A decision of the Employment Court will dramatically improve the working conditions of thousands of wharfies, and could trigger a flood of personal grievance claims, writes Rebecca Macfie

Employment agreements requiring waterfront workers to be available 24 hours a day, seven days a week have been declared unlawful by the Employment Court, and the employer involved has been hit with a compliance order.

The Maritime Union says the ruling will change the lives of thousands of wharfies whose employment agreements hold them at the beck and call of their employers.

The employer targeted by the compliance order, issued last week by Judge Kerry Smith, is ISO Ltd, a major stevedoring contractor operating at ports around the country. ISO is owned by ASX-listed Qube Holdings, and employs about 1000 workers in New Zealand.


The union says employment agreements similar to the unlawful ISO contracts are commonplace throughout the industry, and the ruling will have wide ramifications.

The legal challenge was mounted four years ago by the union and 10 ISO workers at the Port of Tauranga. The central issue has been the company’s requirement that they be available 24/7, 365 days a year, but do not know from one day to the next whether they have work. They receive a text at 11am telling them if they are required at 3.15am the following morning for a 12-hour shift. They get no message if there is no work, and there is no payment to compensate for making themselves available.

Having been told that they are on shift, it’s not uncommon to then discover upon waking in the middle of the night to go to work that the shift has been cancelled. They describe this as being “roasted”. Roasted workers don’t get paid for the cancelled shift.

Workers ranging from general hands through to crane and digger drivers are subject to these demands. ISO told the court that it wasn’t possible to roster workers in advance because of the unpredictability of ship arrivals, cargo volumes, berth availability, exchange rates, weather, and other factors.

The cost of that flexibility is borne by workers who have to “park up their lives,” says union national secretary Craig Harrison. They can’t commit to sport, hobbies, clubs, or social occasions. Family life suffers.

By the time of last week’s compliance order, only one worker – George Lye – remained listed as a complainant out of the original 10. All the others have progressively dropped away from a long-winded process that has generated two decisions from the Employment Relations Authority and three from the court.

For the past three months Lye himself has been the subject of disciplinary action by ISO, with union arguing he was being scapegoated over the larger employment issues. ISO denied this, but nevertheless the Employment Relations Authority took the view that the company had subjected him to “unjustifiable action”, and took the unusual step of blocking it from sacking Lye.

Simon Mitchell, lawyer for Lye and the union, says Lye’s individual employment agreement guarantees him 60 hours work a fortnight, but those hours can be at any time. “There is no time where you can say ‘at Tuesday at 10am, I’m at work’.” Lye is barred under the contract from declining any request to work, unless it’s during a period of approved leave.

Most of the ISO workers now have 80 guaranteed hours a fortnight, but with no set times for that work. The court says these revised contracts are also non-compliant.

“What these workers say to me is how stressful it is to get basic things done, like get your car serviced, or be able to pick up your child from school,” says Mitchell.

“It also has huge health and safety implications…If you’re going to do shift work, you have to be able to plan your sleep around it. Shift workers already have hugely increased risk of cancer and heart disease, and then you then add these uncertainties to it and it’s even worse.”

ISO added China Forestry Group’s Tauranga volume to its marshalling and stevedoring portfolio in mid 2020. Photo: ISO Facebook

Harrison says this form of extreme flexibility began to take hold in the 1990s following the restructuring of the waterfront and the deregulation of the labour market through the Employment Contracts Act.

At each step in the legal process the authority and the court have ruled ISO’s contracts to be in breach of the Employment Relations Act because of the absence of any set work hours, and the lack of compensation for workers making themselves available.

Although they are not so-called ‘zero-hours’ contracts (because the workers are guaranteed 60 or 80 hours a fortnight), the case has been heard under the provision of the Act introduced in 2016 to bar such contracts, which had become notorious in the fast food sector for requiring workers to be constantly available for work, without compensation.

ISO has resisted the rulings of the authority and the court, arguing among other things that the claims were “frivolous and vexatious”, and that the problem should be dealt with in collective bargaining, not in court.

In the meantime, it continued to break the law. As the court put it in a December 2020 decision: “ISO has consistently resisted efforts to amend or replace the employment agreement, despite being on notice from as long ago as November 2018 that it does not comply. The company persisted with this method of allocated work for a competitive advantage.”

Until last week the court had declined to issue a compliance order to force ISO into line. But now it is now requiring the company to give Lye specified hours of work. Although the order relates only to Lye, Harrison says it has implications across the waterfront industry, where contracts like Lye’s are normal.

He estimates close to 2700 workers will benefit, and that it could trigger a “potentially massive” number of personal grievances from workers seeking to recover compensation for years of unlawful intrusions on their lives.

ISO declined to comment to Newsroom about the implications of the case or why it had continued to operate employment agreements that were in breach of the law, saying the matter was still subject to bargaining.

ISO’s defeat in the Employment Court adds to a series of recent workplace challenges for the company, particularly on the health and safety front. In January it faces a five-day District Court hearing in Napier following the carbon monoxide poisoning of six workers in April 2018. The workers were loading logs onto a ship chartered by log exporter Ernslaw One when a digger malfunctioned, sending fumes and exhaust into the hold. Two of the workers lost consciousness.

Early this year ISO was in court in Gisborne over the avoidable death of 29-year-old port worker and mother, Shannon Rangihuna-Kemp, who was crushed by log falling from a trailer in October 2018. She died at the scene.

Rangihuna-Kemp was employed to photograph logs and scan their attached barcodes prior to their loading onto ships. There had been a previous instance of a log falling from a trailer in transit from the nearby log yards to the port, and ISO was well aware of the risk, especially when logs were wet and had been debarked. Yet one of its main controls was to tell workers to “take care when moving around log bunks and trailers as cargo may slip or become dislodged”.

ISO failed to “adequately monitor the safety of its workers” at the port, according to the agreed summary of facts in the case.

ISO pleaded guilty to a charge carrying a potential fine of $1.5 million. However, it convinced the court that instead of being hit with a financial penalty it was more productive to enter into a Court Ordered Enforceable Undertaking – a provision under the 2015 Health and Safety at Work Act – to improve health and safety processes.

WorkSafe strongly opposed this given the “serious and systematic failures involved and fatal outcome”. It described ISO’s proposed “undertaking” – which the company said would entail investment of $750,000 in health and safety measures – as “under-explained and over-costed”, and “essentially a capital expenditure exercise which will only benefit the company financially” by saving on labour costs and increasing log loading efficiency.

Judge Philip Recordon favoured ISO’s arguments and awarded the Court Ordered Enforceable Undertaking, saying it was better that money be spent “developing the systems” rather than “going in to public coffers” via a fine which would likely have been only about $400,000. He also ordered ISO to pay $100,000 in reparations to Rangihuna-Kemp’s whānau.

ISO avoided prosecution over the serious injury to one of its workers at the Port of Tauranga in December 2017, by entering into an Enforceable Undertaking with Maritime New Zealand (which has health and safety jurisdiction for accidents on board ships). The worker, who had been loading logs into the hold of a Hong Kong-flagged, Singapore-owned ship, fell eight metres when a damaged handrail gave way as he was disembarking. He suffered multiple broken bones, internal bleeding, and nerve damage.

The undertaking was entered into in October 2020. Maritime New Zealand says it is “monitoring compliance” by ISO, but has refused Newsroom’s request under the Official Information Act for details of that monitoring, arguing that to do so would be likely to “prejudice the maintenance of the law, including the prevention, investigation and detection of offences”.

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