Payouts delayed in contract wrangle

A contract dispute means former drivers of Smith and Davies New Zealand will have to wait longer to receive redundancy compensation.

A contract dispute means former Whangarei-based drivers of Smith and Davies New Zealand will have to wait longer to receive redundancy compensation they may be entitled to.

All 120 staff of Smith and Davies NZ in Whangarei, including 20 truck drivers, lost their jobs from March 16 after the assets of its parent company Kiwi Forestry International were seized when it ran into financial difficulty.

First Union, which represents 17 truck drivers, has slammed the company for an alleged breach of a collective employment agreement that required Smith and Davies NZ to give affected workers two weeks notice and one month's redundancy compensation.

The union wrote to Smith and Davies NZ on April 10 to complain.

"On 4th of May they replied and rejected our claim about the breach and gave their views on why the workers were not entitled to redundancy pay," union general secretary Robert Reid said.

He said both parties would now go to mediation before the Employment Relations Authority intervened if the case got to that stage.

"The longer negotiations drag, the more difficult things become because if the company goes into liquidation or receivership, our members will have to queue up in order to claim their entitlements."

Mr Reid said the company's attitude towards its redundant workers was disappointing.

He has called on regulators such as the Companies Office and the Ministry of Business to step in and hold the directors of Smith and Davies and its subsidiaries to account.

"No one appears to know what is happening. The Companies Office has refused to investigate alleged irregularities without an official complaint while the issue does not even appear to be on the radar of the Ministry of Business, Innovation and Employment".

"If workers do something wrong they are liable for warnings and even dismissal. It seems that companies can flout the Companies Act, the Employment Act and other acts with impunity. Why will no government agency investigate allegations the company is trading while insolvent?" Mr Reid asked.

"Regulators need to step in and regulate. If they refuse then politicians need to step up and clarify the law".

Smith and Davies' directors Andrew Chalmers and Zane Cleaver did not respond to questions by edition time.