Meticulous planning before Carter Holt Harvey announced mass layoffs at its Kinleith pulp and paper mill did not indicate deceit, the Employment Relations Authority has found.

Authority chief Alastair Dumbleton has rejected a claim by unionists that the company made up its mind to lay off almost 400 employees and contract out maintenance work before consulting them.

He has ruled against the Engineering, Printing and Manufacturing Union in finding that the company did not breach good faith requirements of the law, a finding that the union intends challenging in the Employment Court.

Preferred engineering contractor ABB hopes by the end of this month to start recruiting up to 190 staff for Kinleith, but union secretary Andrew Little said yesterday that the court had indicated it would be able to consider an appeal before then.

Meanwhile, mill workers had decided to hold out against joining an outside contractor.

Mr Dumbleton said it was only to be expected that such a large company as Carters would prepare meticulously before presenting proposals likely "to be received with alarm" by employees, their families, their communities, investors, the Government and society generally.

"That is not an indication that cunning or deceit has been exercised," he said.

Neither did he find that the layoff plans were developed as a response to a breakdown of pay talks, and he said a letter of intent given to ABB was not a concluded contract for it to take over the mill's maintenance.

Mr Dumbleton said a difficulty with the union's complaint was that most wage workers did not take part in any of 30 consultation meetings scheduled by the company after its announcement on March 27 of the likely redundancies.

It was then that the company disclosed an expected annual saving of $31 million from restructuring, saying it was unavoidable that many jobs would disappear, but that doing nothing to improve the mill's return on capital would be a worse option.

By contrast, Mr Dumbleton said, those on salaries did attend meetings, with the result that the company decided to retain some of the 60 or so it proposed to make redundant.

He said the union's resistance to the proposals was inevitable and predictable because of the overwhelming degree of change in store.

He reserved his decision on what he said were likely to be substantial legal costs.