Settlement fails to end confusion

Press, 15 April 1978, Page 14

Settlement fails to end confusion

By

OLIVER RIDDELL

in Wellington

Three weeks after a settlement was imposed by the Government in the meat industry dispute, some details of the settlement are as obscure today as they were then. Confusion persists in the freezing industry.

After the dispute between the Freezing Companies’ Association and the Meat Workers’ Union, the Government imposed its own settlement on the parties. Since then. conflicting statements from the employers. the union, and the Government have clouded the issue further. Today, it is still

not at all clear how much money is involved from either the Government or the freezing companies, when it is to be paid, over what period it is to be paid, and how it is to be paid.

Two points are at the heart of the problem: the interpretation of the regulations, and the period during which the Government will make payments.

The settlement is governed by the interpretation to be placed on the Economic Stabilisation (Slaughtering and Processing Charges) Regujations of November 22, 1977, and the amendment to them of March 29. 1978. The November regulations said that for a period of 12 months—until November 21, 1978—the freezing companies could not pass on as an extra cost to farmers any increase in wages and salaries beyond 7.5 per cent. This limit dictated the emp’oyers' negotiating stance. They stuck to pay rates they considered could be passed on; the union said its members would strike unless they obtained more. Then the Government added a contri-

bution to the extra wage bill and amended the November regulations. The amendment did two crucial things. First, it reduced the 12-month term of the November regulations so that any wage and salary increases negotiated after July 31 this year could be passed on to the farmers. Second, it revoked the expiry date of 12 months so that the 7.5 per cent restriction on the companies would apply to the terms of the imposed settlement indefinitely. The effect of these two aoparently contradictory changes that, when an award is negotiated in a few months for the next killing season, any rise may be passed on to the farmers. No restriction will apply to pay increases fixed later this year. But the effects of the imposed settlement must be borne by the companies indefinitely. Pay increases above 7.5 per cent agreed to last month must be borne by the companies. However, at any time, the Government could again step in and pass new or amending regulations, changing the circumstances in which payments are to be made. At present the Government is helping the companies by way of its subsidy. There is still no certainty about how long the Government will continue to pay its share. There is general agreement that the total annual cost of the imposed settlement will be about 59.2 M. The companies must pay 54.6 M of this for the year until March 30. 1979. which they cannot pass on. If the Government decides to meet half the total amount, and not just for the lemain-

der of this season but for the full 12 months, it too will pay $4.6M. The implication of the Prime Minister’s statement three weeks ago is that the Government will pull out after next July when a new award comes up for negotiation.

However much the Government decides to pay, payment will be made to the Freezing Companies’ Association so that it can increase payments to all its members’ employees, not just the members of the Meat Workers’ Union. If the Government does not pay for a full year, the companies must pay the balance of the $9.2M outstanding, and then continue to pay the full 59.2 M in future years as long as the November regulations remain in force.

The companies complain first about having this extra payment forced on them at all when they cannot recoup it, and second about the apparent intention of the Government to make this forced payment permanent. However, they feel the Government may not have intended it to be permanent, which is one reason for the delay in deciding how much is to be paid, when, and for how -long. All parties agree that the payments were due to begin on March 29. Then there has been the separate question over how payments should be made. Whatever method is used there will be variations between companies. Such variations are bound to be unfair to some at the expense of others. Discussions continued this week on the methods of payment that might be adopted, including ohe idea of a payment according to units of stock slaughtered.