Whakatāne Mill sale: Staff reach agreement with potential new employer

Whakatane Mill. Photo / File

Whakatane Mill staff have reached an agreement in principle with their potential new employer and are hopeful the sale of the mill will be finalised soon too.

First Union representative Jared Abbott said staff completed their processes with the potential purchaser on Monday and have agreed to new terms of employment.

He said now staff are just waiting for the potential purchaser, a consortium led by Dr Dermot Smurfit, a European investor, to finalise its agreement with the mill's current Swiss owner SIG.

"Our understanding is things are looking really positive," Abbott said.

If the mill is sold, staff have agreed to a pay reduction, but Abbot said this may be offset by the payment of a retainer which would see staff staying with the mill get 50 per cent of their redundancy this year, 25 per cent in 2022 and another 25 per cent in 2023.

"For some of the newer staff, this would be less favourable and for the longer serving staff it would be more favourable," he said.

"Newer staff's redundancy pay-outs are considerably less."

The site hasn't been profitable for some time and Abbott said as a result staff's annual wage increases have been "quite small" of around 1 per cent.

But the payment of this retainer fee for the next three years will see staff getting significantly more pay than they would usually.

"We would hope that in three years' time the mill would be making more profit and we can address some of those terms and conditions that have been lost."

Abbott said there have been mixed feelings among staff since the agreement was reached.

"These kinds of things are always quite difficult, and people haven't got experience with the potential new buyers so there's always going to be a little bit of unease.

"But overall, there's some relief that it looks like these 200 jobs will be kept in the community."

While staff have reached this agreement in principle, some have chosen to take redundancy rather than stay on.

Abbott said there is a potential that some of these people may be replaced with staff from Kawerau's Norske Skog mill which may be closing.

"If the purchase does go ahead, we are really excited to work with the consortium to ensure the business is a success."

Local Labour MP Tamati Coffey said: "We've been out there, and we've had conversations with the workers, union reps and mill management and my primary focus has always been, what about the people."

Mill owners SIG have been approached for comment.