Prime Minister Helen Clark yesterday set out the Government's expectations of Air New Zealand management in its dealings with unions but those expectations fell well short of what workers' advocates were hoping for.
The Government expected Air New Zealand to engage with unions in accordance with collective agreement procedures, Helen
Clark said.
But she also expressed sympathy with the financial pressures facing full-service airlines in developed countries.
"This is a tough industry to be in," she said.
Union leaders met Helen Clark at the Labour Party conference in Rotorua at the weekend to convey their concern at the proposed contracting out of more services.
The most recent proposal affects 1700 counter and baggage-handling crew. The company had said it would prefer to keep their work in-house.
Leaders of the Engineering, Printing and Manufacturing Union and Food and the Service Workers Union called on the Government, as the 80 per cent owner of the publicly listed airline, to spell out its expectations to prevent the outsourcing of contracts to overseas companies.
They also called on the Government to buy the shares in the airline it doesn't already own in order to exercise more control over it.
However, Helen Clark confined her expectations to the process of consultation rather than the content of negotiations between management and unions.
She said at her post-Cabinet press conference that, because it was a publicly listed company, the Government had always been "very proper" about its role in Air New Zealand.
"Clearly as a Government we have expectations about working through collective agreement procedures," she said.
Air New Zealand had acted "in a good spirit" over its proposal to shift engineering work to China and the result had been "as good an outcome as you could have hoped for", she said.
About 200 jobs were lost, but 300 were saved.
Helen Clark said that, since the Government bought back the former state-owned company "in its bleakest hours in late 2001, it has made a staggering recovery".
"It has actually done extremely well, but it is always going to have to look to costs, and if it can work in a way that is productive and engages the unions in discussion about how it goes ahead, that has got to be a positive process."
The fact the company had expressed a wish to keep the counter- and baggage staff in-house "should encourage the unions to work hard at those negotiations".
