950 jobs to go: Union says The Warehouse using Covid-19 excuse

Monday, 20 July 2020

Warehouse workers say they're devastated to lose their jobs as more than a thousand positions hang in the balance.

The Warehouse is using Covid-19 to justify decisions that will leave hundreds of workers without jobs, and thousands more with significant reductions to their incomes, First Union general secretary Dennis Maga says.

Staff at The Warehouse went into meetings on Monday morning as part of the retail giant's restructuring process.

It is understood they were told that, across the board, the number of staff hours would be reduced and staff would no longer specialise in categories in the store. The company plans to eliminate 782 roles, plus 137 through store closures. There will also be job cuts at head office.

It is understood that store hours would be changed to an 8am start across the board.

The Warehouse Group had proposed six store closures on top of three already confirmed, which could have resulted in 1080 job losses. It is understood it has outlined plans to close four on Monday, in Dunedin, Whangaparāoa, Johnsonville and Warehouse Stationery in Te Awamutu, in addition to previously announced closures, including Birkenhead, where 40 jobs are set to go.

The Warehouse has started a restructuring process that could mean 1080 job losses.

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The Warehouse Group currently has 12,000 staff across the country.

“They’ve been reviewing their business for years and the pandemic has accelerated their progress on an ‘agile’ system that means workers lose out, communities lose jobs, and customers get a worse experience shopping there,” Maga said.

“The Warehouse held an extensive consultation process after sustained pressure from union delegates and then went ahead and did everything they’d already decided after listening well and engaging with workers, who brought ideas to the table and generally felt the discussions were meaningful.

“The restructure includes sweeping reductions of hours across the country, that are left to individual store managers to find and cut, as well as hundreds of job losses and the closure of physical stores.”

Maga said First Union delegates would continue to engage with The Warehouse executives and challenge the business model as it was implemented around the country. He said workers had welcomed the co-operation between the company and the union during the consultation process but warned that further challenges lay ahead.

“This can’t be the standard we accept as a country from big businesses during Covid, or our recovery and resilience as a nation is in jeopardy,” he said.

“Businesses have to share the burden of a financial downturn, and they have to accept that some stores won’t do as well as others after a nationwide lockdown, especially when they own 92 of them and measure their success as a single entity.

“Their survival as a company is not at stake and even the four affected Warehouse stores are making money and trading.

“Smart businesses know that retaining workers is crucial when you’re going into a period of uncertainty, and they look to cut overheads elsewhere. The others cut staff and close stores.”

The Warehouse chief executive Pejman Okhovat said the meeting with staff officially began the consultation process for proposed changes announced on June 8.

“The way we operate our stores has remained largely unchanged for years despite significant changes in the way our customers shop, particularly with growth in online shopping, over 23 per cent in the past three years, and customers shopping at different times of the day and weekends,” he said.

Chief executive of The Warehouse Pejman Okhovat says the meeting begins the official consultation over the company’s proposed restructure.

“We need to ensure good roster coverage across all times of day and every day the stores are open.”

Okhovat said while there might be a reduction in roles, there would not be any reduction in team member pay.

“As we are proposing a change of rostered hours for these team members, we have now entered into formal consultation. Throughout this phase team members have the opportunity to submit their availability through an online app and express if they are interested in voluntary redundancy.”

One Hamilton Warehouse employee, who spoke on the condition on anonymity, said she broke down crying when she heard her hours will be cut. She currently works between 35 and 40 hours each week.

“I will be losing between eight and 10 hours a week. It doesn’t seem like much, but that’s more than $250 a week after tax,” she said.

“That’s a huge chunk of money to lose when you’re on a sole income.”

The Warehouse’s network was established before Kmart became a serious threat, Chris Wilkinson said.

The worker said the company informed employees they would need to formally apply for their roles and hours again, however, preference would be given to affected staff before the jobs are advertised externally or to staff from other stores.

They have until August 9 to apply, and it is expected they will commence their new hours in October. Workers also had the option to take redundancy or partial redundancy, which includes permanently reduced hours.

”The company told employees that they will be applying for “blocks” for work, which means applying for set days and hours. For example, one block could be a Sunday - Thursday shift, from 9-2pm.

“One of the ladies I work with will have to take redundancy because she has young children and she has certain days and hours she works,” the employee said.

“The new system means not only will we lose hours, but for many of us, we will also lose the flexibility to work the days and hours we want to.

That was one of the attractive things about working for the company, that they really cared for their staff.“I’ve been working here for more than fours years and it’s a great place to work, well it was. I’m not so sure now.”

The Warehouse founder Stephen Tindall was part of a group of millionaires who called on governments to tax them more as the world recovers from the economic blow of Covid-19.

The company had taken $68 million in wage subsidy payments offered by the Government before announcing the planned job losses, angering Prime Minister Jacinda Ardern last month.