on.

There was a lull in the conflict. A collective contract was agreed. Iwi leaders brought the two sides together (80 per cent of the work force is Maori) and an agreement was signed, covering union staff through to December 21, 2013.

There had been much talk about the change in ownership and the influence it might have had on Affco's stance towards the union. The question often arises because of Sir Peter's clearly expressed views on unions in his April 2014 submission to Parliament on changes to health and safety laws.

He blamed the union movement for influencing the bill. "The glory days are over, for most unions. Today in the private sector, labour unions represent only 20 per cent of the total New Zealand workforce and their membership continues to dwindle. Why? A basic premise for business also applies to the unions: if you're filling a need, you'll do well. If you're not filling a need, you'll die."

The managers went off to some brainwashing seminar and all came back hating unions.
Graham Cooke, Meatworkers union national secretary

Listing legislation from the Employment Relations Act to the Human Rights Act, he wrote: "It is wrong that company managers have to spend so much of their valuable executive times protecting their business from the relentless attacks by the 'over-powered' New Zealand unions."

If this is a war, Sir Peter is no ordinary general.

Talley's Group is a success story by many measures - it grew out of a fishing business established by Ivan Talijancich in 1936 at the age of 28 in Port Motueka. The family company has expanded to grow and harvest the most sought-after produce New Zealand can grow.

Dairy, fish, meat and vegetables - Aotearoa's bounty is embraced by Talley's like no other New Zealand company. The product of that can be found not only in New Zealand supermarkets but across the world.

All this, along with the fate and fortunes of more than 7000 staff, fleets of ships and endless hectares of arable land, still comes back to head office in Motueka. When those who know Sir Peter speak of his loyalty it seems a simile for the family's connection to Motueka.

"One man makes the decisions"

Sir Peter didn't respond to requests for an interview. Instead, his son Andrew Talley emailed: "As a private company we prefer not to talk publicly about the business or family interests."

And that's how they like it. One fishing industry source who knows Sir Peter, said: "You're venturing into the realm of companies that play things very close to their chests."

Sir Peter and his brother Michael Talley have been at the heart of the business for decades, and remain so. Andrew Talley is the new generation - a businessman whose reputation has grown to fill the space that will one day be left.

The Motueka mansion is owned by Sir Peter Talley. Photo / Tim Cuff
The Motueka mansion is owned by Sir Peter Talley. Photo / Tim Cuff

But Sir Peter is the single person in Talley's Group who calls the shots.

"The big thing about the Talleys' group is that it's still run by one man," says one source. "One man makes the decisions. While he has a pool of advisers who work for him he makes the decisions. It's so old-fashioned in that regard, he still signs the cheques. Literally." Talley's Group bought into Affco NZ in the early 2000s, a small stake and then more through the decade. In 2010, going by the share price at the time, it paid $88 million to own the $1 billion turnover company outright. On shares at the time, it was worth $187 million.

The company likes to deal direct with staff, the source said, which set the scene for conflict at Affco.

Workers who deal direct with the company will "get better returns and be looked after better than they would with the union", he says.

Company benefits, including the Talley's health scheme, are better than alternatives, says the source, because Sir Peter believes in fair pay for hard work and looking after your people.

"He's very fair. He's a very astute businessman. Very strong family values where you might work your people hard but you don't work them to death and you make sure they get a reasonable lifestyle."

A basic premise for business also applies to the unions: if you're filling a need, you'll do well. If you're not filling a need, you'll die.
Sir Peter Talley in an April 2014 submission to Parliament on changes to health and safety laws

And he baulks at resistance, says the source. "Sheer principle" dictates he push back.

"Because he can. That's what people have to understand. You're not dealing with a corporate boardroom. Peter? He's not accountable to anyone other than himself. He can afford to do that and, let's face it, he's not a poor man. He couldn't spend his wealth in his lifetime but that's not what it's all about.

"It's the old family values - to build an empire so it can carry on."

If affco wants to present as an efficient and lean business, its headquarters north of Hamilton speak volumes. It left Auckland a decade ago and set up in the offices of the Horotiu meat plant.

In the boardroom, chairman Sam Lewis, director Ogg and general manager Andy Leonard answer every question - except those that might give competitors a commercial edge.

The position the company leaders put is this: the company needs to be unified in purpose to achieve the best results it can in a highly competitive industry. If it does, then the rewards are there for all - more stock processed, higher profits, better pay.

Ogg's claim is that the union has negotiated different contracts at competing companies.

"We've got different philosophies, really. Our objective is to look after our company and our employees. And you don't look after your employees by binding yourself to an agreement, which is actually worse than your competitors', especially when they've been negotiated by the same union. That really is the crux of the issue.

AFFCO protest. Photo / George Novak
AFFCO protest. Photo / George Novak

"It's like sending us to a gunfight with a knife when we go out to buy livestock. It's about our ability to buy livestock, to prolong our season and give our guys better hours. By doing that, we help ourselves as well."

He has no problem with the union, he says. "We will work with anyone. Our issue is to get an agreement we can work with competitively and protect both the company and the employees. One won't work without the other."

Like Sir Peter, Ogg says the union's role has been usurped by legislation. Lewis, too: "Employment rights are now safeguarded by legislation now, not union strength. There's a lot more protection for individual employment rights."

Lewis, asked if the union's fight is for its own survival, agrees. "That's a personal view," he adds.

A new front in the conflict opened last winter, as the meat-working season was due to start.

The collective contract had expired and the union and Affco were negotiating a new agreement. The union sought no wage increase and a continuation of the earlier, agreed contract. Affco, though, wanted to remove the "seniority" clause that gave experienced workers first shot at jobs in a new season.

Then Affco held an induction day for people wanting to work the new season.

At the meeting, would-be workers were given Independent Employment Agreements and an information sheet saying anyone wanting to work for the company needed to sign the contracts before starting.

The union was furious, saying it considered bargaining was still under way for a collective agreement. In Wairoa, about 160 union members refused the IEAs and waited on the courts for justice. They saw others in the town - sometimes in their families - in jobs they needed and had, until that season, worked in for years.

The union took Affco to the Employment Court. During the hearings, Chief Judge Graeme Colgan described the relationship between parties as "dysfunctional and apparently deteriorating".

When the court ruled in March, the judgment was overwhelmingly against Affco. First, it ruled that the workers were in continuous employment, for all they worked in a seasonal industry. The ruling turned 24 years of law on its head, based largely on patterns of work changing and the meat workers' season extending to 10 months of the year.

Employment rights are now safeguarded by legislation now, not union strength. There's a lot more protection for individual employment rights.
Rowan Ogg, Affco director

Then, because the workers were found to have been employed at the time the IEAs were foist upon them, the court ruled that they were effectively subject to an unlawful lockout from their place of work.

Finally, Affco was found to breached its legal duty of good faith by directly approaching workers already involved in collective negotiations - an attempt to "short-circuit collective bargaining".

The ruling handed the union a tremendous victory - but Affco has appealed. Win or lose, the eight months was enough to rock the union and its members. Union boss Cooke reckons membership has fallen from 80 per cent at the beginning of 2012 to about 30 per cent now.

The consequence is marked. A union's ability to meet employers on a level footing comes from its representation of a workforce. A union with an invisible workforce has to find a different path.

There is court - the union has filed repeatedly on a range of issues in the past 18 months. There are also international relationships. The International Union of Foodworkers has asked affiliate members to show "solidarity" with Affco staff, saying "Talley's Group has consistently sought to restrict and, wherever it can, eliminate union representation within its group of companies". In the month that followed, the bright green of the union T-shirts was seen in protest actions in a host of countries.

The battlefield has been exchanged for guerilla warfare, attacking supply lines. During last year's lockout, NZ Central Trade Union vice-president Syd Keepa called on Maori farmers and iwi farming interests to withhold stock from Affco.

Abroad, customers of Affco have been targeted - large chains such as Marks & Spencer in Britain on the receiving end of questions about ethical trading practices.

For Cooke, this is the fight which counts. If the union folds on Affco - which consumes most of the union's time - then the rest of the industry will follow the company's lead.

"We're in this industry for the long haul," he says, "and I don't think Sir Peter realises that."

Is Affco becoming increasingly unsafe?

That's the claim from the NZ Meat Workers and Related Trades Union as its membership at the company's meat works drops. It was raised again this week when Affco was fined $30,000 over the case of Jason Matahiki, an Affco cleaner whose head was penetrated by a meat hook.


Affco rejects the claim utterly and has data it claims shows a trend towards a safer workplace, with the number of accidents falling when put against the increased numbers of staff working.

The Herald obtained ACC and Worksafe NZ figures on accidents at Affco plants through the Official Information Act. The figures appear to show a trend towards more injuries at Affco plants. ACC figures alone show there are more claims being lodged and accepted by it and Affco's private insurer than in previous years.

The number of people being paid claims in 2013 - under both systems - was 929 for a cost of $1,590,704. In 2015, the number had risen to 1022 people and a cost of $1,706,957. Over the same period, the number of new claims accepted for compensation went from 637 in 2013 to 739 in 2015.

The increase can be narrowed down, using ACC figures, to two areas. Soft tissue injuries - bruising - went from 464 claims to 562 claims while lacerations and punctures increased from 198 claims to 275 claims. The Bay of Plenty - where Mr Matahiki suffered a meat hook through his head - shows the biggest jump in claims, going from 116 made in 2013 to 190 in 2015. There are similar increases at South Pacific Meats, also Talley owned.

Worksafe figures also appear to show Affco bucking the trend. The number of non-severe injuries has risen 6 per cent while serious injuries is about the same level.

But this is during a period when injuries at other "big five" meat plants have fallen. Silver Fern Farms - which employs 7000 people - saw its non-severe injuries fall 48 per cent while severe injuries fell by 61 per cent.

Affco's argument over increased work is matched by figures obtained by the Herald showing consistent increases in stock processed through the plant since the first full season the company was owned by Talley's Group.

Over that same time period, says Affco general manager Andy Leonard, staff numbers have grown from about 2800 to 3600. Affco director Rowan Ogg is blunt on claims of a link between accidents and individual contracts: "I think it's delusional."

- NZ Herald

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