Kawerau: Essity offers locked-out mill workers pay increase, union members to vote tomorrow

The Essity paper mill in Kawerau. Photo / Mead Norton

Locked-out Kawerau paper mill workers have been offered a pay increase recommended by the Employment Relations Authority after days of negotiations, their employer says.

The offer will be discussed by workers tomorrow morning and a vote will follow, the union representing them says.

Since August 9, 145 workers at the Essity mill in Kawerau have been locked out of their workplace without pay. Essity is one of the world's largest hygiene and health companies and its brands include Purex, Sorbent, Libra and Handee.

In a media statement today, Essity said after several days of negotiations, the Employment Relations Authority had recommended pay increases for an agreement between Essity and the paper mill's workers.

Essity has accepted the recommendations and has proposed an offer to the Pulp and Paper Workers' Union in line with those recommendations, the statement said.

Essity's general manager at Kawerau Peter Hockley said subject to the union and employees accepting the offer, Essity planned to resume production at the mill on September 15.

"It's now up to the union and employees to decide whether to accept the Employment Relations Authority's recommendations or not.

In his view: "Reaching an agreement is in everyone's best interests and allows work to return to normal at the mill."

Essity has withdrawn all legal claims against the Union, the statement said.

The Employment Relations Authority's recommendations for 2022 was a 5 per cent pay increase and a $4000 lump sum payment, for 2023 a 4.5 per cent increase and a $3000 lump sum and in 2024, a 4 per cent increase.

Under the authority's recommendations, the agreement will expire in July 2025.

Essity had previously said it was offering rises of 3 per cent per year plus a one-off cash payment in the first year.

The union wanted rises to match inflation, and said its position was based on analyst predictions of a 15 per cent total rise over three years.

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.

"Essity's sole focus has been on reaching an agreement that is fair but helps secure the long-term future of the Kawerau mill," today's statement said.

Economic pressure had seen one other major plant close over last year and another reduce jobs and pay rates to stay competitive. In the past 12 months, two other suppliers had left New Zealand because of cost pressures.

Essity said it had shown its commitment to the Kawerau mill by investing $130m in plant upgrades over recent years.

A Pulp and Paper Workers Union media statement said it received notice "via the media" that Essity had accepted the Employment Relations Authority's recommended pay offer, which followed several days of facilitated bargaining.

Union secretary Tane Phillips said members would discuss the deal tomorrow morning.

"Members will vote on the offer tomorrow morning and we will make a further statement following that meeting."