Air NZ and unions collaborate on high performance engagement

Air New Zealand [NZX: AIR] has spent the past 18 months working with its staff and unions on high performance engagement designed to lift productivity by allowing worker participation in decision-making.

Engineering, Printing and Manufacturing Union (EPMU) organiser Strachan Crang said he put the idea to the airline following the ill-fated "Project Choice" restructure of cabin crew in 2013. Mr Crang said he had become "sick of banging my head against a wall" when it came to the airline's former adversarial approach to employee relations.

Air New Zealand's 11,000 or so staff are highly unionised and the high-performance engagement initiative has involved a number of unions including the EPMU, the Aviation & Marine Engineers Association, the NZ Airline Pilots Association (NZALPA), the Federation of Air New Zealand Pilots, and the Flight Attendants and Related Services Association (FARSA).

Fonterra Co-operative Group and the New Zealand Dairy Workers Union were among the first to introduce a similar initiative in the late 1990s, later formalised in the 2000s after a long history of industrial disruption that had seen site lock-outs and millions of litres of milk poured into paddocks rather than being processed.

The Dairy Workers Union and EPMU set up the Centre for High Performance Work in 2008 to work with New Zealand businesses on developing work practices that lead to increased productivity and business growth by integrating workers' shop-floor knowledge into day-to-day decisions and reaching consensus on change.

Faced with shrinking membership and revenue, unions worldwide have seen high performance engagement as a way to maintain their relevance to staff and employers rather than being shut out of the conversation.

Mr Crang said at Air New Zealand they have developed a high performance engagement charter that sets out clear objectives and rules for people to follow.

"It's a cultural change to the relationship between the employer and the unions," he said. "The key thing is about engaging, so workers are part of the solution. Too often in New Zealand they're seen as part of the problem."

Aviation and Marine Engineers Association national secretary Jacqui Roberts said it was a hard sell to some of the 1700 Air New Zealand staff who are members of her organisation.

"Some members were reluctant to enter the process. The reason we got involved is we had been involved in a court case with Air New Zealand and relations were at an all-time low. I felt there was no harm in jumping into the process," she said.

Mr Crang said there had also been resistance from some engineers following redundancies caused by the loss of wide-bodied aircraft heavy maintenance work and skepticism from others because of "what has happened in the past."

Both Mr Crang and Ms Roberts say the cultural change has been embraced in some of the airline's units more than others at this stage, despite being pushed from top leadership, and it could take some time for it to trickle down throughout the business.

Roberts said it had been taken up with enthusiasm in the airports unit, where management faced competitiveness problems. The unit has recently renewed a three-year collective agreement with staff that included a pay rise and protected existing terms and conditions while continuing to find new ways of shaving costs and boosting productivity to become more competitive.

Since the high performance engagement began, industrial action at the airline has either been at a minimum or completely avoided. Crang said his union had been involved in two disputes in the past 18 months that would formerly have led to litigation but which were resolved using new tools under the HPE charter.

"We still have our industrial muscle but we don't overly use it," he said.

Last year Air New Zealand won an Employment Relations Authority case against its main pilots union, NZALPA, over the transfer of better pay conditions offered to members of the breakaway union, the Federation of Air New Zealand Pilots.

NZALPA president Mark Rammell, who is an Air New Zealand pilot, said the association's relationship with the airline had had ups and downs in the past and they needed to find a different way to deal with problems from the way they had in the past 20 years.

High performance engagement provided a strict framework for resolving issues in a more even-handed manner and in a new way that had been tried and tested in other parts of the world, he said.

"This is a sensible way to do business. With a large organisation like Air New Zealand and the history with NZALPA, we need a far more formal process set up with training regimes and hierarchies so people now have a process to follow."

Air New Zealand has made only minimal public reference to high performance engagement to date and declined comment to BusinessDesk on the initiative until next week, although it has briefed other media.

Chief executive Christopher Luxon said in a media interview last year that the airline had failed in the past when it came to engaging unions as one of the country's largest private employers of a unionised workforce. He referred to a high-performance model to collaborate with unions on challenges the airline faces and he made the same reference last year at an investors' day presentation.

(BusinessDesk)