Partnership Resource Centre
Case Studies - Fisher and Paykel with the EPMU – A Partnership Case Study
Contents
- The Partners
- How the EPMU and Fisher – Paykel put partnership into practice
- Positive Benefits of Partnership
Fisher & Paykel Appliances Ltd (F&P) and the Engineering, Printing and Manufacturing Union (EPMU) have built a mature and highly developed model of partnership over many years.
The Company (both managers and staff) and the Union have found some very effective ways of doing business and working together to create a successful and healthy workplace that people enjoy being a part of.
At Fisher & Paykel, partnership is part of the company's architecture, not an add-on. It is integrated into management structures and operational processes which ensure it is an integral part of every day business.
THE PARTNERS
Fisher and Paykel Appliances
The focus of this case study is on Fisher and Paykel’s Auckland based manufacturing operations which are currently part of Fisher & Paykel Appliances Ltd. The F&P Group earned revenue exceeded $1 billion for the first time in the 2004/05 financial year. F&P also has manufacturing operations in Australia and the US. Overseas sales account for over 75% of the company’s revenue making F&P a truly international company.
The Engineering, Printing and Manufacturing Union
The EPMU is the largest private sector union in New Zealand, with around 50,000 members in ten industries. It has over 1400 members and 29 delegates out of a total workforce of 3300 across the Fisher and Paykel Auckland and Dunedin plants. Each plant has a nearly full time convenor of delegates and a number of area delegates. There is also a full time Chair of Convenors paid for by the company.
The Building Blocks of Modern Partnership at Fisher & Paykel
For Fisher and Paykel, its relationship with the union is viewed as a source of competitive advantage where:
- staff interests are properly taken care of
- transaction costs associated with managing employment agreements are rationalised and
- genuine consultation with staff and unions ensures high levels of commitment to and successful adoption of change.
How the EPMU and Fisher & Paykel put partnership into practice
The composite agreement
The negotiation of a single composite agreement in the late 1980’s provided the parties with their foundation for modern partnership. The agreement has evolved over the years to comprehensively capture all wage classifications, conditions, skill development arrangements and other matters which codify processes for managing change or disagreement.
Processes for partnership in action in the Refrigeration Plant
Weekly meetings of Operations and HR Managers, a trainer, convenor of delegates which look at health and safety issues, team leader development, recruitment, production performance, issues and impacts, and training help to build ownership at a local level.
There is a Monthly Attendance Committee made up of the Area Manager, a team leader, and HR advisor and a delegate which approves payment (or non-payment) for unplanned absences. The aim is to turn people who may be regular ‘offenders’ around.
For instance one employee was regularly absent. A proactive investigation into what was stopping him from coming to work revealed he had poor vision and couldn’t see small screw holes clearly, especially after several days of straining his eyes. The Company provided him with glasses. Six months later he had become a foreman.
There are also twice weekly 10 minute ‘mini-company’ meetings to provide yet another forum for two-way company-staff communication.
Dealing with differences
The company wanted to shorten the 3-week Christmas shutdown to meet customer demands in other markets. They approached the union but in the words of one delegate “didn’t really put up a proper business case.” The ‘poor’ business case was voted down. The next year, managers developed a stronger business case and involved shop floor staff in small groups to come up with options. Together they worked out a solution that provided for a shorter shutdown in return for an extra week’s leave. Everyone was satisfied.
The historical practice of a 5 minute wash-up time at the end of the day for all production staff was costing the company $150,000 per month. After deliberations with members, the Union worked out a solution involving a swap between the wash-up time and an extra 2.5 days leave per year (equivalent to the wash-up time over a year). This win-win also delivered additional savings on wasted plastic to the company.
The company needed to increase production by 200 dryer units per day to cope with demand. A brief was given to a leader of 60 staff in the dryer production area. Together the leader and the workers came up with a solution that involved them working on both sides of the production line enabling them to double production. The only cost associated with this redesign was $400 for new rubber mats to stop people from slipping.
Positive Benefits of Partnership
For Fisher and Paykel
- Movement from negotiating with 13 unions to one
- Productivity gains over many years
- A motivated and empowered workforce and a constructive union presence
- Staff willing to initiate improvements, undertake necessary change, and provide extra effort when called upon
For EPMU members
- Above average wages and conditions
- Understanding of the business and their own contribution to it
- Pride in being associated with part of a good company making good products
- Recognised work-related qualifications
For the EPMU
- A living and workable example of what genuine partnership can deliver
- Involvement at a number of levels throughout the company
- Delegate development
- Skills-based pay
The full version of this case study shows some of the challenges Fisher and Paykel and the EPMU will face as they develop their partnership and possible ways of addressing these.