'Wage theft' in shearing sheds leads to first collective agreement in 24 years

Wednesday, 27 February 2019

Former shearing champion turned lawyer Jills Angus Burney is consulting for the First Union as it prepares a collective agreement.

Shearing contractors who manipulate their employees' wages to undercut rival companies may soon be bound by the industry's first collective agreement in 24 years.

An investigation in 2016 resulted in fines for 10 central North Island contractors who were breaking employment laws, including the widespread lack of employment agreements, inadequate timekeeping records and failing to pay workers for public holidays under the provisions of the Holidays Act.

Manawatū Shearing owner Tony Kendrick is the first to start negotiations with First Union and he expected the agreement to put contractors across the country on the same playing field.

The push for a collective agreement came after a complaint was made by a shearing worker to the Ministry of Business, Innovation and Employment about their team working on Queen's Birthday and not being paid the proper public holiday pay.

Shearing contractors nationwide are manipulating their employees' wages to undercut other contractors.

* Shearing contractors fix employment breaches**

An investigation found most contractors across the country were taxing their staff as 'casuals', which was wrong because most were permanent or fixed-term, seasonal workers.

There were also wage discrepancies, with some not paying the rates recommended by the New Zealand Shearing Contractors Association. This meant contractors could undercut their rivals and steal business.

'No one contractor could be singled out as the whole industry was flying well under the radar,' said Jills Angus Burney, a former shearing champion who is now a lawyer consulting for First Union.

'The rates vary so much that contractors are actually using the workers' wages to negotiate down the farmers' costs.'

Meanwhile, Australia has a federal pay structure, including superannuation, which New Zealand does not.

Angus Burney recalled a case she worked in 2009, where a South Island contractor had declared his workers self-employed. A court ruling found he was an employer and he subsequently went bankrupted for unpaid taxes totalling $3.5 million.

Last year, a Manawatū shearer was paid four different rates from contractors in Feilding and Taihape.

'The fourth contractor can undercut all the others in the same district by up to 50 cents per sheep. That's an example of illegal conduct and wage theft.'

Kendrick said contractors dealt with fine margins and a way to undercut competitors was to manipulate employees' wages.

Although the word 'union' might scare some clients, the industry was overdue for a 'tidy up'.

'If we all pay stats, bereavements, sick days, there wouldn't be such discrepancies [between contractors].

'It won't change what a client is being charged, but it evens up the playing field.'

Kendrick paid $100,000 over six stat days during the summer main shear season, but some contractors weren't paying them at all.