Retrogressive Progressive:
TNC Locks Out Distribution Workers, Families
Without Pay For 28 Days

- by Joe Hendren

Joe Hendren is a CAFCA committee member and the Researcher for the National Distribution Union. His was a baptism of fire, as his very first day on the job was the first day of this dispute, one of the biggest in recent NZ history. Ed.

In late August 2006 Progressive Enterprises locked its supermarket distribution centre workers out of their jobs, creating one of the highest profile industrial disputes in New Zealand in recent memory. Progressive Enterprises is 100% owned by Woolworths Australia, a company which reported a profit of $A1.01 billion, a 24.3% increase on the previous year. The then boss of Woolworths Australia, Roger Corbett, had to make do with a salary of $A8.5 million a year, earning more in a day than the average full time checkout operator earns in a year.

Low income workers struggled to survive 28 long days without pay, while their employer ran a high budget public relations campaign to break their resolve and force them back to work on the employer's terms. The workers and their unions, the National Distribution Union (NDU) and the Engineering Printing and Manufacturing Union (EPMU) staged a fightback over a key principle – the right of workers to bargain collectively for a collective agreement. If a multimillion dollar transnational corporation (TNC) like Woolworths Australia/Progressive had succeeded in using starvation to bully its workers into submission, it would have become more difficult for all New Zealand workers to negotiate collective agreements. Thanks to the generous and active support of a wide range of New Zealanders the unions succeeded and Progressive failed. The workers retained their unity to gain one of their key demands – equal pay for equal work.

Background To The Dispute

In 2002 Progressive Enterprises took over Woolworths NZ. The following year Progressive closed the Auckland and Christchurch Woolworths distribution centres (DCs) and rehired the workers on lower pay and worse conditions. In Palmerston North Progressive was unable to play this dirty trick, as it could not find another location for a distribution centre in Palmerston North, therefore the company could not legally rehire these workers on lower rates. While this was a reprieve for Progressive's Manawatu workers, the closure of the Auckland and Christchurch DCs bought to an end the Woolworths National Collective Agreement that had previously covered all three sites.

On September 8 th, 2005 Progressive Enterprises signed a document pledging to make “every endeavour to develop a Combined Distribution Centre Collective Agreement covering the Mangere, Palmerston North and South Island Distribution Centres” as part of a working party with the NDU and the EPMU. They also agreed that an independent facilitator be appointed if they were unable to reach agreement. Later in 2005, Progressive Enterprises was bought by Woolworths Australia.

At the start of the 2006 bargaining, the company initiated a drive for individual site agreements while the unions made a claim for a national collective agreement covering Mangere, Palmerston North and Christchurch. No progress was made in two days of bargaining with Progressive only offering a 3% pay increase. Faced with a company that had gone back on its word, workers voted for a 48 hour strike, work to rule and ongoing overtime ban. As the sun rose on Friday August 25 th, supply trucks were being turned away from Progressive distribution centres in Mangere, Palmerston North and Christchurch.

Progressive management retaliated by issuing suspension notices to its distribution workers on Friday and Saturday demanding an unconditional return to work and no overtime ban. Complete submission in other words. In response, Auckland distribution workers voted to extend their strike by another 24 hours. As Christchurch and Palmerston workers arrived at work on Sunday they also voted to extend the strike and refuse to return to work “unconditionally”. On Monday Progressive raised the stakes once again locking the workers out for an unlimited period unless they gave up their claim for a national collective agreement. This means that the company was not even prepared to sit down and talk about the possibility of a national collective, despite the fact they agreed to exactly that less than a year before.

Locked Out

The same day Progressive locked their workers out of their jobs, the company launched a massive public relations offensive, placing full page colour advertisements in all the major newspapers. These were headed in large type: “Supermarkets remain open despite strike action: Union demands threaten livelihoods” in an attempt to mislead the public into blaming the distribution workers for going on strike, when it was now the employer who was taking the industrial action by imposing the lockout, threatening the livelihoods of their own staff. The advertisements carried the signature of Progressive Enterprises Managing Director, Marty Hamnett, himself an import from Woolworths Australia.

The advertisement also attempted to marginalise the unions by claiming Progressive could not meet “unrealistic and unreasonable union demands for what is in effect a 30% pay increase”, and refused to explain how it arrived at the 30% figure when it was challenged to do so. In fact, as a starting point for negotiations, the workers requested an 8% pay increase and pay parity between the three sites. Even if the costs involved in the allowance parity were taken into account the union claims did not amount to more than a 10 to 12% increase in wage costs. NDU National Secretary Laila Harre summed up Progressive's advertising as “Lies, lies, lies” (NDU press release, 29/8/06). Ms Harre said Mr Hamnett's claim that the union only represented 3% of Progressive employees was also untrue. ``We represent 26% of the total employees of Progressive. ``So the company is clearly trying to persuade customers that they are being held to ransom by an unreasonable minority” (NZPA, 29/8/06).

On August 30 th Progressive walked out on mediation after two and a half hours of talks. Ms Harre said “we are flummoxed really. They simply have not attempted to explain their position to us...They were not prepared to discuss any of the issues in dispute unless workers capitulated to a site-by-site bargain.". The next day the Employment Court’s Chief Judge Colgan ordered the parties back into mediation and in an unusual move, provided a judge to assist the process. Despite two days of court-ordered mediation Progressive continued to refuse to bargain on equal pay issues, and only offered percentage increases.

As a result of pressure put on Palmerston North workers, sufficient numbers crossed the picket line to allow the Palmerston North DC to reopen in a partial capacity on September 5th. While Marty Hamnett reacted to this news with some glee, his hopes that the reopening of the DC would lead to more workers returning to work were soon dashed – instead this acted to strengthen the resolve of the workers to remain on the picket line. Harre put this in perspective, saying it was a tribute to the determination of the workers that less than 20 of the 600 involved had returned to work on the employer’s terms.

A good case can be made that Progressive locked the workers out not to prevent a national collective agreement, but to prevent bargaining occurring on a national level – in other words, the age old tactic of divide and rule. The later offer made by Progressive directly to the distribution workers on September 11 th is further evidence of such a strategy operating – a one year deal was offered for Christchurch, a two year deal for Auckland and a three year deal for Palmerston North. This proposed structure was designed to prevent the three distribution deals from coming up for renewal at the same time again. Progressive also attempted to bypass the unions by sending its “offer” directly out to members, a tactic that was rebuffed by the workers who maintained their resolve to make decisions collectively. While highly sceptical of the motivations behind the offer, the NDU and the EMPU, being democratic organisations, put Progressive's “offer” to the members. It was unanimously rejected by workers on all three sites.

As the workers rejected Progressive's insulting offer, the unions launched a legal challenge to the lockout in the Employment Court. “The employer has demanded that union members give up their right to good faith negotiations for a national agreement. The right to good faith negotiations is a fundamental right in the Employment Relations Act and our position is that it is not lawful to demand that the right be given up”, said Harre. She warned that if Progressive's actions were seen to be legal, other employers would be encouraged to attempt to use a lockout to force workers to abandon their right to collective bargaining (NDU press release, 17/9/06). The unions also launched a legal challenge to Progressive's attempts to set up mini distribution centres. NDU delegates at other distribution centres called to advise the NDU they had been asked to carry out the work of the locked out staff. "We have received information the company has contracted (an) outside company to handle distribution, which is, in our view, blatantly illegal." said Harre (Dominion Post, 30/8/06, “Supermarket strikers fight 'illegal' tactic”).

During the lockout the NDU was also negotiating with Progressive over a new collective agreement for 4200 supermarket members. On Sunday September 3 rd the company put up notices in all stores calling all non-members to meetings and promised pay rises for all of those on individual contracts in an attempt to de-unionise the supermarkets (NZ Herald, 5/9/06). The union had to counter another disinformation campaign from Progressive after the company attempted to drum up fears among supermarket workers they could also be locked out. The New Zealand public showed no signs of buying into Progressive's outright propaganda.

Public Support

In her weekly column in the Christchurch Press on Saturday September 9 th, Liz Gordon highlighted the risks taken by the company in imposing the lockout. “Tuesday's Woolworths advertisement in the newspapers was notable for two reasons. The first was that it advertised its ‘top eight’ specials. Why not ‘top ten’? Perhaps there are no longer enough products on the shelves, with the ongoing lockout of distribution staff into its third week? The second odd thing was the dark-blue caption along the bottom, purporting to thank ‘our valued customers’ but actually involving a nasty little attack on its locked-out workers.

“This is a risky strategy. Woolworths Australia, the owners of the Woolworths and Countdown chains, cannot afford to alienate people. Inviting people to side with the company may win them some support but my guess is that it will lose them more. Put it like this. There are two major chains of supermarkets in New Zealand. Wherever you shop, you are putting profits in the pocket of one or other of the giants. Foodstuffs has around 55% of the market and Woolworths Australia 45%. So out of every 20 choices people make to go to the supermarket, 11 choices are for one chain and nine are for the other.

“One thing that probably has not come into the choice equation until now is ethical matters. All supermarkets pay their staff very low wages. All supermarkets put pressure on their suppliers to reduce prices. Woolworths is currently changing that ethical balance by its behaviour. Bringing an employment dispute into a shopping advertisement forces us to take sides. This, presumably, is intended. The supermarket chain is gambling that there is little sympathy for the locked-out workers out there. I think it has miscalculated. I am reminded again that the new management has been imported from Australia, where a very different industrial climate exists”.

Progressive management had certainly miscalculated the public mood. Elderly ladies would stop by the picket with freshly baked cakes and other food, truck drivers stopped by with large packets of fish and chips. The public even considered the plight of the workers’ pets, gifting a large number of dogrolls, filling up the NDU fridge and then some. Each time a picket was held, most of the passing cars would toot in support. Donations were easy to come by and warmly received, reaching a national total of $100,000 by the second week. As well as dropping coins in buckets, help also came via the automatic 0900 LOCKOUT telephone line, allowing people to make automatic $20 donations.

On Friday September 8 th, over 300 people in Christchurch joined in a march from the Trade Union Centre in Armagh Street to a short rally in Cathedral Square. With an 11.30am start, this would have to be one of the largest mid-week marches in Christchurch for some years. Workers, unionists and an array of supporters from a wide range of organisations took over both sides of Manchester Street with banners proclaiming “Proud Kiwis vs Countdown bullies”, “Count on them to keep wages down”. Marchers chanted “ New Zealand made, not Aussie slaves”. The next day large public rallies were held in Auckland (attracting 500 people despite the rain), Palmerston North (350) and Napier.

In the leadup to the Christchurch march unionists and local community activists joined together to form a community group, Shelf Respect Supporters, to help organise actions and donations to support the distribution workers. The next week they issued a press release, with well known activist Christine Dann acting as spokesperson. They organised the first “Saturday Supporters Club” outside Countdown Church Corner on September 16th, joined by some of the workers. At the Church Corner picket one of the workers grabbed a megaphone to encourage customers to go to shop at Pak’nSave instead. He told customers as they entered that there was nothing on the shelves, and that Countdown would soon have to make all its checkouts into “express lanes”, as the supermarket would struggle to have 12 items to sell! He must have ranted in the direction of Countdown for a good 15 minutes – yet it always remained entertaining. At the same time as the picket the EMPU had organised a car boot sale out at Shands Road, giving the workers a chance to highlight their plight and gain some much needed cash in the process. Both Christchurch events attracted credible numbers and good TV coverage, demonstrating the growing strength of the movement.

Many other members of the public, incensed with Progressive's behaviour undertook their own independent actions. In Wellington supporters staged a “trolley jam” at a Johnsonville Woolworths, calling supervisors from checkout to checkout to respond to “errors” on eftpos machines and multiple requests to delete already scanned items from trolleys (NZPA, 19/09/06, “Trolley jam brings Wellington supermarket to halt”). The group halted shopping for more than half an hour as the queues grew. A group of Wellington anarchists ensured Progressive suffered economic pain by regularly filling up trolleys with perishables and frozen goods, leaving full trolleys of food to melt and decay.

Political Support

Green Party MP Sue Bradford called on shoppers to boycott Progressive Enterprises supermarkets until locked-out workers were allowed to negotiate a national collective agreement. “The Green Party is totally behind the locked-out workers. The right to form national collective agreements is a basic one which workers in many other industries have successfully attained. It is appalling to see Progressive Enterprises applying such brute economic force to prevent its workers from negotiating one. I have the utmost respect for all the low-paid workers who have forgone 13 days’ pay to express their anger at these bullying tactics..... It is a credit to the strength of the National Distribution Union” (press release, 6/9/06, “Boycott of Progressive Enterprises urged”). Green Party activists e-mailed letters of complaint to Progressive management, in particular asking them for the costing information that Progressive used to justify its farcical claim the unions were asking for a 30% pay increase. And what response did they receive? “The details of the costing information are confidential to Progressive”.

Maori Party MP Hone Harawira called by the Auckland picket line and said he wanted to let the locked out workers know “the Maori Party stands with them in this struggle and will be doing all we can, to support their claim for pay parity”. He also called on employers to stop scare-mongering about “old style militant unionism” and “look at the facts. The issue is simple; the workers want pay parity, and the multinational says no” (press release, 12/9/06,”Nothing Progressive about ripping off workers”).The Alliance donated $500 to the locked out workers, and encouraged members of the party to match that donation (members ended up raising $700). The Workers Party encouraged the public to make donations and distributed around 2,000 NDU leaflets around Christchurch carparks and communities.

The Silence From The Labour Leadership Was Deafening

In stark contrast to the generous moral and financial support offered by many Labour Party members and supporters. Christchurch Central MP Tim Barnett came and stood with the workers on the Hornby picket line, demonstrating his healthier political instincts. It was also good to see Palmerston North MP Steve Maharey (who is also a senior Minister) unrepentant for supporting his constituents with a $200 donation, although this only happened after Steve was “outed” by the media. Apart from this signs of public support from Labour MPs were few and far between.

It also must be acknowledged that Labour MP Ruth Dyson (perhaps with a few others) worked behind the scenes to ensure the locked out workers did not face a standdown (delay) in obtaining welfare benefits, yet in doing so she was acting as a good constituency MP not as the Minister of Labour. The situation was far more serious than a dispute between an employer and their employees. By refusing to bargain in good faith, Progressive issued a direct challenge to a key principle of the Employment Relations Act. In a speech to the Council of Trade Unions (CTU) in 2003 Prime Minister Helen Clark said the Employment Relations Act was designed specifically to promote collective bargaining. While discussing a review of the Act she acknowledged in some cases “failure to recognise fully the rights workers have to bargain collectively is impeding the objective of promoting collective bargaining” (Helen Clark, 23/10/03, Keynote Speech to CTU Conference). So the actions of Progressive Enterprises ought to have been a matter of policy and principle for a Labour-led Government. One would have hoped that Labour would have learnt the lesson of 1951 – there is nothing to be gained from “fence-sitting”.

National made it clear whose side it was on. Industrial Relations Spokesperson Wayne Mapp put out a press release repeating many of Progressive's misleading claims (31/8/06, “Unions drag everybody down”). He also criticised Steve Maharey for contributing to the lockout fund. During the epochal 1951 waterfront lockout the National government and the right wing leadership of the former Federation of Labour used the dispute to further their common agenda of crushing the “militants”. This meant there was less focus put on the agenda of the other significant player – the shipowners, who at that time were all under British control and ownership. In the case of Australian-owned Progressive, it is also possible that had there been strong Government involvement in the dispute, whether from the Left or Right, this may have become the storyline, and there may have been less focus on the bullying behaviour of the company. Still it would have been good to hear Labour defend its own Government policy in the context of the dispute.

It was also interesting that many in the business community also chose to stay quiet during the lockout, and if they did so public comment was made quite late in the piece. Business NZ Chief Executive Phil O'Reilly attempted to drum up fears of “militant unionism” and the greater use of collective agreements. “We are seeing a trend where similar wage claims are being made across lots of employers who have lots of different circumstances in different regions, different markets and different levels of profitability”. O'Reilly argued that this approach would “undoubtedly” lead to more industrial disputes because it took no account of the differences between an employer in South Auckland with 300 staff and one in Te Kuiti with 20 staff (Sunday Star Times, 10/9/06, “Employers fear union power push”).

Yet O'Reilly's quibbles were nothing but a distraction of little relevance to the Progressive dispute - which was being fought over the right of Progressive Enterprises to continue to pay its staff more money in Palmerston North and less in South Auckland, despite it being widely recognised that Auckland is a far the more expensive place to live and operate a business. Perhaps the more perceptive and less ideologically driven employers recognised that Progressive's risky strategy stood a high chance of increasing public sympathy for the union movement, increasing union membership and broadening the scope of collective agreements. Here is hoping they were right.

New Zealand And International Unions United Against Transnational Bully

The Progressive dispute bought the union movement together in a shared sense of resolve, unity and solidarity. On reflection this has to be one of the most heart warming aspects of the whole battle. Ross Wilson, the President of the CTU, played a key part in fostering this unity, making public statements in the first few days encouraging unions to support the campaign of the NDU and the EPMU through messages of solidarity and with financial support for the locked out workers.

Unions gave generous contributions to the lockout fund and encouraged fundraising among their members – examples included a Public Service Association raffle, a Finsec quiz night and the initiative of the Maritime Union for each one of their members to donate one hour's wages a week for the fund to help the locked-out workers. The Association of University Staff encouraged other union families to “adopt a locked out family” to help the Palmerston North workers. In all, 32 New Zealand unions made donations to assist the distribution workers, from both the public and private sectors.

On September 8 th union delegates Karl Skivington (NDU), Darren Johnston (EMPU) and Quentin Thompson (NDU) travelled to Wellington to address a special meeting of the CTU, including representatives from 37 unions representing 350,000 New Zealand union members. They spoke of the hardship they faced after more than two weeks without pay. At the conclusion of the meeting the gathered unionists passed a resolution calling on all unions to “take every possible action to support” the locked-out workers, encourage support from international unions, and “consider and provide all possible action, industrial and other, to support the resolution of this dispute by a just settlement”, including actions to exert financial pressure on Progressive both in New Zealand and overseas.

Trevor Hanson, the National Secretary of the Maritime Union, raised the possibility of asking their Australian affiliates to block the loading of Progressive's cargo on Australian wharves. "If these employers want to cross borders, we have the right to work internationally as well," Mr Hanson said. "We will be discussing it with the International Transport Workers Federation in London this morning and we'll put all sorts of international pressure on that we can" (NZ Herald, 8/9/06, “International Pressure to be put on Progressive Enterprises”).

On September 18 th the International Confederation of Free Trade Unions - Asian and Pacific Regional Organisation (ICFTU - APRO), a body representing 30 million workers in the Asia Pacific region, condemned the behaviour of Woolworths Australia/Progressive. “This heavy handed pressure by a major corporate employer to force low paid workers to relinquish their right to bargain collectively as guaranteed by International Labour Organisation Conventions and New Zealand law”. The ICFTU gave its full support to “the New Zealand distribution workers led by the NDU, the EPMU and the NZCTU in their efforts to exercise their legitimate rights and achieve a fair settlement” (ICFTU press release, 11/9/06, “Pacific Union Condemns Progressive Enterprises”). Large donations were also received from Australian unions, including the Maritime Union of Australia, the Transport Workers Union and the Rail Tram and Bus Union, whose representatives also travelled to New Zealand to join picket lines.

In an opinion piece published in the Dominion Post on September 11 th, Ross Wilson said the use of a lock out by an employer in response to “quite modest collective bargaining claims” demonstrated the need for New Zealand's employment law to be strengthened. “This heavy-handed approach raises serious questions about the adequacy of New Zealand's employment law framework, particularly for vulnerable workers such as these, who have merely chosen to exercise their internationally guaranteed human right to negotiate collectively with their employer. That vulnerable workers who use the proper legal processes to improve their wages and conditions of employment can simply be starved into submission by huge corporate power points to a fundamental weakness in the wage bargaining processes”. A settlement was reached for the supermarket workers on September 14th in a mediation hearing in Auckland. Soon after Marty Hamnett approached the NDU to indicate he wanted to talk about settling the DC dispute.

Talks Resume, A Potential Settlement Emerges

On the morning of Tuesday September 19 th the unions called for an adjournment to a court hearing on the legality of the lockout to allow talks to continue between Progressive and the unions. These concluded at 3.30a.m. the following morning with a three year settlement reached. This deal achieved pay parity between the three sites within a 22 month time frame, based on a structure of three separate agreements. A single pay rate would deliver a 19.7% pay increase for the Christchurch distribution workers by year three. Workers also gained an extra week’s leave after ten years’ service and the offer from the company of an interest free loan of $1,000, as a small token to assist workers with ongoing financial hardship due to the lockout.

As part of the settlement all court proceedings had to be discontinued. It was unfortunate the “legal amnesty” did not help those arrested* on the picket line during the dispute – any convictions or diversion in these cases stood. Ratification of the settlement required 50% (+1) of the workers in each centre to vote in favour. * During the dispute there were a number of arrests, in various cities, of union officials, workers and supporters. A CAFCA committee member was one of them. Ed.

On the Thursday workers met to vote on the proposed settlement. In Christchurch over 100 distribution workers packed a small function room at the Equestrian Hotel, about the size of a school hall. The tension in the room was immediate – no one knew which way the vote was going to go. As workers lined up for their lunch (pizza) the nerves eased, only for the tension to be raised again as the meeting began. It was an electrifying debate, interspersed with many moments of good humour. Workers who a month before may have only had a passing involvement as union members now rose to their feet at a packed union meeting to participate. The lockout had become their life over the previous four weeks, the lockout transforming some into full time activists (in the best sense of the word). Some workers wanted to reject the settlement and fight on for the trophy of a national collective agreement. Others saw that they had gained most of what they wanted, and wished to end the dispute with unity still strong and intact. There were strong speakers on both sides, and in the end the vote was very close, with the Christchurch workers voting narrowly in favour. Similar debates were held at union meetings in Auckland and Palmerston North – where the settlement was passed with large majorities in favour.

Despite the tense debate in Christchurch, unity was quickly restored with several rounds of cheers for all of those involved. As the workers would have to be back at work for over a week before the first pay cheque arrived, some of the money from the lock out fund was distributed. EPMU delegate Darren Johnson (DJ) then spoke to highlight the plight of a worker, who had been kicked out of her flat as she could no longer afford the rent, thanks to her employer locking her out of her job. DJ suggested each one of the workers put in some of the money they had just received to help her into a new home. A hat couldn’t be found, so workers enjoyed the irony of passing around a yellow Pak’nSave shopping bag, and filled it with over $1,100. Amazed by her fellow workers’ generosity, she left the meeting relieved and grateful.

While the unions had initiated bargaining at a national level, the employer responded by locking people out, and refused to deal with people on a national level, insisting on site by site bargaining. So while the settlement was structured as three separate agreements, Laila Harre saw the terms as the same. "It's not a major issue from our point of view. This is a national collective agreement in all but name. The most important thing for these workers was using their national bargaining power to deliver equal pay for equal work and they've done a stunning job of that," she said.

Progressive also claimed victory on the basis of the three separate agreements, but in many ways this was just a face saver. Soon after the ratification by the union members Marty Hamnett was interviewed on the Checkpoint programme on National Radio. Asked if he had any regrets about the lockout, and if he would do it again, Marty Hamnett replied “I think every situation you have to... err... I guess make a decision at that point in time. I can only say the three agreements arrangement is very important to us, and I think it would be important to any other major New Zealand company who operates more than one site across the country”.

The interviewer asked Mr Hamnett for a response to the claims of the unions that his description of the industrial action was “a cynical misrepresentation of the facts, what do you say to that”. He replied “I will just get back to the point that the lockouts that were put in place, were only after the union had been on strike for 48 hours and then decided to go indefinitely so, I you know, I think for the union to fire arrows in our direction in that regard is quite ridiculous”. Perhaps there was a reason why Mr Hamnett sounded a little nervous when he said this – he was simply reinventing history to suit himself. At no time did the union “decide” to make the 48 hour strike indefinite.

A couple of days later a member of the public wandered into the Christchurch NDU office. We had not seen her before. She said she heard Marty Hamnett on the radio and could not believe how arrogant he was. She asked if we were still collecting money for the workers (we were), as she hadn't got around to making a donation yet and Hamnett's performance had made her want to help the workers out with an even larger donation. The unions and the workers encountered similar reactions from the public throughout the dispute. Many business people also gave donations to the lock out fund. Progressive and Foodstuffs regularly use their market power to bully small suppliers, so it is entirely possible a few small business owners recognised something familiar in the way Progressive were treating their distribution workers.

Over $400,000 was raised for the locked out workers during the campaign, with around two thirds coming from street and workplace collections and the 0900 LOCKOUT line. As Laila Harre told the Manawatu Standard (18/9/06): “The workers have been overwhelmed by the level of local and international support for their cause. The collections fall well short of replacing their usual earnings but they do make a big difference''. Responding to the news of the settlement CTU President Ross Wilson said: "Progressive Enterprises seriously underestimated the huge level of community support for the workers it locked out nearly a month ago, and today’s settlement achieving pay parity is a victory for ordinary working people over this large overseas employer. Thanks to overwhelming financial and moral support from unions, union members and the general public the company’s strategy of starving these low paid workers into submission has failed" (CTU press release, 21/9/06).


On the Friday the distribution workers staged a symbolic return to work, followed by a mass walkout again. In Christchurch around 65 workers linked arms as they passed through the gates of Shands Road, approaching the warehouse to a steady chant of “The workers, united, will never be defeated”. As they entered, the high steel roof turned the chant into a bellowing echo. As they stood around in a circle inside their workplace once again, an EMPU delegate confided, “you bastards made me cry yesterday”, referring to the ratification meeting. From the group of workers a poet emerged, to recite an original poem in a rhythm reminiscent of Sam Hunt. Powerful stuff.

On hearing the news that Feltex* had been placed into receivership by the ANZ Bank, the Progressive distribution workers travelled en masse to offer solidarity and support to the workers at the Riccarton carpet plant. Auckland distribution workers took part in a protest outside the greedy bank. Many of the workers saw these actions as a small way they could thank the New Zealand public that had supported them so well. * See Sue Bradford’s article on the Feltex fiasco elsewhere in this issue. Ed.

Legend has it only two distribution workers in the whole country turned up for work on the Friday, only to be sent home, with most workers electing to return on the following Monday. Many were shift workers and simply needed to get some sleep after four weeks of disruption caused by their employer. Asked by a TV reporter whether their refusal to go back to work on the Friday was a final “up yours” to their employer, one worker replied “yes, you could say that”. 40 Progressive workers in Auckland never returned to work.

Despite the desperate attempts by Progressive to use their other employees and scab labour to do the work of the locked out employees, an action that was arguably in breach of the law, a month later the Woolworth's Australia Chief Executive Officer (CEO) may have inadvertently recognised the value of the locked out workers when he discussed the reasons for poor New Zealand sales in September. “It was lack of product on the soon as we got product back on the shelves our customer count and our sales returned. It was a matter of not having it. New Zealand comparable sales were flat, mainly reflecting the industrial action in September”. Woolworths reported New Zealand sales of NZ$1.052 billion in the 14 weeks to October 1. Lost sales were “nowhere near” the low tens of millions, but he refused to put a figure on it ( Press, 24/10/06).

Yet it would be in Woolworths interests to talk down the economic impact to avoid difficult questions from shareholders. According to Forsyth Barr retail analyst Guy Hallwright, speaking to the NZ Herald on September 3 rd, he predicted the dispute could cut the supermarket chain's profits by a third or even a half. A Progressive insider also said sales had dropped about 5% since the “strike” (sic) began. A conservative calculation of Progressive's losses could be made by taking 5% of the NZ$1.052 billion and working out what this would equal over an averaged four week period – this suggests lost sales of at least $15m. One can only assume sales dropped more than 5% as the lockout went on. Perhaps lost sales were “nowhere near” the low tens of millions because the real figure was significantly more!

On October 24 th Woolworths announced that Progressive boss Marty Hamnett had returned to Australia for “family reasons” after only six months in the job. Hamnett criticised media reports he was being “drummed out of the country” (NZ Herald, 24/9/06, “Woolies appoint boss for NZ arm”). Woolworths Australia chief executive Michael Luscombe also denied Hamnett's move was due to the lockout, stating: “We were extremely happy with Marty's performance in New Zealand” ( Press, 24/9/06, “Lockout proves costly”). This comment alone speaks volumes about the values of Woolworth's new CEO. That said, Luscombe did appear to express more regret over the lockout, compared with the unrepentant performance of Hamnett on the Checkpoint radio programme. “While the outcome was good for both parties, the way we got there – both parties would say we would rather not have done it”. Another Australian, Peter Smith, is replacing Hamnett as the head of Progressive in New Zealand. In November 2006 the retiring CEO of Woolworths Australia, Roger Corbett, was appointed to the board of infamous union busting American retail multinational Wal-Mart, as further evidence of the ever closer links between these two retail giants.

A Great Win For The Workers

“28 days without pay was hard, but in the end we won our agreement,” said Mangere distribution delegate Daniel Patea. “Some of us had no money except for the kind donations from the public, but we knew if we stayed staunch, we'd win – and we did. They tried to bully us into starvation, but all they've done is made us stronger” (NDU Express, November 06, “Stood up, fought back”).

In an e-mail thanking the Shelf Respect Supporters and other community organisations for their help, NDU Southern Regional Secretary, Paul Watson, stressed the importance of the support offered by the wider community in achieving a successful outcome. “The lockout struck a nerve and passion with Kiwis like no other has in a generation. The magnificent fight back and determination of the workers affected, the absolute resolve of the union movement to support them and the awesome support of community groups, the general public and local activists combined with international trade union solidarity made this dispute the success it has become. I know the NDU & EPMU are very proud of what has been achieved and we acknowledge that community support has significantly contributed to the outcome”. At the close of the Christchurch meeting to ratify the settlement, NDU delegate Karl Skivington boasted that the workers at the Colombia Ave distribution centre were going to beat the Shands Road workers in their next game of touch rugby. Why is it, as soon as anyone mentions bloody rugby, unity simply disappears?

Progressive Enterprises is a finalist in the 2006 Roger Award (see elsewhere in this issue for the full list). CAFCA gave as much support as possible to the unions and their locked out members. We made a donation, we distributed union material to our members, we publicised and took part in all union activities in Christchurch. Ed.

The Lockout And The Media

On the whole the television media were largely sympathetic to the plight of the locked out workers, especially when the workers opened up to share their stories of hardship. Large marches and colourful pickets helped illustrate the dispute for a picture conscious media – as did the successful “car boot” sale outside the Shands Road distribution centre in Christchurch. The coverage in the print media was more mixed, ranging from strong support from a number of columnists, some sympathetic articles, some articles sympathetic of the company, as well as a few rather antagonistic and grumpy editorials. One could point to the fact then Woolworths Australia CEO Roger Corbett is also a non-executive director of Fairfax Media, owners of most of the major newspapers in New Zealand, including the Press and the Dominion Post. While this is unlikely to make a significant difference in itself, the position of the company as a major advertiser does underline the potential power of Woolworths Australia to shape public opinion.

The Dominion Post editorial of September 6 th was particularly reactionary – incorrectly describing the dispute as an indefinite strike when it was Progressive who had instigated an “indefinite” lockout. It also made clear the view of that particular paper that negotiations should not be part of normal industrial relations – employees should take what they are given and or go elsewhere. The Dominion Post also gave Laila Harre little chance of winning – something certainly worth noting in retrospect. The Christchurch Press complained the claim for a national collective agreement is “redolent of older-style industrial relations”, however the editorial also acknowledged the union appeared to be winning the “publicity battle” with the company.

During the lockout Progressive employed a public relations firm, Pead PR, to manage media issues, with Deborah Pead sometimes quoted as a spokesperson for Progressive. Ms Pead hit the headlines again in November for offering media employees the chance to win a trip to New York if they included a made up word in their stories, a word later linked to a pre-mixed alcoholic drink (I am not naming either). University of Canterbury journalism school head Jim Tully said the campaign created a conflict of interest for journalists, describing the conduct of the campaign as “sinister” (NZ Herald, 14/11/06).

The words “strike” and “lockout” are not interchangable, as they are defined clearly in law. As part of their training journalists are urged to ensure their reporting of legal issues is accurate, to ensure the newspaper does not get sued. Even the Prime Minister Helen Clark had to reach an out of court settlement with John Yelich after she referred to him as a murderer when in fact he had been convicted for manslaughter. Why are journalists and their editorial masters so lax when it comes to accurately describing industrial disputes? One can only assume ideological considerations lie behind their apparent “mistakes”. Take the NZ Herald Website for example. Of the stories about the dispute published between August 29 th and the end of October that include the words “lockout” or “strike” in the headline, seven incorrectly described the dispute as a “strike” and four described the workers as “locked-out”. One of the four articles was by Leftwing columnist and union leader, Matt McCarten. So, based on the stories the Herald publishes on-line, the Herald's headline editors are getting it wrong 64% of the time.

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Foreign Control Watchdog, P O Box 2258, Christchurch, New Zealand/Aotearoa. December 2006.


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