New order in sharemilking brings contract changes

A new sharemilking agreements order, with a minimum 21 per cent payout for lower-order sharemilkers, will take effect from June 1.

Sharemilkers and dairy farmer employers have been warned by Dairy Farmers of New Zealand chairman Charlie Pedersen that existing and new contracts might be affected by the new order.

The final order was now with the Government, which had assured the industry it would be gazetted by May 2 so there would be 28 days' notice before June 1.

Some changes have been disclosed, including limits on a farm owner's ability to withhold payments during a dispute, and the compulsory appointment of a conciliator for disputes not resolved within 10 working days.

The new order also establishes a minimum payment of 21 per cent of the milk price for the labour content of contracts for herds of 300 cows or less.

This will force farmers to choose between offering a sharemilking agreement, or, if they want to continue paying a worker less than the 21 per cent of a milk cheque, a job as a herd manager, which will be covered by employment legislation.

The new minimum conditions will apply to existing and new contracts.

The existing Order in Council document - the only one with any legal clout - has not been updated since 1990.

Traditionally, young couples started off working for wages, progressed to lower order sharemilking, where they might milk a farmer's herd for a small percentage of the earnings, and then built their own herd and milked it on someone else's land for a 50:50 share in the earnings.

But recently there has been a tendency for farm owners to put on lower order sharemilkers, which helped shrink the number of more lucrative 50:50 jobs.

Other industry commentators have reported a few farmers replacing farm managers' jobs with petty percentage sharemilking contracts, apparently in an effort to escape their responsibilities in occupational health and safety, employment contracts and ACC, because sharemilkers were deemed to be self-employed.

Employer and sharemilker representatives began discussion four years ago to negotiate changes to the document, but when it was about to be signed, in November 1998, the sharemilkers' executive decided not to sign.

Mr Pedersen said 10 delegates and one Northland representative were appointed at the respective sections' annual meetings to take responsibility for the order.

"The order contains some significant changes," Mr Pedersen said.

Industry participants should work through the new sections, rather than be surprised at June 1.

The new deal will give sharemilkers access to income streams other than the basic milk payment such as dividends and rebates.

- NZPA