Wellington bus company owner refused council funds to top up wages: mayor, unions

Tuesday, 27 April 2021

Wellington bus drivers picket the Kilbirnie depot during their 24 hour strike in April 2021.

NZ Bus, the company that employs nearly half of Wellington’s bus drivers, was offered public funds to top up drivers’ pay to the level of the living wage, according to multiple people involved in the discussions.

But Australian private equity firm Next Capital, which bought NZ Bus for $229 million in 2018, rejected the offer, according to Wellington’s mayor, a regional councillor and two unions.

Next Capital said it wanted to accept the subsidy, but it also still wanted to change some other driver conditions.

An agreement to pay drivers the living wage could have helped stave off last week’s strike action and resulting lock-out, which led to an injunction against NZ Bus.

* Wellington bus shutdown could extend after NZ Bus locks out striking drivers, transport minister urges company to withdraw lockout

* More than 1200 Wellington bus services cancelled during March

Wellington bus drivers were met with a lockout in April after launching a 24-hour strike.

Greater Wellington Regional Council transport committee chairman councillor Roger Blakeley said the council, with Waka Kotahi NZ Transport Agency, offered to use public funds to top up drivers’ pay to the living wage.

The living wage increase would affect about 318 drivers, or more than half of the capital’s drivers. NZ Bus employed just under half of the city's drivers and they stood to be the big winners in the increase, Blakeley said.

This would have cost the council and Waka Kotahi $1.85 million a year.

Drivers are currently paid an hourly base rate between $19.40 and $20.40. The living wage is currently $22.10 an hour but the pay boost would have taken the drivers’ hourly rate to $23.75, Tramways Union secretary Kevin O’Sullivan said.

Most bus services in Wellington were cancelled during the 24-hour strike.

But NZ Bus rejected the offer, Blakeley said.

“I have wondered why they wouldn't accept the generous offer to top up the wages. I really don’t know what the reason is,” he said. “They haven’t explained themselves very well.”

Union representatives and Wellington Mayor Andy Foster also said Next Capital turned down the living wage offer.

Thousands of Wellingtonians opted to work from home last week when NZ Bus drivers went on strike, leading the 26 routes being stalled. This led to NZ Bus issuing a lockout notice to drivers, but the union went to the Employment Court and succeeded in getting it overturned.

The union and company head in to mediation on Wednesday to try to come to a resolution.

But John White, a founding partner in the equity firm, disputed the suggestion Next Capital had rejected the offer.

The company wanted the council and NZTA money and said that it wanted to increase drivers’ pay beyond the living wage, to $23.75 per hour.

But the company wanted to change the collective contract, White said.He declined to elaborate on what these were.

The collective conditions offered by NZ Bus were comparable with an agreement it had in Auckland and superior to many other operators, he said.

“We want to pay our drivers more, we want to pay our drivers fairly,” White said. “A number of drivers will be better off,” he said.

The private equity firm had no interest in stripping NZ Bus’s assets and had no immediate plans to sell it. Next Capital made money for its investors by growing investments and improving them, he said.

Council of Trade Unions president Richard Wagstaff said Next Capital would only take the money if it could cut drivers' conditions in the collective contract. This would have meant a cut in annual leave, shift allowances, and weekend and overtime rates, he said.