Background and context Firstly, thank you for agreeing to meet with us. As you will know the sector is incredibly complex and has been chaotic in the past few years. The following is an attempt to provide a balanced and succinct overview of this recent history. PTOM and the previous Government ‘The Wellington Passenger Bus service has been fraught with problems and disputes for several years now. This is largely due to the adoption of the Public Transport Operating Model (PTOM) introduced by the National-led government.1 PTOW's stated intent was to “incentivise the delivery of effective public transport services to ‘communities, grow patronage, maximise farebox revenue, and improve commerciality”. We noted at the time that the latter two outcomes contradict the former two. In implementing PTOM the Greater Wellington Regional Council (GWRC) dispensed with the electric trolleybus system on the basis that it would cost too much to bring up to date (this has been strongly disputed). The effect of removing the network was to remove the requirement for companies tendering for Wellington City routes to have to supply and run electrified buses. This barrier had allowed for only one company to operate in the city - at time of the change this was NZ Bus. The effect of this situation for our members was the absence of competition based on reduction of terms and conditions of employment. A situation that was unique in the industry. We were able to negotiate to maintain a Collective Employment Agreement in line with the terms and conditions of the old award including penal rates, allowances, redtindancy clauses, and rights to consultation. Passenger transport is a mature industry. The capital and operating costs are largely fixed across all operators - same diesel or electricity cost, same depot costs, same vehicle costs. This, leaves two elements available for competition - quality and safety of service, and workers’ terms and conditions. Elsewhere in New Zealand we have seen both of these elements significantly reduced. * httpsiwww.nzta.govi.nzlassets/resources/ptom-implementation-update/doos/ptom-information- sheet pdfThis is the context under which GWRC was able to competitively tender Wellington's routes. As we have seen elsewhere in the country the result has been a reduction in service and downward pressure on terms and conditions. Tranzit won 67% of the routes from NZ Bus. Tranzit runs the routes through two wholly owned subsidiaries - Tranzurban Wellington and Tranzurban Hutt Valley. Both subsidiaries implemented a flat rate of pay - this is higher on an hourly basis than the NZ Bus rate but because the agreement does not include allowances and penal rates the overall take-home pay is reduced. In addition to this, Tranzit drivers have much less control over their hours and are subject to longer days, split shifts with long breaks, and less roster security than NZ Bus drivers, These issues affect not only drivers but maintenance and other depot workers as well. ‘The consequence of this change, along with the hub and spoke failure, was a bus service that fell into chaos. This has still not greatly improved. However the dysfunction is partially masked by lower passenger numbers than there were prior to the change. Before the 2017 election the Labour leader of the time, and the party's local MPs, strongly ‘endorsed the Thank You Driver campaign we ran to combat the reduction of terms and conditions. 2017 - 2020 The previous Minister took a strong interest in bringing together all parties involved in this issue and in reforming PTOM with a commitment to better terms and conditions in the industry. In our opinion this process was not met with good faith by the bus companies, many of whom see each other principally as competitors and progress was seriously slowed. Solutions from, unions also differed depending on regional and historical bargaining factors. In October last year NZ Bus was sold by Infratil to private equity firm Next Capital Investments. ‘Tramways Union understands that aspects of the sale are now being disputed by the parties. After repeated meditation and finally facilitation we concluded a CEA with Tranzurban Hutt Valley. This expires in June next year. We have a negotiated CEA with Tranzurban Wellington that is based on the same agreement and this will be ratified early in December By the 2020 election campaign the previous Minister announced instead a blanket policy of a minimum of living wage for all workers in the industry. 2 Current situation ‘Tramways Union is about to commence bargaining with NZ Bus. We do not anticipate this will be a smooth process. The new owners claim they do not understand New Zealand's bargaining framework and have indicated they wish to rewrite the collective agreement — something we would vehemently oppose. 2 https:/hww.stuff,co.nz/national/1227525 18/so-so-thrilled-bus-drivers-celebrate-milestone-pay-deelOur agreement has expired, and we are the first group of workers to negotiate under the new living wage policy. Many of our members are on an hourly base rate that is lower than the living wage. The election announcement will strongly influence their wage claim. We have talked with the GWRC about the situation and they are comfortable with the increase in wages for drivers but will require the government subsidy to increase to achieve this. ‘The bus companies more broadly are not pleased with the situation despite it being unlikely to ‘add to their expenses. We suspect that their concem is due to the removal of the key competitive advantage the current lack of minimum rates provides other operators. We have suggested that due to the unique situation in Wellington the parties to the bargaining should include the GWRC and NZTA as the funders of the living wage proposal. Any such agreement reached with NZ Bus would have to apply to all other operators, at least in the Wellington region. Other issues Workforce We are still seeing a high turnover rate in the industry During the PTOM implementation Wellington lost many of its experienced drivers with 240 being made redundant most of whom left the industry. COVID related unemployment has increased the supply of new drivers, but even this has slowed. In the last month NZ Bus has only managed to recruit 6 new drivers with at least 30 resigning in the same period Workforce training has been significantly down graded Hours of work We have ongoing concems that the legal maximum hours of work - 13 hours per day with 5.5 hours without a break - are an issue for drivers’ health and the safety of the public Rest and meal breaks. There is ongoing concern about the lack of provision for drivers on breaks.® Morale Morale amongst drivers in Wellington is the lowest we have seen. | would have to say itis the unhappiest workforce I have seen in my 42 years of service. Kevin O'Sullivan ‘Tramways Union Secretary 5 https:/hwww.stuff.co.nzidominion-postwellington/123373048/bus-drivers-forced-to-go-tolletin-bushes- threaten-to-walk-off-the-job